ABC seeks member support for biogas tax credit bill

By Anna Austin | November 08, 2011

The American Biogas Council is encouraging its members to help support one of its highest legislative priorities—a bill that would create an investment tax credit for biogas.

Although not yet introduced, the bill is being considered by Rep. Ron Kind, D-Wis. If passed, it would grant qualifying biogas projects parity with other renewable energy projects that already qualify for a 30 percent investment tax credit under Section 48 of the Internal Revenue Service Code of 1986.

The bill defines qualified biogas property as comprising of a system that uses anaerobic digesters or other biological, chemical, thermal or mechanical processes (alone or in combination) to convert biomass into a gas, which consists of not less than 52 percent methane, and captures the gas for use as a fuel.

Besides the tax credit, the bill would also require the government to enter into an agreement with the National Renewable Energy Laboratory to undertake a study of biogas. The agreement would require NREL to supply a written report to Congress within two years after the date of the enactment of the bill to address multiple issues, such as the quality of biogas and a comparison of biogas to natural gas and the identification of any components of biogas that make it unsuitable for injection into existing natural gas pipelines. Other issues the study would address include methods for obtaining the highest energy content in biogas, including the use of codigestion and identifying the optimal feed mixture, and recommendations for the expansion of biogas production, including an analysis of the extent to which increasing the methane content of biogas would result in its greater use and an analysis of how the expanded use of biogas could help meet the growing energy needs of the U.S.

Patrick Serfass, excutive director of the ABC, said one type of project that would benefit from the tax credit would be one that injects renewable natural gas into the gas pipeline, or uses the biogas to power cars and heavy duty vehicles.  "For example, this tax credit will help a dairy farmer who makes biogas from cow manure and then uses it to heat the buildings and power the trucks that deliver the milk," he said. "In another example, it would help a facility that takes food waste from area restaurants and grocery stores, turns their trash into biogas and then injects the renewable natural gas into the pipeline to be used by any natural gas customers."

Serfass said the idea of turning organic waste into usable, renewable biogas, is just taking off in the U.S. and it's something that should be encouraged. "Whether you've got rural farm waste, urban food waste or the sludge filtered out of wastewater, a tax incentive like this will create new jobs with every new project constructed that will put people to work turning garbage into green energy," he added.

The ABC is requesting that members write to their congressional representatives to make them aware of the legislation and urge them to support it. To view a copy of the bill, click here