Production Tax Credit for Open- and Closed-Loop Biomass


Energy - Alternative

Subsidy Type

Tax Expenditure

Committees of Jurisdiction

House Committee on Ways and Means, Senate Finance Committee

$100 FY 22 Budget Score (in mil.)
$1,000 FY 22-31 Budget Score (in mil.)

Renewable electricity production tax credits (PTC) provide a per-kilowatt-hour (kWh) tax credit for electricity generated from certain renewable sources for the first 10 years of a project under Section 45 of the tax code. Open-loop biomass refers to facilities that produce electricity by burning organic waste that is a byproduct of agriculture, construction or timber-related activities, such as livestock waste and tree trimmings. Closed-loop biomass refers to facilities that produce electricity from plants grown specifically as a feedstock for electricity production, such as switchgrass or fast-growing trees. For 2021, the closed-loop biomass PTC is 2.5 cents per kWh with the open-loop biomass PTC at 1.3 cents per kWh.

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