Bioenergy trade bodies welcome house introduction of the GREEN Act
In the United States (US), the House Ways and Means Committee released a discussion draft for the Growing Renewable Energy and Efficiency Now (GREEN) Act, which expands and creates new renewable energy tax incentives. The Committee describes the bill as “a comprehensive approach to tackling climate change by using the tax code to extend and expand renewable energy use and reduce greenhouse gas emissions.”
The Bill includes the Section 25D(a) residential credit amendment sought in the Biomass Thermal Utilization (BTU) Act but excludes Section 48(a)(3)(A) incentive for business and commercial systems.
Biomass Thermal Energy Council (BTEC), an association of biomass fuel producers, appliance manufacturers and distributors, supply chain companies, and non-profit organizations applauds the inclusion of the Section 25D(a) credit for residential biomass heating property that has been sought through the BTU Act, but does not expand the investment tax credit to larger commercial systems outlined in the BTU Act.
We are pleased with the House Ways and Means Committee inclusion of incentives for residential biomass heating systems, which will incentivize the deployment of highly efficient, state-of-the-art renewable wood heating systems. However, the exclusion of incentives for business and commercial wood heating systems misses a major opportunity to help businesses lower high heating costs through the use of renewable wood and biomass fuels, said Jeff Serfass, BTEC Executive Director.
The GREEN Act does expand the business credit for other technologies, including battery storage, waste heat capture, and biogas. It also extends current renewable energy tax incentives and creates new models to increase the use of green energy while reducing greenhouse gas (GHG) emissions. According to BTEC The bill will:
- Promote the use of green energy technologies and incentivize the reduction of GHG emissions through new and existing tax benefits,
- Increase energy efficiency and green energy use in both residential and commercial buildings,
- Support the use of zero-emission transportation and supporting infrastructure,
- Invest in a green workforce through energy credits for manufacturers,
- Advance environmental justice through tax credits for research and academic programs, and
- Require the Treasury Department to analyze the feasibility of a price on greenhouse gas emissions, using the EPA’s Greenhouse Gas Reporting Program.
For the American Biogas Council (ABC), the GREEN Act has several provisions that support the biogas industry including three initiatives that the ABC has sought:
- the creation of an investment tax credit (ITC) for renewable natural gas (RNG) – and heat-based biogas systems;
- the extension of the Section 45 production tax credit, and related ITC, for electricity-biogas systems;
- and the extension of the Alternative Fuel Excise Tax Credit for biogas and renewable natural gas used as a vehicle fuel.
According to the ABC, the comprehensive inclusion of incentives for all sectors of the biogas and RNG industries “signals that we’ve reached a greater understanding” of the benefits that biogas systems can bring beyond renewable electricity and that it is a “major step in the right direction.”
Specifically, the GREEN Act includes an extension of the Section 45 Production Tax Credit for biogas to electricity for five years until 2024. It also includes a retroactive two years for these projects since the credit expired on December 31, 2017.
The Act also establishes a new 30 percent ITC for RNG- and heat-based biogas systems, the Agricultural Environmental Stewardship Act, for five years through 2024 and a phase-down until 2026. The Act also extends the 50 cents per gallon Alternative Fuels Excise Tax Credit through 2021, with a phase-down until 2024.
The biogas industry greatly appreciates the Ways and Means Committee’s response to our requests to create parity in our tax code. The lack of equity has slowed growth of our industry and the GREEN Act is a clear signal that its authors agree it’s time to get more biogas systems built,” “Our economy will be stronger and our climate better protected when we use these incentives to build more biogas systems to recycle organic material into renewable energy and soil products. We remain hopeful that the bill will pass the House, advance in the Senate and be signed into law by President Trump, said Patrick Serfass, Executive Director of the ABC.