A U.S. Senate bill would put algae-based biofuels on par with cellulosic biofuels in federal tax credit programs.

Algae-Based Renewable Fuel Promotion Act (H.R. 4168) would allow algae-based renewable fuels to qualify for the cellulosic biofuel tax credit and would allow production facilities — including wastewater treatment plants — to access a $1.01/gallon production tax credit.

The bill would amend Internal Revenue Codes to include algae-based biofuel for purposes of the cellulosic biofuel producer tax credit and would allow accelerated depreciation of property used to produce algae-based biofuel.

Houston-based startup Sunrise Ridge Algae Inc. is testing similar technology at Austin, Texas' Hornsby Bend Biosolids Management Plant, which receives sludge generated by the city's two wastewater plants and uses it to create compost for land application and public sales.