Democratic lawmakers push for biogas tax incentives

Source: Amanda Peterka, E&E reporter • Posted: Friday, March 1, 2013

A pair of Democratic House members this week floated legislation that would expand tax incentives for gas produced from renewable sources like animal manure.

The bill introduced Wednesday by Reps. Ron Kind (D-Wis.) and John Lewis (D-Ga.) would allow “biogas” technology to qualify for a 30 percent investment tax credit, putting the renewable source of energy on par with solar. Biogas, the lawmakers said, helps reduce agricultural waste and runoff along with providing a source of energy.

“By investing in new technologies, like biogas power, we can boost our energy security while generating income for farmers and reducing greenhouse gas emissions,” Kind and Lewis wrote in a recent letter to colleagues. “As we did with other non-renewable and renewable energy supplies, we helped nascent industries grow by encouraging investment in that technology and the Biogas Investment Tax Credit does just that.”

The U.S. tax code is currently designed to give incentives only to certain biogas facilities that produce electricity. The legislation would expand those incentives by allowing all types of biogas to qualify for the credit. The bill would also allow biogas to qualify for bond financing.

Under the bill, several types of facilities that produce biogas would qualify for the tax incentive, including agricultural anaerobic digesters, landfill gas facilities and wastewater treatment facilities. Along with producing electricity, those facilities also commonly produce bio-methane that can flow through natural gas pipelines and compressed renewable natural gas that can be used to fuel cars.

The legislation would apply only to biogas that is at least 52 percent methane, though most biogas in the market is in the 60- to 70-percent range.

Kind and Lewis introduced the legislation last year, but the bill died in committee.

The American Biogas Council, which represents all types of biogas facilities, applauded the measure. The council has been pushing for expansion of the investment tax credit for several years to help biogas compete in a marketplace of cheap natural gas.

“We thank the members Congressman Kind and Congressman Lewis for their leadership on this issue,” said Ted Niblock of the American Biogas Council. “We’re very appreciative of them for recognizing this as something that needed to be done. … There are many good and important uses for biogas that do not involve producing electricity that we have always felt deserve the same incentives.”