To incentivize the production of chemicals made from renewable resources, some states have implemented tax credit programs.
Tax credit — $0.05 per pound of renewable chemical produced
Annual limit — $1 million for startups and $500,000 for established businesses
Applicability — High-value chemicals derived from biomass feedstocks with at least 50% biobased content as measured by ASTM D6866 testing (e.g. high-purity glycerol, oleic acid, lauric acid, methanoic or formic acid, arabonic acid, erythonic acid, glyceric acid, glycolic acid, lactic acid, 3-hydroxypropionate, propionic acid, malonic acid, serine, succinic acid, fumaric acid, malic acid, aspartic acid, 3-hydroxybutyrolactone, acetoin, threonine, itaconic acid, furfural, levulinic acid, glutamic acid, xylonic acid, xylaric acid, xylitol, arabitol, citric acid, aconitic acid, 5-hydroxymethylfurfural, lysine, gluconic acid, glucaric acid, sorbitol, gallic acid, ferulic acid, non-fuel butanol, non-fuel ethanol)
Excluded — Chemicals sold or used for food, feed or fuel
How to apply — Please contact the Iowa Economic Development Authority
Legislation — Senate Study Bill 3001 (enacted April 6, 2016)
Tax credit — $0.07 per pound of renewable chemical produced in the State
Higher tax credits are possible ($0.09-$0.12 per pound) for chemicals produced from forest-derived renewable biomass for companies that meet other criteria specified in the legislation.
Applicability — Substances sold or used to produce chemicals, polymers, plastics and formulated products with at least 95% biobased content as determined by ASTM D6866 testing.
Excluded — Substances used for food, feed or fuel, with limited exceptions.
The following chemicals are considered as renewable under LD 1698:
LD 1698 also reinstates the tax credit for commercial production and use of biofuels.
How to apply — Please contact the Maine Department of Economic and Community Development
Legislation — LD 1698 – An Act To Create Jobs and Slow Climate Change by Promoting the Production of Natural Resources Bioproducts (enacted March 18, 2020)
Tax credit — $0.075 per pound of chemical produced for qualifying eligible chemical businesses
Annual limit — $1.5 million
Applicability — Renewable chemicals with a significant biobased content that can be used for products including polymers, plastics, food additives, solvents, intermediate chemicals, or other formulated products with a significant non-fossil carbon content.
Renewable chemical includes:
Excluded — Any chemical sold or used as fuel.
LB 1107 also includes a property tax reform that will benefit biofuel plants, among others.
How to apply — Please contact the Nebraska Department of Economic Development
Legislation — LB1107 – Adopt the ImagiNE Nebraska Act, Key Employer and Jobs Retention Act, Renewable Chemical Production Tax Credit Act, Customized Job Training Act, Nebraska Transformational Projects Act, and Nebraska Property Tax Incentive Act and change and provide other related provisions (enacted August 20, 2020)
Source — Legislative Bill 1107
Illinois (SB1656 – Renewable Chemical Production Tax Credit Program Act)
Status: Session Sine Die as of January 9, 2019
It is similar to Iowa’s tax credit program.
Source: Illinois 100th General Assembly
Kentucky (House Bill 422 – An Act Relating to the Renewable Chemicals Production Tax Credit Program)
Status: to Appropriations & Revenue as of February 20, 2019
It is also similar to Iowa’s tax credit program.
New Jersey (House Bill 2532 – Renewable Chemicals Act of 2021)
Status: First stage of legislative process (introduced into Congress on April 14, 2021)
Source: HR 2532
ISO 17025-accredited Beta Analytic has provided rapid, high-quality biobased content ASTM D6866 testing since 2004. The lab is one of the key developers of the ASTM D6866 method. The lab currently has two services – standard (results reported in 7 business days or less) and priority (results in 4 business days).
For inquiries, please email the lab using this form or call (+1) 305-662-7760. We respond to inquiries promptly during business hours (8 AM-5 PM EST, Monday-Friday).
Note: Beta Analytic is not affiliated with any government agencies responsible for these programs. We can advise on ASTM D6866 testing but not on how to apply in these programs or claim tax credits.
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Page last updated: June 2021