Biogas industry applauds proposed tax credit act

Biogas Investment Tax Credit Act would make biogas eligible for 30 percent investment tax credit.

August 7, 2014
REW Staff

Sen. Chuck Schumer, D-New York, has introduced the Biogas Investment Tax Credit Act of 2014 (S. 2739), a move applauded by the American Biogas Council (ABC), a Washington-based trade association for the U.S. biogas industry. The tax credit, introduced in late July 2014, would provide a 30 percent investment tax credit (ITC) for qualifying biogas technologies and add biogas to the list of renewable energy technologies that already receive a 30 percent federal investment tax credit.

The introduction of S. 2739 reflects the importance that biogas can play in our nation's energy mix, says ABC. While biogas projects that generate electricity are eligible for a production tax credit under Section 45 of the federal tax code, currently no comparable tax incentive exists for the production of renewable biogas when it is used for purposes other than electricity generation, the association says.

“To be able to recycle organic materials that today are mostly disposed of in a manner that contributes to global warming, we must build more biogas systems,” says Patrick Serfass, executive director of the ABC. “We thank Senator Schumer for sponsoring of the Biogas Investment Tax Credit Act which recognizes the full value that biogas systems can contribute as renewable energy generators—not just their role in producing renewable electricity.”

Biogas systems recycle organic materials in fully enclosed biological systems that both capture the naturally created methane to create electricity and fuel and also produce nutrient-rich soil amendments designed to reduce the need for synthetic fertilizers.

According to the Biogas Opportunities Roadmap, created by several federal agencies, the United States currently has more than 2,000 sites producing biogas. The Roadmap’s authors say that with the proper support more than 11,000 additional biogas systems could be deployed in the United States. If fully realized, ABC says these biogas systems could produce enough energy to power more than 3 million American homes and reduce methane emissions equivalent to 4 to 54 million metric tons of greenhouse gas emissions in 2030, equivalent to the annual emissions of between 800,000 and 11 million passenger vehicles.