Industry leaders push for investment tax credit

By Anna Austin | February 09, 2010
Posted March 5, 2010

A large number of industry members are urging Congress to grant an investment tax credit to advanced biofuel producers in order to help overcome financial barriers associated with the timely development of commercial-scale projects. Advanced biofuel producers are currently eligible for a federal production tax credit, but the incentive is unused because there are no operating commercial-scale facilities.

Nearly 40 industry-relevant groups such as the Renewable Fuels Association, BlueFire Ethanol, Coskata, Enerkem, Verenium, Range Fuels and Iogen signed a letter to U.S. Sen. Max Baucus, (D-Mont.), Charles Grassley (R-Iowa), Rep. Dave Camp (R-Mich.)and Rep. Charles Rangel (D-N.Y.), which points out that there will be no commercial cellulosic biorefineries commissioned before 2011, at the earliest. The principle cause for commercialization delay is lack of funding, the letter states, due to the severe plummet of the U.S. economy.

According to the U.S. DOE's National Renewable Energy Lab, the estimated total project investment in a 50 MMgy advanced cellulosic biofuel refinery is $250 million. Attracting private capital is virtually impossible, the letter points out, as conversion technologies for advanced or cellulosic biofuels are precommercial and most investors are unwilling to take technology risks.