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Report: Oregon biomass tax credit had positive economic impact

By Anna Austin | November 14, 2011

Oregon’s biomass tax credit has been an economic lever that’s incentivized more economic activity than it has cost in tax revenue, according to a new report by the Ecosystem Workforce Program at Oregon State University’s Institute for a Sustainable Environment.

The Oregon Biomass Producer or Collector (BPC) Tax Credit was enacted in 2007 and provides tax credits for the production, collection and transportation of biomass that is used for energy production in the state. Authors of a new report, titled “Impacts of the Biomass Producer or Collector Tax Credit on Oregon’s Wood Fuels Market & Economy,” developed statistical models to forecast the price of wood fuels and the volume of forest biomass used in the wood fuels market and com­pared them to actual volume and prices before and after the BPC tax credit was implemented. The researchers also developed economic impact models of forest biomass production based on biomass pro­duction cost data from the Oregon Department of Forestry, and a financial survey of biomass pro­ducers who applied for the credit.

In 2010, about 85 percent of the BPC tax credit was awarded to collectors of forest bio­mass from logging slash or stewardship projects, offering $10 per green ton of forest biomass delivered to bioenergy facilities. Forest biomass volume increased between 100,000 and 190,000 bone dry tons (BDT) more than the forecast mod­els predicted for 2007-2010, according to the report, and prices were about $7 per BDT less than predicted after the BPC tax credit became available. The authors believe funding from the USDA’s Biomass Crop Assistance Program and other Recovery Act funding are likely contributors to these trends in the wood fuels market.

Other findings in the report include job generation, as the BPC tax credit supported between 32 and 73 Oregon jobs in 2010, and created over $850,000 in total economic activity per 10,000 BDT of forest biomass.

Overall, independent of other policy incentives, the BPC tax credit likely produced up to 2.4 times more value for Oregon’s economy than it cost, according to the report.

To learn more about the BPC tax credit, visit www.oregon.gov/ENERGY/RENEW/Biomass/TaxCdt.shtml.

 

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