Sponsor
Kevin Kiley
Representative · I-CA
Representative · I-CA
The bill makes biomass projects substantially more attractive by offering large tax incentives that lower costs and spur local economic activity, but it does so at the expense of federal revenue and with potential for higher consumer energy prices and environmental harms if sustainability safeguards are not enforced.
Owners and developers of qualifying biomass facilities (utilities, energy companies, small business owners) receive stronger tax incentives — a 30% investment tax credit plus eligibility for the Section 45 production tax credit — lowering upfront capital costs and improving project revenue certainty.
Increased tax incentives are likely to encourage more domestic biomass generation, supporting local construction and operations jobs and economic activity in rural communities and for small businesses.
Federal taxpayers could face higher federal revenue costs because the credits reduce tax receipts, which may increase deficits or crowd out other spending priorities.
If subsidies favor particular biomass technologies or feedstocks, electricity customers and local communities could face higher energy prices if projects pass along costs or rely on subsidized, expensive inputs.
Expanding financial support for biomass without strict sustainability standards raises environmental risks (e.g., harmful feedstock sourcing, increased emissions, ecosystem impacts) for rural areas and communities near feedstock supply chains.
Based on analysis of 2 sections of legislative text.
Reinstates investment (30%) and production tax credits for certain new biomass facilities whose construction begins after enactment.
Official title: To amend the Internal Revenue Code of 1986 to provide investment and production credits for open- and closed-loop biomass facilities.
Introduced July 16, 2026 by Kevin Kiley · Last progress July 16, 2026
Reinstates federal investment and production tax credits for newly constructed open- and closed-loop biomass energy facilities. The bill amends the Internal Revenue Code so qualified property in specified biomass facilities is eligible for a 30% energy investment tax credit and restores production tax-credit rules for new biomass plants if construction begins after enactment. The changes apply only to facilities whose construction begins after the law takes effect and remove certain limitations for these new biomass facilities so they can claim the production credit and the energy investment credit under the revised rules.