Algae and Seaweed in the Inflation Reduction Act

Algae/Other Aquatic Organisms/Seaweed, Federal Legislation, Federal Regulation, Feedstocks, Opinions, Policy

September 6, 2022

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(Algae Biomass Organization) The Inflation Reduction Act that was passed by Congress and Signed by President Biden last month has been hailed as a milestone in climate progress for the United States, especially for the aid that the new legislation will provide for technology development. Several provisions should be of interest to algae and seaweed producers and processors.

Improvement in Tax Credits for Carbon Capture:

Some of the most exciting changes come to the section 45Q tax credit that can incentivize projects that capture and sequester carbon dioxide. ABO was an early supporter of this credit when it was first introduced, and we have been advocating for improvements we now see in the IRA. Some of those include:

A multiyear extension of the commence construction window.

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Enhanced values for carbon credits from direct air capture.

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Lower capture thresholds.

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ABO’s partner the Carbon Capture Coalition has an excellent breakdown of even more adjustments that IRA makes to the 45Q tax credit.

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Algae and seaweed can both be used to produce low-carbon, high-performing aviation fuels. Aviation stands out as one of the most difficult sectors to decarbonize, and new policies that can accelerate technologies like liquid fuels that come from sustainable biomass sources have been a longtime priority of ABO.

The IRA includes a blender tax credit for sustainable aviation fuel (SAF) and a standalone investment tax credit for energy storage.

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For the latest on ABO’s position on sustainable aviation fuels be sure to read our recent op-ed in Biofuels Digest. READ MORE

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