Cellulosic, algae biofuel makers want US to extend aid

27 May 2010 23:24  [Source: ICIS news]

NEW YORK (ICIS news)--Cellulosic and algae biofuel producers are calling for the extension of a cellulosic production tax credit and tax parity for algae-based fuels in order to stimulate recession-stunted private investment, several producers said on Thursday.

HR 5142, the Green Jobs Act of 2010, was introduced by US Representative Allyson Schwartz (Democrat, Pennsylvania).

“The bill that we’re talking about, that Congresswoman Schwartz introduced, is exactly what we need - it says we need to get these [commercial biofuel] facilities built,” said Wes Bolsen, chief marketing officer and vice president of government affairs for US-based biofuels producer Coskata.

“We need the enduring government policy that says when you build these facilities, the investors will come in behind it with private investment dollars in a monetisable investment tax credit. That is the No 1 thing we are asking for - a monetisable investment tax credit to put this on parity with wind and solar,” he added during a roundtable teleconference hosted by the Biotechnology Industry Organization (BIO).

Coskata has already built an integrated biorefinery outside of Pittsburgh, Pennsylvania, to show that its technology worked and was ready to scale. The company could produce roughly 100 gal (379 litres) of fuel-grade cellulosic ethanol per dry tonne of biomass.

“We are in the algae space and strongly support the current legislation as a way to help accelerate the initial commercialisation of these technologies that are new to the world, although we have been working on them independently or with significant industry partners for some time,” said Martin Sabarsky, chief financial officer of HR BioPetroleum (HRBP), based in Hawaii.

The remaining challenges to commercialisation of these ready-to-use technologies was getting sources of private capital unleashed amid the uncertainty of the financial market and the lack of long-term US government support, Sabarsky said.

HRBP has had a joint venture with Shell since December 2007 to build a demonstration facility in Hawaii that would use HRBP’s algae-to-biofuel technology.

Harrison Dillon, president, chief technology officer and cofounder of California-based Solazyme, weighed in with his company’s strong support of the new legislation that would give biofuels tax parity with other renewable energy sources such as wind and solar.

Wind and solar had an investment tax credit for production facilities, but biofuels did not, he said.

“There is no justifiable reason for that,” Dillon said.

“The Green Jobs Act will not only establish parity for algae-based biofuels with cellulosic biofuels, it will go a long way in helping biofuel companies secure scarce, private sector capital to build commercial facilities,” said Paul Woods, CEO of US-based biofuels producer Algenol.

Woods said that the timeline of the bill was right for the biofuels business. The Green Jobs Act would make the tax incentives effective through to 2016. Algenol expected to launch commercial development in 2011.

“The current law provides tax incentives for cellulosic fuel, but curiously not for algae-based fuel. Even so, these existing credits expire after 2012, before algae companies like ours can take significant advantage of them. The bill would rectify these problems,” Woods said.

Providing new incentives through to 2016 would give investors more time to gauge how well the incentives improved the finances of a new facility, Woods said.

Bookmark Doris de Guzman’s Green Chemicals Blog for views on green chemistry and sustainability 
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By: Feliza Mirasol
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