This bill would add two new federal tax credits for certain biobased materials and the facilities that make them.
First, it creates a renewable materials production credit (new section 45BB). That credit pays 10 cents for each pound of the "biobased carbon content portion" of a product that a taxpayer produces in a qualifying U.S. facility and then sells or uses in the taxpayer's trade or business. The biobased carbon content is measured using ASTM D6866. The credit excludes products that are fuels for vehicles, used to generate heat or electricity, suitable for food or feed, made from biomass not substantially grown/produced in the U.S. or its possessions, or derived from coprocessing biomass with non-biomass feedstocks. Only the first point in the supply chain that meets the rules can claim the credit. A facility may claim the credit for a 10-year qualifying credit period, and the credit for any facility in a taxable year cannot exceed $10,000,000. The credit is generally claimed by the person who sells or uses the material, but that person may elect to allow the buyer to claim it. The credit is made transferable under current rules and coordinates with an existing clean fuel production credit. The Treasury Secretary, with the Agriculture Secretary, must issue implementing guidance within 180 days. The production credit applies to qualified material produced on or after the date of enactment.
Second, it creates a renewable materials investment credit (new section 48F). That credit equals 30 percent of qualified investment in a qualified facility. Qualified investment is the basis of qualified property placed in service by the taxpayer that is used in producing qualified renewable material and is part of a qualified facility. Qualified property is generally tangible personal property or other tangible property (not including a building or its structural components) that is depreciable, constructed/reconstructed/erected or acquired by the taxpayer, and whose original use starts with that taxpayer. A qualified facility is a renewable material production facility as defined for the production credit, but it cannot be a facility for which the production credit has been claimed. The credit is also made transferable, is coordinated with other tax credits, and requires Treasury and Agriculture to issue guidance within 180 days. The investment credit applies to property placed in service after the date of enactment.
The bill was introduced in the House on March 27, 2026, and referred to the Committee on Ways and Means. Sponsors include Representatives Michelle Fischbach and Nikki Budzinski and additional cosponsors.
No publicly available information on estimated federal budget effects or total program cost. The bill itself sets specific credit amounts and limits: a production credit of $0.10 per pound of qualifying biobased carbon content, a 30% investment credit for qualified property, a per-facility annual credit cap of $10,000,000, and a 10-year qualifying credit period for production credits.
No publicly available information.
No publicly available information.