Congress Advances Bipartisan Push to Incentivize Domestic Biomanufacturing With Dueling Tax Credit Bills
At least four bipartisan bills in the 119th Congress would create tax credits, authorize funding, and stand up USDA task forces to reduce US dependence on petroleum-derived chemicals by scaling plant-based biomanufacturing.
Overview
The 119th Congress is mounting its most concerted legislative effort to date to build a domestic biomanufacturing sector, with at least four bipartisan bills now advancing through House and Senate committees. The measures range from direct tax credits for companies that produce renewable chemicals from American-grown crops to nine-figure appropriations for federal biomanufacturing infrastructure. Taken together, they signal a rare area of bipartisan agreement: that the United States needs to close the gap between laboratory breakthroughs in synthetic biology and commercial-scale production of biobased materials.
What We Know
The most recent entry is H.R. 8137, the Biobased Materials Investment and Production Act, introduced on March 27 by Rep. Michelle Fischbach (R-Minnesota) and Rep. Nikki Budzinski (D-Illinois). The bill offers companies two tax incentive pathways: a production credit of ten cents per pound of qualifying renewable materials produced and sold, capped at ten million dollars annually, or a 30 percent investment tax credit to offset the capital costs of constructing or retrofitting manufacturing plants. Qualifying materials must be produced from domestically sourced feedstock through biological, thermal, catalytic, or hybrid conversion methods. Food, fuel, and feed products are explicitly excluded, as are materials made from foreign-sourced biomass. Only the first qualified producer in a supply chain may claim the credit, preventing double-counting.
The bill was referred to the House Committee on Ways and Means. Its sponsors frame it as a complement to existing biofuel incentives, extending the same policy logic to the broader chemicals and materials sector. Supporters of the legislation argue that companies trying to commercialize biobased products frequently relocate production to Europe or Asia due to insufficient domestic infrastructure, even though the United States leads in the underlying research.
On the Senate side, the Renewable Chemicals Act (S. 3632), introduced in January 2026 by Senators Pete Ricketts (R-Nebraska) and Chris Coons (D-Delaware), takes a parallel approach with a production tax credit equal to 15 percent of the sales price per pound of renewable chemicals and a 30 percent investment tax credit for new production facilities. Eligible chemicals must contain at least 95 percent biobased content and carry the USDA Certified Biobased Product label. That bill was referred to the Senate Committee on Finance.
Two additional bills predate both measures but remain active. The Biomanufacturing Excellence Act (S. 3188 and H.R. 6089), introduced in 2025, authorizes 120 million dollars for fiscal year 2026 for biomanufacturing programs. The Biomanufacturing and Jobs Act (H.R. 4832 and S. 2654) would establish a USDA task force to coordinate research, development, and market promotion of biobased products, with the stated goal of reducing reliance on petroleum-derived inputs while driving rural economic development.
The legislative activity follows the signing of the BIOSECURE Act into law in December 2025 as part of the fiscal year 2026 National Defense Authorization Act. That law prohibits federal agencies from contracting with entities that use biotechnology equipment or services from designated foreign companies of concern, creating additional urgency around domestic biomanufacturing capacity.
The USDA’s bioeconomy programs already invest hundreds of millions of dollars annually in biofuels, biobased products, and related research. Proponents argue the new bills would extend this framework to chemicals and materials that currently remain petroleum-dependent, unlocking demand for agricultural commodities beyond food and fuel.
The global synthetic biology market, which underpins much of the technology behind biobased manufacturing, was valued at 19.75 billion dollars in 2025 and is projected to reach 56.48 billion dollars by 2031, growing at a compound annual rate of 19.14 percent, according to a Mordor Intelligence analysis distributed in April 2026.
What We Don’t Know
None of the four bills has yet advanced past committee in the current session, and none has attracted significant cosponsorship beyond their original sponsors. Whether biomanufacturing incentives can compete for floor time in a Congress focused on defense authorization, artificial intelligence regulation, and ongoing budget negotiations remains uncertain.
The bills also differ on eligibility criteria and credit structures, raising questions about whether they will converge into a single legislative vehicle or compete for attention. The House’s Biobased Materials Investment and Production Act uses a flat per-pound credit, while the Senate’s Renewable Chemicals Act ties its production credit to sales price, creating potentially different incentive structures for high-value specialty chemicals versus bulk commodity products.
Industry advocates have noted a persistent infrastructure gap between laboratory demonstration and commercial-scale biomanufacturing in the United States, but the bills do not address workforce development or permitting timelines, which proponents of biomanufacturing have also identified as bottlenecks.
Analysis
The breadth of the legislative push reflects a convergence of interests that rarely aligns so neatly in Washington. Farm-state Republicans see new markets for corn, soybeans, and other agricultural commodities. Democrats see climate benefits from displacing petroleum-derived chemicals. National security hawks see supply chain resilience in the wake of the BIOSECURE Act. And the synthetic biology industry sees the policy foundation it has sought for years to close the so-called valley of death between research and commercialization.
Whether any of these bills becomes law in the 119th Congress will depend on whether biomanufacturing incentives can be attached to a must-pass vehicle such as a farm bill or tax package. The agricultural coalition backing these measures, which includes the National Corn Growers Association, the Corn Refiners Association, and the Plant Based Products Council, has experience attaching provisions to omnibus legislation. The bipartisan, bicameral nature of the effort improves the odds, but the bills remain early-stage and will need to survive the appropriations process intact.