Sponsors (9)
The bill reduces costs and improves liquidity for domestic low‑carbon material production through a per‑pound production credit, a 30% investment credit, and transferable credits, but it does so at measurable federal revenue cost and with complex, limited eligibility that raises compliance burdens and narrows who benefits.
Project developers and businesses placing qualifying equipment into service receive a 30% investment tax credit, reducing upfront capital costs and improving project cash flow.
Producers of qualified renewable material receive a $0.10-per-pound production tax credit for 10 years, improving ongoing production economics and revenue predictability.
Both the production and investment credits can be transferred or monetized, allowing developers without tax capacity to sell or allocate credits and access liquidity.
All taxpayers face higher federal revenue costs from these credits, which could increase the deficit or create pressure for offsets, spending cuts, or higher taxes elsewhere.
Small businesses, taxpayers, and state governments will face complex eligibility and coordination rules (ASTM testing, supply‑chain attribution, interaction with other credits and tax‑exempt bond rules) that raise compliance costs and may require specialized tax advice.
Numerous exclusions and limits (e.g., fuels, heat/electricity generation, co‑processing, prior production‑credit properties, certain rehab expenditures) narrow who can claim benefits and complicate project accounting.
Based on analysis of 2 sections of legislative text.
Creates a $0.10/lb production credit (capped $10M/facility/year) for qualifying biobased carbon content and a 30% investment credit for equipment at qualified renewable material facilities.
Official title: To amend the Internal Revenue Code of 1986 to establish tax credits for the production of, and investment in, certain renewable materials.
Introduced March 27, 2026 by Michelle Fischbach · Last progress March 27, 2026
Creates two new tax incentives to spur production and domestic investment in biobased (renewable) materials: a production credit of $0.10 per pound of qualifying renewable material (capped at $10 million per facility per year) and a 30% investment tax credit for capital placed in service at new qualified renewable material facilities. The measures define eligible material as the biobased carbon content of products from biomass, exclude fuels, electricity/heat, food/feed, and certain coproducts, set procedures for transferability and coordination with other credits, and require Treasury (with USDA) guidance within 180 days. The production credit applies to materials produced on or after enactment; the investment credit applies to property placed in service after enactment.