Algae Is on A Roll in Congress

May, 21 / 2018

At the beginning of 2018 nobody would have expected that the algae industry was about to go on a roll in Congress.  The Trump administration proposed big cuts in bioenergy research across the board, and Congress was looking at huge tax cuts that would need to be funded.

Yet all the angst in the bioeconomy community obscured at least one surprising trend: The nascent algae industry had built up surprising support from all quarters, and it was about to go into action.

The first hint started with the two-year budget bill signed by President Trump in February that included new carbon capture initiatives, followed by bipartisan support for a bill to codify algae cultivation into American agriculture, which, in turn, set the table for an appropriations bill that allocated millions for algae R&D, including some increases over last year.

Spurred on by members of Congress interested in supporting algae operations in their own districts, a new breed of savvy tech entrepreneurs, and the members of the Algae Biomass Organization, the United States is still part of the global race to develop algae technologies that can deliver solutions for everything from food production to low-carbon energy.

Here’s how the supporters of algae put their imprint on policy in the first few months of 2018:

A Big Tax Credit for Carbon Capture and Use

The February spending deal was a last-minute effort to avoid a government shutdown, and when it came together one of the winners was the algae industry’s long-time interests in carbon capture and use. The agreement included a provision to establish a $35 per ton tax incentive for carbon captured and recycled from power plants or industrial facilities using algae or other biologically-based CCU systems. 

Known as the Section 45Q Carbon Capture and Storage (CCS) tax credit, this incentive to capture and reuse greenhouse gases was previously only available to geologic storage and enhanced oil recovery projects.

CCU supporters not only got their new applications to qualify, they also saw the rate increase from $10/ton to $35/ton, and extended it for 12 years.

And in a nod to the future, Congress allowed air capture facilities to qualify, meaning that even the most aspirational plans to suck CO2 directly out of the air now have policy support in the United States.

Expanding the universe of carbon dioxide sources that could qualify for the 45Q tax credit had support from both Republicans and Democrats, with early sponsorship coming from Sens. Sheldon Whitehouse (D-R.I.), John Barrasso (R-Wyo.), Shelley Moore Capito (R-W.Va.) and Heidi Heitkamp (D-N.D.), as well as the entire Congressional Algae Caucus.

And, as usual, Algae Biomass Organization members from red and blue states formed much of the grass-roots support from across the ideological spectrum.

The Algae Agriculture Act Brings Algae into the Mainstream

Any high-tech industry of similar size would have been considered the 45Q credit a victory of the year. For algae supporters, it was only the beginning of a plan to position algae for success in the future, and in the near-term.

Less than two months later a group in the House introduced the Algae Agriculture Act, a bill that would lay the first groundwork for algae cultivation to become a mainstay of American farming.

With sights set on the upcoming Farm Bill, the Algae Agriculture Act would push the U.S. Department of Agriculture to support algae much as it does other crops. Among the goals:

Prioritize algae R&D for agriculture: The U.S. Department of Agriculture’s core R&D funding program, the National Institute of Food and Agriculture, would see its priorities updated to include algae and its applications in agriculture. The same would apply to the Foundation for Food and Agriculture, which supports innovative science in food and agriculture challenges.. Additionally, a USDA Algae Research Program proposed by Rep. Neal Dunn (R-FL-2) would boost R&D for algae cultivation in ecosystem support, nutrient management, soil heath, rural manufacturing and on-farm applications.

Bring carbon revenue to rural areas: The bill would give rural electric cooperatives explicit eligibility for (CUU) projects that grow algae, introducing a new revenue source for farm communities in nearly every state.

Crop disaster assistance for algae: The USDA would be directed to begin planning for a program that could insulate algae cultivation from natural disasters — much like any other crop – to help algae farmers attract more investment and make expansion plans. 

Like the 45Q credit, the Algae Agriculture Act also enjoys support from a broad political spectrum. Introduced by Democrat Scott Peters (CA-52), the bill has so far attracted sponsorship from Andy Biggs (R-AZ-5), Derek Kilmer (D-WA-6),Darin LaHood (R-IL-18), Michelle Lujan Grisham (D-NM-1), and Matt Cartwright (D-PA-17).

Unlike the 45Q credit, the Algae Agriculture Act isn’t yet law, and we’ll be watching closely how it changes as Farm Bill discussions continue.

Millions More for Research

The Algae Agriculture Act would put algae on course to make its mark on the American farming economy, but algae’s supporters in Congress and members of the ABO were also working to give the industry a boost in the near term.

Just days after the Algae Agriculture Act was introduced, a new spending bill was passed that directed millions of dollars into algae research and commercial development, with the first jolt of funding expected to come as early as this summer.

Specifically, the bill directs:

  • $30 million for algae R&D to come from the Department of Energy’s Biotechnology Office
  • $12 million for carbon use and reuse technology development within the DOE’s Office of Fossil Energy. Remarkably, this is a 20% increase over last year.

A new CCU tax credit and a long-term plan to bring algae into the agricultural mainstream would be feathers in the cap for any corner of the vast bioenergy sector, but to also score an immediate funding increase demonstrates that the advocates for algae have a plan. They are making it happen by winning support from members of Congress of all stripes who see algae’s potential to provide jobs, economic value, as well as food and energy security.

What’s Next? More Algae, Everywhere

It is clear that algae is going to have an interesting year. One question that everybody is asking: who will be in a position to take advantage?

One clear theme in all of these policies is that they are largely product-neutral. Some of the DOE support does target biofuels, but the policy language acknowledges that the same technologies will be useful in developing algae co-products in food, nutrition, materials, water treatment and dozens of other markets.

The CCU credits incent algae production for almost any use, and the Algae Agriculture Act supports every market for algae biomass, and even on-farm services that algae can provide.

The success of the product-neutral policy approach is already bearing fruit. Recently there has been an explosion of algae applications on the market, many of them made possible by the technologies developed with the same policy strategy we are seeing take shape in 2018. Except, this time, the policy support is even more wide-ranging.

As a result, we can expect advanced algae cultivation to continue its expansion. Algae biomass is going to become more available than ever before, and that means even more product applications.

It’s clear that as new spending enters the R&D pipeline, and as the new Farm Bill comes together, any company in the business of food, nutritional products, animal feed, energy and countless other products would be wise to open a corporate division on algae.

After all, despite some stiff headwinds, this crop of the future continues to win supporters on its march into the mainstream.