Algae Gets a Boost in Agriculture, Carbon Capture and Infrastructure Policy

April, 29 / 2019

The algae opportunity is attracting attention for its potential to disrupt dozens of markets. Congress is taking note too.

Following the success of early technology investments by the Department of Energy and other agencies, Congress has expanded federal support for this growing industry by including algae in the 2018 Farm Bill, reforming tax credits to ease investments, and ensuring carbon capture projects can become a reliable source of CO2 feedstocks for algae cultivation.

Here are a few of the recent policy developments that ABO’s Executive Policy Committee is monitoring:

The Farm Bill of 2018 Classifies Algae as a Crop

Last December we heralded the unprecedented support for algae in the latest Farm Bill. This legislation calls on the US Department of Agriculture (USDA) to classify algae as a crop, with many of the same regulatory advantages enjoyed by wheat, corn or soy. It is a landmark achievement for the industry. 

The USDA is now preparing the rulemaking, requests for information and other processes that will make new R&D funding available, lay the foundations for new regulatory support, and even build insurance programs that will help make algae a major crop in the United States.

After a long campaign to get algae recognized in agriculture legislation, ABO’s attention will now shift to ensuring that the changes are implemented to maximum effect. We are working closely with USDA staff to provide the latest information and industry updates that can streamline the process.

With proper implementation, the Farm Bill will provide a major boost to algae R&D and efforts to bring new products and services to market.

Rulemaking for the Section 45Q Carbon Capture and Storage (CCS) tax credit

A robust algae industry can deliver massive reductions in greenhouse gas emissions, but only if the infrastructure to transport CO2 to algae cultivation facilities is put into place. ABO worked with a large coalition to pass a tax reform known as 45Q that will make investment in this kind of infrastructure much easier. Algae is specifically named as a pathway for carbon capture qualifying for this tax credit.

Now we are focusing on ensuring this reform is implemented in a way that provides the investment our members need to be successful. As the U.S. Treasury moves forward with rulemaking, ABO’s Executive Policy Council is mindful that project size limits, application requirements and other variables all must be inclusive of algae.

The USE-IT Act

New legislation has also been proposed that could boost algae, especially when it comes to carbon capture technologies. In the Senate, a bipartisan group has re-introduced the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act, a bill that would support new technologies that can capture carbon from industrial sources, or even directly from the air. A companion bill in the House has been sponsored by Rep. Scott Peters (D-CA), co-chair of the Congressional Algae Caucus.

Passage of this legislation would be a significant driver of investment in algae and other technologies that will transform carbon emissions from an environmental challenge into economic opportunity.

EFFECT Act

This bill introduced by Senators Joe Manchin (D-WV), Lisa Murkowski, (R-AK) and others would provide new support for carbon utilization technology and deployment. Critically for algae, the bill calls for studies that can help overcome barriers and identify opportunities to commercialize carbon. ABO is working closely with Congressional offices to make sure the language in the bill is friendly to algae.

Master Limited Partnership (MLP) Reform

An MLP is a type of business organization that comes with significant tax advantages, but under U.S. law they can only be used by fossil fuel companies. Reforming MLP’s to include renewable energy would level the investment playing field, and accelerate the deployment of infrastructure vital to a robust algae industry.

ABO has been a long-time supporter of these reforms, and with momentum building even in some fossil energy quarters for a change, we may see legislation on this front advance soon.

More to come

Over the next few months ABO will be working closely on all of these initiatives and more. Policymakers are discovering that the challenges in food production, energy, and climate change are becoming more urgent than ever. Advanced algae technologies must be part of the solution.

Ready to get involved? Join ABO today, come to the Algae Biomass Summit, and tell your Congressional delegation to support policies that will accelerate the role algae can play in our economic, environmental and energy security.