Sponsors (5)
The bill incentivizes domestic investment and production of renewable, low‑carbon materials through sizable, transferable tax credits—supporting jobs and cleaner supply chains—while increasing federal costs and adding eligibility and compliance complexity that limits benefits for some projects.
Companies that place qualifying equipment into service can claim a 30% investment tax credit, lowering upfront capital costs and improving project cash flow for developers and owners.
Credits are transferable/monetizable, letting project developers without tax capacity sell or allocate credits to raise liquidity and finance projects.
Producers of qualified renewable material receive a $0.10 per‑pound production tax credit for 10 years, directly improving production economics for eligible producers.
The new credits reduce federal tax revenue and will increase budgetary costs, which could raise the deficit or create pressure for offsets, spending cuts, or higher taxes elsewhere.
Complex eligibility rules and coordination with other credits and tax‑exempt bond rules increase compliance burdens and may require specialized tax advice, raising costs for small producers and project owners.
A $10 million per‑facility annual cap on the production credit limits benefits for large facilities, reducing the incentive for bigger, higher‑capacity projects.
Based on analysis of 2 sections of legislative text.
Creates a $0.10-per-pound production credit for qualifying biobased carbon content and a 30% investment tax credit for facilities that produce those materials, with caps and exclusions.
Introduced March 27, 2026 by Michelle Fischbach · Last progress March 27, 2026
Creates two new federal tax incentives to boost U.S. production of biobased (renewable) materials: a production credit that pays $0.10 per pound of qualified renewable material produced (capped at $10 million per facility per year) for a 10-year period, and a 30% investment tax credit for eligible equipment placed in service at facilities that produce those materials. The bill defines qualifying material as the biobased carbon portion of products (measured by ASTM D6866), excludes fuels for vehicles/aircraft/marine, material used to make heat/electricity, food or feed, and some coprocessed products, and requires Treasury (with USDA) to issue implementing guidance within 180 days.