Emergency Stabilization Act Includes Incentives for Rentech and Other Alternative Energy Producers
Rentech, Inc. (AMEX:RTK) today announced that the Company believes the enactment of the Emergency Stabilization Act is a positive step toward creating financial stability in the marketplace. The inclusion of several tax provisions in the Act will greatly benefit Rentech’s efforts in domestic alternative fuels production.
Rentech has a commercial pipeline of both biomass and fossil based projects utilizing the Rentech Process, a patented and proprietary technology that converts synthesis gas from carbon-bearing resources into hydrocarbons that can be processed and upgraded into ultra clean synthetic jet and diesel fuels.
The Stabilization Act contains several provisions that will promote the domestic development of synthetic jet and diesel fuels facilities. In particular, it extends and expands the alternative fuel excise tax credit, further demonstrating growing support for ultra clean fuels facilities that use the Fischer-Tropsch process. The Act also expands the credit to include aviation fuel, which aligns well with Rentech’s planned production at its proposed facilities. While the Act includes a carbon capture requirement of 75% at a synthetic fuels production facility, Rentech’s current design plans for its proposed facilities will meet or exceed that standard.
The Stabilization Act extends and expands the renewable diesel tax credit. The credit is increased from $0.50 per gallon to $1 per gallon and expanded to include aviation fuel. Fuels production through biomass conversion using the Rentech Process will qualify.
In addition, the $500 million Investment Tax Credit for Coal Gasification for facilities that gasify coal for industrial purposes was expanded to include facilities that produce transportation fuel. Rentech’s proposed synthetic transportation fuels facilities that use coal as the primary feedstock would qualify.
The legislation also creates a carbon dioxide capture credit of $20 per ton credit for carbon dioxide injected into geological formations and $10 per ton credit for captured carbon dioxide for use in enhanced oil recovery. The captured carbon dioxide produced at Rentech’s proposed Natchez facility is designated to be sold under an existing long-term agreement with Denbury Resources for enhanced oil recovery in the region. The Company is also exploring opportunities for injection of captured carbon dioxide into geological formations. Both forms of carbon dioxide sequestration would qualify for the credit.
Finally, the Act reinstates favorable expensing provisions for new refineries. Rentech projects that produce transportation fuels, regardless of feedstock, would qualify under the Refinery Expensing provision.
Commenting on the passage of the Stabilization Act, D. Hunt Ramsbottom, President and CEO of Rentech, stated, “Rentech is pleased that Congress has passed this important legislation which will support the efforts of Rentech and other domestic alternative energy producers. It demonstrates Washington’s commitment to reducing our nation’s reliance upon foreign oil through advancing technologies and processes for converting diverse domestic resources into clean fuels.”
About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com), incorporated in 1981, provides clean energy solutions. The Rentech Process is a patented and proprietary technology that converts synthesis gas from biomass and fossil resources into hydrocarbons that can be processed and upgraded into ultra-clean synthetic fuels, specialty waxes and chemicals. These energy resources include natural gas, biomass, municipal solid waste, petroleum coke and coal. Rentech Energy Midwest Corporation manufactures and sells fertilizer products including ammonia, urea ammonia nitrate, urea granule and urea solution to the corn-belt region.
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 about matters such as Rentech’s project pipeline, the carbon capture design of the proposed projects and their qualifications under the provisions of the Emergency Stabilization Act. These statements are based on management’s current expectations and actual results may differ materially as a result of various risks and uncertainties. Factors that could cause actual results to differ from those reflected in the forward-looking statements are set forth in the Company’s press releases and periodic public filings with the Securities and Exchange Commission, which are available via Rentech’s web site at www.rentechinc.com. The forward-looking statements in this press release are made as of the date of this release, and Rentech does not undertake to revise or update these forward-looking statements, except to the extent that it is required to do so under applicable law.