1. Federal Tax Incentives Original reasons for federal tax incentives was to encourage the commercialization of renewable energy resources by making it easier for them to compete with lower cost, conventional energy supplies.

2. Price of Biodesiel Under IRC Section 4081, the normal tax on gasoline is $0.183/gallon, but the tax on biomass-derived ethanol (at least 190 proof)-gasoline blends as gasohol (10 vol % ethanol-90 vol % gasoline) is $0.129/gallon. Thus, each gallon of qualifying, biomass- derived ethanol is eligible for an excise tax exemption of $0.54/gallon

3. Close loop Biomass Private entities subject to taxation are eligible for the tax credit if they generate electricity from biomass and sell surplus electricity to an unrelated party. The amount of the credit is 1.5 cents per kilowatt-hour, adjusted annually for inflation and changes in the economic competitiveness of qualifying resources.

4. Budget For fiscal year 2005, the Department of Energy is requesting $81.3 million for Biomass Program activities. The FY 2004 biomass appropriations of $94 million included nearly $41 million in Congressionally directed activities

5. Environmental Impacts Utilization of biomass technology on a larger scale has the potential to make an impact on reducing U.S. reliance on fossil fuels and sequestering carbon, both of which benefit the environment.

6. Benefits Renewable. Biofuels are essentially nontoxic and biodegrade readily. Every gallon of biofuels used, reduces the hazard of toxic petroleum product spills from oil tankers and pipeline leaks.

7. Benefits using biofuels reduces the risk of groundwater contamination from underground gasoline storage tanks (more than 46 million gallons per year from 16,000 small oil spills, according to the General Accounting Office), and runoff of vehicle engine oil and fuel.

8. Benefits The CO 2 released when biomass is converted into biofuels and burned in truck or automobile engines is recaptured when new biomass is grown to produce more biofuels This results in substantially reduced net greenhouse gas emissions.

9. Farm Production Modern, high-yield corn production is relatively energy intense, but the net greenhouse gas emission reduction from making ethanol from corn grain is still about 20%. Making biodiesel from soybeans reduces net emissions nearly 80%.

10. More benefits Reduced Sulfur Dioxide Emissions Reduced Nitrogen Oxide Emissions Reducing Other Emissions Landfills produce methane (CH 4 ) from decomposing biomass materials. Decomposing animal manure, whether it is land-applied or left uncovered in a lagoon also generates methane.

11. Environmental Benefits of BioPower Biomass electricity is typically generated through boiler/steam turbine plants, but with three key differences: the fuel is renewable, there is less than 0.1% sulfur (an acid rain ingredient) in biomass fuels, and less air pollutants are produced.

12. Environmental Benefits of Biobased Products Many of the products now made from petroleum (e.g., petrochemicals) could be made from renewable biomass. The basic molecules in petrochemicals are hydrocarbons. In plant resources, the basic molecules are carbohydrates, proteins, and plant oils. Both plant and petroleum molecules can be processed to create building blocks for industry to manufacture a wide variety of consumer goods, including plastics, solvents, paints, adhesives, and drugs.