Michaud Pushes Extension and Expansion of Biomass Tax Credit

Forest products industry is the leading producer and user of renewable biomass energy

As Congress prepares a package of tax provisions for floor action, Congressman Mike Michaud is pushing for an extension of a tax credit that supports the production of renewable energy at biomass facilities. The tax credit, which has been used by Maine paper companies, currently goes to facilities that produce electricity using open-loop biomass.

In a letter sent to the Chairman of the House Ways and Means committee, Michaud wrote: “In much of rural America, any hope of economic recovery is dependent upon the preservation of the kinds of high-quality jobs that are supported by the biomass and forest products industries. Many of these facilities rely on this credit to make their biomass power operations viable. Letting this credit expire during the worst recession in decades will put businesses that have created green jobs at risk and stifle further investment in the clean energy economy.”

Michaud also called for a strengthening of the current tax credit in his letter to House leadership. Michaud introduced legislation earlier this year to extend and strengthen the tax credit by expanding eligibility to facilities producing renewable biomass electricity that is used on-site. Michaud’s legislation, H.R. 622, currently has 61 bipartisan cosponsors.

“The forest products industry is the leading producer and user of renewable biomass energy, currently accounting for 82 percent of the total biomass energy generated by all industries combined. Regrettably, current law requires that these facilities sell the power generated to an unrelated third party to qualify for the credit. Since many facilities use the electricity that they generate from biomass on-site, they are ineligible for a credit that was meant to encourage biomass investment and power production,” said Michaud.