Stefanik introduces bill to extend biomass, biogas tax credits

By Erin Voegele | October 31, 2017

Rep. Elise Stefanik, R-N.Y., recently introduced legislation that aims to extend the Section 45 production tax credit (PTC) for electricity produced from closed-loop biomass, open-loop biomass, geothermal, municipal solid waste, qualified hydropower facilities and marine and hydrokinetic facilities.

Stefanik introduced the legislation, titled the Renewable Electricity Tax Credit Equalization Act, or H.R. 4137, on Oct. 25. To date, the bill has no cosponsors.

“The North Country is the proud home of numerous renewable energy production facilities and it’s important that we ensure these clean energy sources are supported,” said Congresswoman Stefanik. “This commonsense legislation puts biomass, hydropower, geothermal and other renewable energy sources on a level playing field with wind energy facilities. All of these renewable energy sources represent a new frontier for our environment and for economic growth, and it’s important that we give them the support they need.”

The Section 45 PTC for closed-loop biomass, open-loop biomass, geothermal, municipal solid waste, qualified hydropower facilities and marine and hydrokinetic facilities expired Dec. 31, 2016. However, production tax credits for wind and solar were granted long-term extensions in late 2015. As a result, renewable technologies other than wind and solar, including biomass and biogas technologies, are subject to a significant competitive economic disadvantage in the market, particularly to investors who seek certainty with respect to tax incentives. Stefanik’s bill aims to address this disparity.    

In a press release, Stefanik explains that her bill’s extension would be on the same terms and for the same time and phase-out schedule as was provided to Section 48 solar energy property in 2015. The tax credit for solar currently stands at 30 percent for projects that begin construction before the end of 2019 and phases down to 10 percent for projects that begin construction before the end of 2022.

The Biomass Power Association, American Biogas Council and Energy Recovery Council are among the groups that have spoken out in support of Stefanik’s bill.

"Congresswoman Stefanik has been a consistent and outspoken supporter of renewable energy, including biomass," said Bob Cleaves, president of the BPA. "We are so grateful for her leadership in creating tax parity for all renewables. Tax credits can make the difference between a proposed project and a completed one, such as with the ReEnergy facility that powers Fort Drum in Rep. Stefanik's district. If this credit passes, we are hopeful that it will lead to new biomass development in areas that can sustain it."

"The biogas industry applauds the introduction of the Renewable Electricity Tax Credit Equalization Act which will fix inequities in our tax code and allow biogas systems and baseload renewable energy project development to grow," said Patrick Serfass, executive director of the ABC. "The U.S. biogas industry has the potential to build at least 13,000 new systems which would catalyze about $40 billion in new capital investments, create 335,000 construction jobs and 23,000 permanent jobs and build the infrastructure we need for recycling organic material while protecting our air, water and soil."

“The Energy Recovery Council applauds Congresswoman Stefanik for introducing legislation that would create a level playing for baseload renewable energy technologies in the federal tax code,” said Ted Michaels, president of the ERC.  “Providing waste-to-energy and other baseload renewable energy sources the same tax treatment that is afforded other renewables will help technologies like waste-to-energy compete fairly in the marketplace, while providing the myriad benefits of generating renewable electricity from post-recycled waste that would otherwise be buried.”

A full copy of the H.R. 4137 is available on Stefanik’s website. https://stefanik.house.gov/sites/stefanik.house.gov/files/STEFNY_024_xml.pdf