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Biofuel Companies and Trade Associations Push for Extension to Investment Tax Credits for Cellulosic Biofuels and The Inclusion of Algae Biofuels

A group of 35 biotechnology and biofuel companies and trade associations are urging the leaders of the House Ways and Means Committee to extend tax credits for cellulosic biofuels for four years, to allow algae biofuels to qualify for those tax credits, and to create an option for monetizing the tax credits as tax refunds. Similar mechanisms exist for other renewable energy industries, including wind, solar, geothermal, and biomass for electricity under the tax code (26 USC § 48).

Specifically, the group sent a letter to Committee Chairman Rep. Sander Levin (D-MI) and Ranking Member Rep. Dave Camp (R-MI)urging the inclusion of the language of H.R. 5142, the Grow a Renewable Energy Economy Now – Jumpstart Other Biofuels (GREEN JOB) Act of 2010, in the next appropriate revenue vehicle considered by the House.

In addition to extending the cellulosic production tax credit, currently set to expire at the end of 2012, by four years and allowing algae biofuels to qualify, the GREEN JOB Act would also close the IRS loophole that allows black liquor to qualify for the cellulosic tax credit, which would help to pay for the extension of the credit to algae biofuels.

Rapidly increasing US production of advanced biofuels can reduce reliance on petroleum, contribute to economic revitalization, and create truly green jobs. Enduring federal commitment to increasing alternative energy production is vital for producers seeking the investment needed to build biorefineries and infrastructure. In the current economic environment, small companies are finding it especially challenging to raise financing for first-of-a-kind commercial-scale facilities.

—Jim Greenwood, president and CEO of BIO, the Biotechnology Industry Organization

The GREEN JOB Act, introduced by Representatives Allyson Schwartz (D-PA), Mark Schauer (D-MI) and Brian Bilbray (R-CA), is intended to support industry efforts to secure project financing by strengthening and expanding federal tax incentives for next generation biofuels, thus accelerating the development of biorefineries.

The proposed legislation would also provide cellulosic and algae-based biorefineries an option to choose a refundable 30% investment tax credit in lieu of production incentives. Businesses would not be allowed to claim both the production and investment incentives but would be granted the flexibility to choose the incentive best suited to their business condition.

Signatories to the letter include:

25x’25 Alliance
Algal Biomass Organization
Algenol Biofuels
BioEnergy International
Biotechnology Industry Organization
CMEA Capital
Culturing Solutions
DuPont Danisco Cellulosic Ethanol
Edenspace Systems
Genencor, A Danisco Division
HA International
Hexion Specialty Chemicals
HR BioPetroleum
Life Technologies Corporation
Lignol Innovations
Maryland Biotechnology Center
Mendel Biotechnology
Myriant Technologies
Plum Creek Timber Company
PPG Industries
Sapphire Energy
Targeted Growth
The Dow Chemical Company

Two other proposals—one from Sen Bill Nelson (D-FL), and another by Rep. Stephanie Herseth Sandlin (D-SD) that she has not yet introduced—would also create investment tax credits for advanced biofuels.



3 years ago I was a huge cheerleader for algae biofuels. Feed CO2 from power plants to algae that get transformed into fuel. Talk about hitting the target with both barrels, Genius.


Green Fuels Technologies had the best of all worlds. Open access to the perfect facilities, more money than they knew how to spend, top engineers and scientist, partners with 1st rate Know How and very deep pockets, no time constraints.

Every busness in the world dreams of having half the advantages Green Fuels received. But, while their founder was accepting 'Invention of the Year' awards green fuels was failing. Oh, and the founder, Isaac Berzin, Yeah well, he skipped the country.

I am all for the concept, as long as before any money is handed out, there is a guarantee that they won't just recreate Green Fuels failed experiments.


Joseph, Green fuels was not able to solve their bioreacter design problems and missed a contract deadline. Not untypical for an R&D startup. Obviously Green Fuels' "first rate know how" didn't know enough.

For algae to take off we need MANY more good minds at work to figure ways to manage rapid algal growth. So far no one has demonstrated that ability. Solazyme makes several kinds of biofuels from their process on small scales:

And the UK Carbon Trust organizes several different approaches to algal fuels:

One startup failure does not kill a promising field. We need better ideas. Focusing on JetA-1 fuel may be the right source for new investment as the market for liquid aircraft fuels continues to grow. This is a prime candidate for DARPA funding as well as new DOE funding. And um, BP might want to think about alternatives to petroleum if they want to remain in business.


I thought Craig Venter & Synthetic Genomics were going to tackle algae with the $300 Mil from ExxonMobil? Anyway, I think most people would support the extension & more tax breaks for algae. I can't imagine congress not approving them unless they were lumped into some other ugly legislation.


Is the problem not too many companies carrying out overlapping research, thus duplicating too much efforts, and in effect wasting a lot of money and resource? Then to top it all off, protecting their knowledge from other companies that could make progress through patents.

Would it not be better for a body to co-ordinate the activities of all these groups. I think the present situation makes progress inefficient and slow. Is it time for a holistic look at the whole industry so that it becomes streamlined and more progressive?



I think you make a very good point. It is said that the private sector is more efficient, but maybe not in all cases. I can remember in the early days of personal computers, venture capitalists funded dozens of disk drive companies only to have some fail and some merge and everyone duplicating research and development and not sharing. Sharing is not something competing companies do, but they do file LOTS of patents.


Scott and SJC, herein lies the philosophical difference that has fired animosity for centuries. Does the collective hive mentality outperform the independent competitive process? For an answer we might look to high level sports competition. There is general global acceptance and even reverence for Olympic-level athletic competition. It is what makes athletes achieve new, astonishing milestones in physical ability and human health. Athletics excel under both individual and team efforts. The rewards for placing first in athletic competition are great and highly regarded in our global culture.

So then, why not accept the same approach in technology? Sure some effort gets duplicated. High jumpers all leap over a bar to train for competition. But it is the technique of each high jumper and their innate talent that allows them to excel.

The reward for a process to manage algae for production of jet fuel is huge. Rewards incentivise entrepreneurs, scientists and investors to take risks and innovate. A consortium of basic algal research might prove an effective way to some solutions. But too often sending everyone down the same path leaves other paths untrodden.

Better IMO to have many competitors going down diverse paths, than all on one path leading to compromise.


It is not all or nothing one size fits all. In some areas competition can be the best way, in other areas cooperation makes more sense. All we are saying is let's sort out the two, right now we have the hyper individual model that says I win, you lose and we all lose except me when I create a monopoly.


That's the whole logic of patents. Whenever you think something might be useful, it is patented. By definition, anything you want to patent, you need to tell the details, or someone else may patent the ideas you didn't mention. If there is a drive to patent, there is a drive to work very hard and fast to be the first. If everyone co-operates, there is a tendency to take it easy. Also, as long as private money can be lost or won, there is a drive to be very critical in the investments. (although in a field where a relatively small investment can make huge returns - like the google of the '90s - a calculated guess with a chance of winning of 10% may be a very good bet)
If there is maximal co-operation, that's the best guarantee to skip the need for objective investment criteria, which equals the best breeding ground for corruption.

If the big players want co-operation, they can simply buy the small players they want to co-operate with. If they don't, then let the fittest survive.


That does not address waste by duplication, survival of the meanest many not bring about the best results for everyone.

Fred H

There's a word for not duplicating efforts: Monopoly.

Some people here should spend a couple weeks studying the thousands of cooperative projects organized by the DOE, DOT, EPA, etc. Study also the thousands of industry and science associations, newsletters, conferences, seminars, journals, etc. Study also the thousands of joint ventures, licensing agreements, mergers, etc. Then come back here and tell me with a straight face that there is no organization, cooperation or sharing in the transportation and energy sectors.

When two different people do likewise, it isn't the very same thing. That's an old German saying that doesn't work very well in English. Different people working independently on the same problem often have different solutions, or one might succeed while the other fails.

Competing companies often DO share and cooperate, because often it benefits BOTH.

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