¦ECONOMY net tax expenditure cost of all that is about $143,000. “This study shows that the tax credit seems to have generated more economic activity than it cost the state in tax,” Moseley says. “The credit moderated the price increases that would have happened otherwise in the wood fuels market caused by the economic downturn.” As of March 2011, 52 biomass providers and collectors requested nearly $6.6 mil-
lion in BPC tax credits for fiscal year 2010, according to the research. About $5.5 million of that came from more than 550,000 green tons of woody biomass. The average amount request by each participant totaled $126,931. And it all came at a time of economic peril, during a downturn in the housing market that was creating typical sources used in bioenergy facilities, such as hog fuel and mill residues. But, decreased demand didn’t fol-
low the decrease in supply. “The demand (for biomass) was still growing because of our increasing demands for renewable energy,” Pincus says. That steady demand for biomass-based energy was still met, however, through the BPC tax credit. “The credit essentially allowed for material to come out of the woods that wouldn’t have otherwise come out,” Pincus says. “It allowed that demand for wood fuels and for biomass to continue to grow.” And without the BPC in place, the price of woody biomass would have climbed during the decrease in supply. According to the research, the price of forest biomass would have been roughly 20 percent higher, and availability would have been 20 to 30 percent lower. The BPC not only helped sustain the health of the woody biomass supply market in Oregon, but it also helped sustain jobs involved with the handling, delivering and storing of biomass.
The Future Matt Krumenauer is a senior policy analyst at the Oregon Department of Energy and an integral part of the BPC program. Krumenauer helped assemble the team tasked with analyzing the effectiveness of the tax program. He was responsible for implementing and evaluating the BPC credit, and says he’s happy it has been extended through 2018. But a few changes have been made to the program. Most notably, the unit of measure will switch from green tons to bone dry tons. In addition, stand alone electricity generation sites will not be eligible for the tax credit because combined-heat-and-power facilities will better assist in reaching energy efficiency standards set by the state’s DOE. Krumenauer doesn’t envision any more changes to the BPC program in the foreseeable future, and is already working to implement more biomass programs. In the past, his department created incentives for equipment, or for the construction of new facilities, and now is looking at the biomass
22 BIOMASS POWER & THERMAL | MARCH 2012