Dems: Feedstock can boost homegrown economy

October 3, 2016
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Iowa is the first state to adopt a biochemical tax credit. According to a 2014 study that laid out an economic road map for Iowa, it’s the type of growth opportunity we should pursue since we have lots of biomass and feedstock to put into biorenewable production.

 

The U.S. market for chemicals is more than $250 billion a year, according to a report by Iowa State University. By substituting Iowa bio-based chemicals for crude oil and natural gas, Iowa’s abundance of biomass feedstock offers a promising opportunity for economic growth.

 

A new program will allow companies to seek tax credits for producing renewable chemicals — other than food and fuel — from farm crops and material left over after harvests. The initiative fits into Iowa’s existing tax incentives program at no additional cost.

 

The Renewable Chemical Production Tax Credits will encourage industries to turn byproducts from biomass feedstock into higher-value chemicals. Startups can qualify for up to $1 million and established businesses can get up to $500,000 each year. Tax credits will be available on a first-come, first-served basis for chemicals produced between January 1, 2017, and December 31, 2026.

 

The law makes available approximately $92.5 million in credits over 10 years to encourage companies to come to Iowa to research, develop and commercialize new biochemical products. It will create more high-quality jobs and spur further ag and manufacturing innovation.

 

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