US biogas industry supports bill to provide tax incentives for nutrition recovery

The American Biogas Council (ABC), the trade association for the US biogas industry, supports a newly introduced bill to provide increases tax credits to biogas producers.

The Agriculture Environmental Stewardship Act (HR 5489), introduced by Representatives Tom Reed (R-NY) and Ron Kind (D-WI), provides a 30% investment tax credit (ITC) for qualifying biogas and nutrient recovery systems.

ABC says the Act will increase the sustainability of farms by helping to deploy new nutrient recovery and biogas systems to recycle organic material into baseload renewable energy and healthy soil products.

"For a healthy economy, we need healthy soils and clean waterways. Biogas and nutrient recovery systems contribute to cleaner, healthier soil and water and the Agriculture Environmental Stewardship Act will make these systems possible,” said Patrick Serfass, Executive Director of the American Biogas Council.

Currently no tax incentive exists for nutrient recovery systems, which ABC says farms increasingly need to properly manage the nutrients found in raw manure.

Only biogas projects that generate electricity are eligible for a production tax credit under Section 45 of the federal tax code, omitting other energy uses like production of pipeline quality natural gas and compressed renewable natural gas vehicle fuel.

The new legislation has received cross-party support in the US House of Representatives from 12 Republican and Democratic leaders in addition to the lead authors.

The US has currently more than 2,100 sites producing biogas, and a recent industry assessment conducted with the USDA, EPA and DOE as part of the Federal Biogas Opportunities Roadmap estimates nearly 11,000 sites are ripe for development.

If fully realised, these new biogas systems could produce enough energy to power 3.5 million US homes and reduce emissions equivalent to removing up to 11 million passenger vehicles from the road.

It would also result in an estimated $33 billion (€29.3bn) in construction spending, creating approximately 275,000 short-term construction jobs and 18,000 permanent jobs to operate the biogas systems and manage ongoing business activities.