TURNING BIOMASS INTO BUSINESS
Iowa offers the first of its kind in the nation, Renewable Chemicals Production Tax Credit program. The program addresses the unique opportunity to advance Iowa’s economy by focusing on the development of biomass as feedstocks for the production of renewable chemicals.
Iowa is a leader in the biofuels industry as a result of the availability of abundant natural resources and support provided by the state to encourage development. Iowa is also a world leader in the production of both corn and soybeans.
Iowa produces the nation’s second largest supply of biomass with the ability to harvest 14.4 million dry tons of biomass annually (total cellulosic and crop biomass). Additionally, Iowa can boast one of most robust industrial biotechnology infrastructures available in the U.S.
Many of the industrial facilities around the state currently producing food and fuel products from corn, soybeans and other renewable products also produce certain co-products that can be further processed into higher value basic chemical compounds. These compounds can in be further processed into end-use consumer products such as plastics, textiles, paints or pharmaceuticals. Production of such biochemicals is perhaps the fastest growing segment of the bioscience industry and represents opportunities for development of a high-density industry cluster such as Silicon Valley.
The federal Department of Energy studied high-value chemicals from biomass feedstocks and identified 30 chemicals that hold the most market potential, which forms the foundation for this program. The Renewable Chemical Production Tax Credit program aims to incentivize the production of high-value “building block” chemicals based on weight ($0.05 per pound produced) with annual limits of $1 million for start-ups and $500,000 for established businesses.
Administrative rules, as well as the application process are currently being developed. IEDA will begin accepting applications early 2018 for the 2017 calendar year production period.
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