State Senator Steve Sodders D-State Center

(Des Moines) The Iowa Senate has approved legislation to create jobs and economic growth using the plant materials left over from the production of ethanol, biodiesel, and other biomass-based fuels.

Senate File 2300 creates a Renewable Chemical Production Tax Credit. The tax credit will encourage industries to turn organic byproducts from the biofuels industry into higher value chemicals used by a much broader group of businesses.

“The U.S. chemical market is worth more than $250 billion a year. Currently, it’s almost all based on crude oil and natural gas,” said State Senator Sodders of State Center. “Iowa State University scientists believe Iowa bio-based chemicals can replace the petroleum used in many, many products.”

The Renewable Chemical Production Tax Credit is capped at $10 million per year. The credit will first be available for chemicals produced between January 1, 2017, and December 31, 2026. Nonpartisan legislative fiscal analysts have determined that the overall effect of the tax credit will be revenue-neutral.

“Iowa has lots of biomass feedstock that has value beyond using it for food and fuel,” said Sodders. “Other Midwest states are in the same situation. This tax credit will encourage this budding industry to invest and grow in Iowa.”