Senate bill aims to provide tax incentive for biogas projects

By Erin Voegele | July 26, 2021

Sens. John Thune, R-S.D., and Sherrod Brown, D-Ohio, on July 22 introduced the Agricultural Environmental Stewardship Act, a bill that aims to provide tax incentives for farmers and rural electric cooperatives that invest in biogas technology. Companion legislation was introduced in the U.S. House of Representatives by Reps. Ron Kind, D-Wisc., and Tom Reed, R-N.Y., in June.

The bipartisan legislation aims to encourage investment in biodigester and nutrient recovery systems while establishing a market for farmers who already have a surplus of waste materials that can be used for biogas production. The bill provides a 30 percent investment tax credit to help offset the upfront costs associated with building biodigester systems. Qualifying projects would include digesters or other biological, chemical, thermal or mechanical processes to make biogas that is at least 52 percent methane.

 “This bill is a commonsense solution to help South Dakota’s dairy producers, boost our economy, and better preserve our environment,” Thune said. “I’d like to thank Senator Brown and our colleagues in the House for this bipartisan effort to invest in sustainable biogas technology and American jobs, and I look forward to working to get this bill enacted into law.”

 “Ohio farmers are struggling to safely dispose of livestock waste that could be used for renewable energy,” Brown said. “This legislation will encourage investment in the technology needed to convert these waste materials into renewable fuel that can be used to power farms, households, and businesses across the country. We need to do all we can to protect Lake Erie and our waterways, and this bill provides another tool to ensure clean water.”  

Several versions of the bill have been introduced in recent years. Provisions of the Agricultural Environmental Stewardship Act were also included in the comprehensive Growing Renewable Energy and Efficiency Now (GREEN) Act, introduced earlier this year.

The American Biogas Council has spoken out in support of the legislation. "The American Biogas Council applauds the leadership of Senators Sherrod Brown and John Thune in recognizing the importance of anaerobic digesters and nutrient recovery technologies in helping farmers turn an environmental challenge into a sustainable opportunity,” said Patrick Serfass, executive director of the ABC. “Digesters and nutrient recovery technologies are materials management powerhouses which turn manure and other organic materials into energy and valuable soil amendments while reducing odor and protecting our air and water. This tax credit will provide a significant boost to agricultural producers wanting to invest in this impactful technology.”