Proposed bill expands tax credit to biogas-based RNG

By Anna Simet | June 21, 2016

A bill recently introduced to the House Ways and Means Committee on Space, Science and Technology would add more biogas applications to the list of technologies that qualify for the federal Section 45 investment tax credit.

The bipartisan bill was introduced by Reps. Tom Reed, R-N.Y., and Ron King, D-Wis., and signed by an additional 12 House members. The Agriculture Environmental Stewardship Act, or H.R. 5489, would allow additional types of biogas energy projects, including those generating pipeline-quality natural gas and compressed renewable natural gas vehicle fuel, to quality for the 30 percent tax credit. Currently, only biogas-based electricity projects are eligible.

The bill would also qualify nutrient recovery systems and manure resource recover property—technologies that transforms digestate into soil fertilizer or cow bedding—for the credit, as well as permit their financing via new clean renewable energy bonds.

The bill directs the U.S. Secretary of the Treasury to enter into an agreement with Golden, Colorado-based National Renewable Energy Laboratory to undertake a biogas study that will address the quality of biogas, methods for obtaining the highest energy content in biogas, and recommendations for the expansion of biogas production, and to provide a report within two years.

The American Biogas Council has backed the bill and said it will support farms in properly managing nutrients found in raw manure, in turn protecting waterways and enriching soils. The National Milk Producers Federation has always expressed support for H.R. 5489.

A similar bill is expected to be introduced in the Senate.