Biofuels companies ask Congress for tax credit

A consortium of biofuel producers signed a letter to U.S. Congressional leaders urging the creation of a 30 percent investment tax credit for commercial biorefineries.

The group, including ZeaChem Inc., a cellulosic biofuels company building a facility in Boardman, contend that the tax credit is needed to jumpstart the industry, which must meet new federal mandates for renewable fuels.

“I think we’ve been treated a little bit differently than industries like solar and wind,” said Jim Imbler, CEO of Colorado-based ZeaChem. “Wind and solar are widget industries. Tax policy is better developed for that type of product. It’s a little more complex when it’s a processing business.”

The letter to Congress, dated March 3, asks for a technology-neutral 30 percent investment tax credit.

A 50-million gallon per year cellulosic biofuel refinery is estimated to cost $250 million to build, compared to $76 million for the same-sized corn ethanol plant, the letter stated.

In December, ZeaChem announced a $25 million federal stimulus grant for its Boardman plant from the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.

The roughly $34 million refinery will use poplar trees as its principal feedstock. The trees will be supplied by GreenWood Resources Inc., a Portland company that operates a 17,000-acre tree farm near Boardman. If successful, the company hopes to expand the plant to commercial-scale production in the range of 25 million to 50 million gallons of fuel annually.

Imbler said the company views Oregon as its beachhead for expansion and added that he’s been pleasantly surprised by the reception his business has received from officials in Boardman and beyond.

“I had my questions up front,” he said, “but it’s proven to be a good economic environment to operate in.”