Kiley Bill Adds 30% Tax Credit for US Biomass Plants

A new bill in Congress would give companies a 30 percent federal tax credit for building new biomass energy facilities in the United States. The Biomass Facility Construction Act, introduced July 16, 2026 by Rep. Kevin Kiley, an independent from California's 3rd District, aims to create new outlets for wildfire-thinning material that currently gets piled and burned in forests.

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What does the Biomass Facility Construction Act actually do?

H.R. 9746 creates a 30 percent investment tax credit for the construction costs of new biomass energy facilities. It also lets those same facilities claim the federal production tax credit for the electricity they generate.

The bill was referred to the House Ways and Means Committee on July 16, 2026, according to congress.gov. It has zero cosponsors listed so far, which is normal for a bill in its first days of life.

Under current tax code, biomass facilities that started construction too long ago lost eligibility for both credits. H.R. 9746 restores that eligibility for new facilities and adds the fresh 30 percent construction credit on top. This dual structure mirrors a financing pattern already common in carbon capture project financing, where pairing a capital credit with an operating credit lowers the risk for lenders and developers alike.

Why is Congress tying a tax credit to wildfire cleanup?

Congress is targeting the tax credit at wildfire fuel because contractors clearing forests have too few places to send the material they remove. Limbs, dead wood, and undergrowth pile up on forest floors and turn into fuel for future fires.

Kiley put it directly in his introduction statement:

Wildfire mitigation crews already remove huge volumes of this material every year. The bottleneck is not the removal work itself. It is finding a facility willing and able to take the material once it is cut.

More biomass plants means more places for that material to go. That, in turn, can lower the cost of running mitigation projects across fire-prone states, since contractors spend less time and money hauling debris long distances or disposing of it another way.

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How far has biomass power capacity fallen since its 1990s peak?

California's biomass power fleet has lost more than half its plant count since the early 1990s. The state had 66 direct-combustion biomass facilities running at roughly 800 megawatts of combined capacity at the industry's peak, according to the California Energy Commission. Today, about 30 of those plants remain active, with combined capacity of roughly 640 megawatts. The California Energy Commission attributes much of that decline to the expiration of earlier state price supports for biomass power.

Period	Active Plants	Combined Capacity
Early 1990s (peak)	66 facilities	About 800 megawatts
1996	Declining	About 590 megawatts
Today	About 30 facilities	About 640 megawatts

That gap between 66 facilities and 30 facilities illustrates the capacity supporters of the bill hope new construction incentives can help close. Every idled site represents forest material with fewer places to go.

What does stacking two tax credits mean for developers?

Stacking means a single biomass project could claim a construction credit and an operating credit at the same time, something current law does not allow for many new facilities. That combination changes the math for developers deciding whether to build.

The 30 percent credit under H.R. 9746 applies to construction costs, the biggest expense a developer faces before a plant ever produces a kilowatt. The existing production tax credit, by contrast, pays out over years based on how much electricity the facility actually generates.

• Construction credit: 30 percent of qualifying capital costs, claimed once the facility is built
• Production credit: paid over time based on electricity output, once the facility is operating

Pairing the two lowers upfront capital risk while still rewarding actual generation. It is a structure similar to what has helped scale direct air capture projects and carbon removal deals elsewhere in the decarbonization sector, where combining capital and performance-based incentives has helped narrow the gap between pilot projects and commercial scale.

A similar dual-incentive approach has underpinned federal support for hydrogen hub development and the clean hydrogen hub program, where combining upfront capital support with production-based credits has been central to project economics. H.R. 9746 would extend that same combination to biomass.

What would more biomass capacity mean for forest communities?

More biomass facilities would give forest management contractors more places to deliver material, which supporters say lowers the cost of wildfire mitigation work. That is the throughline Kiley's office has emphasized since the bill's introduction.

Kiley continued in the same July 16 statement:

Beyond fire risk, new biomass capacity would also add dispatchable, baseload renewable power to regional grids. Unlike solar and wind, biomass plants can run around the clock, converting forest residue into electricity rather than letting it sit as fuel load or go to open burning. H.R. 9746 does not touch carbon capture policy, but it arrives alongside other U.S. infrastructure buildouts, including new permanent carbon storage projects, that are similarly reusing existing industrial and land assets to expand domestic energy and climate infrastructure.

That dual benefit, wildfire cleanup paired with renewable generation, is why the bill has drawn early interest from bioenergy trade press even without a single cosponsor yet attached. Similar dynamics are already playing out in the sustainable aviation fuel sector, where agricultural residue has found a new commercial home, and in broader SAF production growth nationally.

Biomass power once lit up 66 California facilities at once. Getting even partway back toward that number, this time with wildfire mitigation built into the business model, would mark a genuinely useful turn for forest management and rural energy alike.

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