HR-9746-119
Referred to the House Committee on Ways and Means.
Sponsored by Kevin Kiley (I-CA)
What it does
This bill would amend the Internal Revenue Code to reinstate and extend two types of federal tax credits — an investment tax credit (30%) and a production tax credit — for new open-loop and closed-loop biomass energy facilities. Both credits would apply to facilities that begin construction after the bill's enactment date. The bill also removes existing limitations on the production credit for these newly constructed biomass facilities.
Who benefits
Energy developers and investors who build new biomass power facilities, as they would receive a 30% investment tax credit on qualifying property. Timber, agricultural, and forestry industries that supply biomass feedstocks, as demand for their materials would likely increase. Rural communities where biomass facilities tend to be sited, which may see construction and operational jobs. Tax equity investors who finance energy projects using federal credits. Utilities and electricity consumers in regions where new biomass capacity reduces reliance on more expensive generation sources.
Who is hurt
Competing renewable energy sectors (solar, wind, geothermal) that do not receive a comparable reinstatement and may face increased competition for tax equity financing and energy contracts. Taxpayers broadly, as the credits reduce federal revenue. Environmental groups and communities concerned about air quality near biomass combustion facilities. Natural gas and coal generators that may lose market share to subsidized biomass power. Landowners or ecosystems affected by increased biomass harvesting activity.
Supporters argue
Supporters argue that biomass energy provides a dispatchable, baseload renewable power source that wind and solar cannot offer, filling a critical reliability gap in the grid. They contend that open- and closed-loop biomass facilities utilize waste wood, agricultural residues, and dedicated energy crops, reducing landfill and wildfire fuel loads — a particular concern in fire-prone states like California. Reinstating these credits, they argue, levels the playing field with other renewables that continue to receive federal incentives and supports rural economies dependent on forestry and agriculture.
Opponents argue
Opponents argue that biomass combustion emits carbon dioxide and particulate matter at rates comparable to or exceeding fossil fuels at the point of generation, and that the carbon neutrality assumption underlying biomass subsidies is scientifically contested. They contend that directing federal tax expenditures toward biomass diverts capital from lower-emission renewables like solar and wind, which have seen dramatic cost reductions without ongoing subsidies. Critics also argue that increased biomass harvesting may accelerate deforestation and habitat loss, undermining the environmental rationale for the credits.