NWRA opposes change to biogas tax credit

The National Waste & Recycling Association (NWRA), Arlington, Virginia, has announced its opposition to the U.S. Department of Treasury’s proposed change to a rule on the types of energy properties eligible for the energy tax credit, claiming a proposed exclusion of “gas upgrading equipment” runs contrary to the intent of the law.

The rule falls under Section 48 of the Internal Revenue Code, as amended by the Inflation Reduction Act of 2022 (IRA).

“Treasury has decided to exclude ‘gas upgrading equipment’ from the definition of credit-eligible ‘qualified biogas property,’ directly contradicting Congress’ goal under the IRA of driving economywide investments consistent with the administration’s climate objectives,” according to a news release from the NWRA.

The association holds the exclusion directly contradicts Congress’ goal under the IRA of driving economy-wide investments consistent with the administration’s climate objectives. The exclusion, it says, runs contrary to the Biden administration’s intent in expanding section 48 of the Tax Code to incentivize the deployment of technologies that capture methane emissions that otherwise would be emitted into the atmosphere, promote the production of advanced biofuels and reduce demand for conventional natural gas in vehicle, building and industrial applications.

RELATED: From landfills to clean energy: How the Inflation Reduction Act empowers food waste diversion projects

According to the release, the proposal, in declaring some or all of the equipment necessary to clean and condition raw biogas into a marketable product—or a gas consisting of approximately 95 percent methane content—may not be credit-eligible, “introduces a new restriction in direct contradiction of the plain language of the statute.”

The association is asking the agency reconsider its proposed exclusion of “gas upgrading equipment” from credit eligibility, and is urging members to ask Congress to reconsider the change, saying “sustainability investments are at risk if the proposed regulations are not revised.”