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FTZ Board Considers Production Requests for Fuel Cell, LNG Facilities

Monday, November 26, 2018
Sandler, Travis & Rosenberg Trade Report

Fuel Cell Facilities. The Foreign-Trade Zones Board has received from the City of San Jose, Calif., grantee of FTZ 18, a notification of proposed production activity at the Bloom Energy Corporation facilities within subzone 18l in Sunnyvale and Mountain View, Calif., which are used for the production of commercial fuel cells and related subassemblies. Comments are due by Jan 2.

Production under FTZ procedures could exempt Bloom from customs duty payments on the foreign-status components used in export production. On its domestic sales, for the specified foreign-status materials and components, Bloom would be able to choose the duty rates that apply to piping manifolds, water distribution modules, fuel processing units, fuel cell power modules (DC generators), nickel iron alloy fuel cell power module enclosures (housings), power inverters, and energy storage and distribution modules (duty rates range from free to 3.8 percent)

Bloom would also be able to avoid duty on foreign-status components that become scrap or waste. In addition, customs duties could possibly be deferred or reduced on foreign-status production equipment.

LNG Facility. The FTZ Board has received from Lake Charles Harbor and Terminal District, grantee of FTZ 87, a notification of proposed production activity at a Driftwood LNG LLC facility currently proposed for construction within subzone 87G in Sulphur, Louisiana, which will be used for liquified natural gas processing. Comments are due by Jan 2.

Production under FTZ procedures could exempt Driftwood from customs duty payments on the foreign-status gaseous natural gas (duty-free) used in export production. On its domestic sales, for the foreign-status gaseous natural gas, Driftwood would be able to choose the duty rates that apply to liquified natural gas and stabilized condensate by-product (duty rates are free and 10 cents per barrel, respectively).

Driftwood would also be able to avoid duty on foreign-status components that become scrap or waste. In addition, customs duties could possibly be deferred or reduced on foreign-status production equipment.

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