American Biogas Council: Tax Credits for Clean Fuels Should Be Technology NeutralAmerican Biogas Council: Tax Credits for Clean Fuels Should Be Technology Neutral

While Treasury took action to clarify the seemingly obvious fact that low-carbon fuel tax credits should accrue to renewable natural gas (RNG) producers, the agency’s guidance preceded issuance of the GREET45ZCF model, by which fuel producers must assess emissions rates. Absent this information, the industry cannot assess the true impacts of the guidance.

Furthermore, given Treasury’s recent reliance on the Department of Energy’s flawed Counterfactual Assessment for biogas, referenced in other guidance released within the last month, the biogas industry is pessimistic that the Administration will get it right for this clean fuels production tax credit. These tax credits are supposed to be technology neutral, rewarding the clean energy sources that reduce carbon emissions the most. Instead, we’ve seen again and again, the Treasury and Energy Departments ignore the demonstrated and verified emission benefits of biogas and RNG systems. If the current pattern is not corrected, this would significantly limit the value of otherwise qualified fuels, arbitrarily penalizing RNG in what was designed as a technology-neutral incentive.

Biogas and RNG projects recycle manure, food waste, wastewater, and landfill gas into renewable fuel, investments that benefit both rural and urban communities alike. When they do that, emissions are reduced from both the material they recycle and the displaced fossil fuels from the biogas they produce. Biogas systems often reduce carbon emissions at a rate that’s three to six times faster than a comparably sized solar or wind project. When policymakers ignore these facts, they pick technology winners instead of rewarding the industries that actually reduce emissions the most. It's bad for the environment and bad for domestic businesses. It’s unfortunate that Treasury has made these perverse choices to hurt clean fuel producers using American equipment and labor, the opposite of what was intended by Congress.

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