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Business Regulation

Iowan report proposes bio-based chemicals tax credit system.

Iowa_WindTurbinesA new White Paper on the opportunity the emerging bio-renewable chemical industry holds for Iowa has found some striking findings applicable across the industry and not just in the Midwestern state. Thanks to the rich supply of Iowa biomass suitable as feedstock for bio-renewable chemical production, access to a foundational network of over 50 ethanol and biodiesel production facilities across the state, and nascent bio-renewable chemical investment opportunities Iowa is better positioned than many domestic competitors to capitalize on the next frontier of bioprocessing in the United States. But despite Iowas obviously discernible advantages, however, the absence of a state wide economic development incentive tailored to address the unique needs of this budding industry stands as a serious impediment to the states potential to emerge as a centre of gravity for bio-renewable chemical investment and job creation in the coming years.

The report,titled Biobased Chemicals: The Iowa Opportunity, was released by Iowas Cultivation Corridorand the Iowa Biotechnology Association (@IowaBio). The report details how state wide economicdevelopment incentives can address the unique needs of the budding industry and allow Iowa toemerge as a leader in bio-renewable chemical investment and job creation in coming years. Thefindings of the report were released at a news conference at the Iowa State Capitol onThursday. Among the reports findings:

  • First generation biofuels have been important economic drivers for the state of Iowa. Ethanol production alone in Iowa accounts for $2.23 billion per year in state GDP and supports more than 8,693 jobs.
  • At least five potential bio-based chemical production projects were identified through an industry interview process as part of the report. Representatives of each project indicated a biorenewable chemical production tax credit would be fundamental to the ultimate location decision in or outside Iowa.
  • The U.S. market for chemicals is more than $250 billion per year.
  • More than 50,000 jobs in bio-based chemicals and materials are projected to be created in the United States by 2020.
  • Using income tax data, the payback period on the $61.7 million the state invested in the ethanol industry was just two years.

Iowa is very well-positioned to capitalize on the next frontier of bioprocessing in the UnitedStates, which will help our state economy grow, create jobs and position us as a worldwideleader, said Brent Willett, Executive Director of the Cultivation Corridor. We can and mustcapitalize on this opportunity, and weve got to work together to do so.

The opportunity exists to be even more of a leader in this space due to our ability to bring theright people to the table, said Joe Hrdlicka, Executive Director of the Iowa BiotechnologyAssociation. To take the next step, we need support from our State Legislature in the form of astate wide economic development incentive tailored to address the unique needs of theburgeoning bio-renewables industry.

To view the full report and the executive summary, visitCultivationCorridor.org/BiochemReport.



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