DENVER—President Donald Trump’s first 100 days in office were a rollicking rollercoaster of reversals and repeals of Biden administration renewable energy policies, but it’s the next 100 days or so that have the $6.5 billion U.S. biogas industry on edge.
With the Republican-controlled Congress looking to slash as much as $2 trillion from the federal budget in a heated reconciliation process likely to last into summer, tax credits and federal grants “have a big target on their back,” according to Jonathan Hirte of DTE (Detroit Edison) Energy.
The company’s director of federal affairs said Washington’s backing for renewables, especially during the Biden administration, spurred investment in non-carbon energies such as wind, solar, and biogas.
Lumping biogas in with wind and solar is short-sighted, he said.
“We’re talking about a domestic energy source. It is benefiting, largely, folks in rural America, although you can find projects in every type of congressional district,” Hirte said.
And it can be used to generate electricity.
The process produces 50–70 percent methane, as well as 25–50 percent carbon dioxide and some other byproducts like hydrogen sulfide.
The methane can be extracted and used in heating, electricity generation, and powering vehicles.
The organic solid residue that remains can be used as fertilizer.
Believed to be under consideration for the cutting block are financial incentives in the Renewable Fuel Standard in the Energy Policy Act of 2005, and an array of tax credits and programs included in 2022’s Inflation Reduction Act (IRA), such as the Clean Fuel Production Credit, its Section 48 Investment Tax Credit, Clean Electricity “tech neutral” credits, and, perhaps, its Section 45Q tax credit for carbon sequestration.
“These Inflation Reduction Act tax policies benefited most of the people in this room,” Waste Management Director of Regulatory Affairs Michael Jensen said.
He noted “a sizable number” of House Republicans “just say, ‘Let’s cut all of the IRA-era tax credits.’”
“That would be, you know, an easy solution moving forward” in adopting a budget, Jensen said, but a blow to the nation’s renewable energies industry, which includes biogas.
The Senate appears more amenable to saving some IRA programs, especially the carbon sequestration tax credits, and many Republicans are getting “a lot of pushback” from constituent businesses and industries because there’s “a lot of support for certain biofuels in the agricultural sector” and among the American Biogas Council’s 400 corporate members and 6,000 individual professionals, Jensen noted.
Jessica Bennett, a partner at Washington-based consulting firm AJW, said: “I think there is an understanding on Capitol Hill by Congress how important some of these energy tax credits are, despite them being part of the Biden administration’s IRA package. They’ve heard that message, and they’re getting it loud and clear.”
However, it may not matter, she said, as one way or another, renewable energies are unlikely to be further subsidized or supported by the federal government.
“There are a few options on the table for some of these clean energy tax credits, which include shortening payouts for the credits, tightening eligibility requirements, and then limiting the monetization of the credits,” she said.
According to the council, the United States’ biogas industry spans approximately 2,500 systems across all 50 states, including 1,180 at water treatment plants, 609 on dairy farms, and 583 at landfills.
The trapped methane generates enough electricity to power 2.4 million homes a year nationwide, but is primarily used as a transportation fuel, in powering farm operations, and increasingly as an aviation fuel.
The International Maritime Organization will soon adopt a policy promoting it for ocean-going ships.
The council maintains that “if fully realized,” it could power as many as 19.5 million homes a year.
‘All Is Not Lost’
Junction Strategies Principal Rod Snyder said while critical rhetoric about favorable subsidies to renewable energies hasn’t wavered, behind the scenes, there is recognition that at least some of the programs must be retained.He said the Environmental Protection Agency and departments of Energy and Agriculture “have been asked to go through the exercise of rebranding, not necessarily to wipe all of these programs off the map but to pause, rebrand, and then go back … in terms of grants and funding everything.”
Jensen noted that this is already happening.
With Trump’s return to the White House, “we’re not really working on climate issues, but in some ways, there’s also just a rebranding of programs that are not climate-focused but might still achieve the same objective,” he said.
There are “clear distinctions” between what’s likely to be eliminated and what will probably survive, Jensen said.
For instance, the Greenhouse Gas Reduction Fund, among the “signatures of the Biden administration,” is a near-certain goner.
“The Trump administration is attempting to zero some of those things out and they’ve been very clear on that. In other areas, they’re kind of changing the names but largely leaving it intact,” he said.
Examples include the Department of Agriculture’s Partnership for Climate Smart Commodities program, which has been retained as is but renamed to Advancing Markets for Producers.
There is also the Sustainable Aviation Fuel program, which is now called the Synthetic Aviation Fuel program.
“I can’t tell the difference,” Jensen said. “It’s largely the same [program] but with just some little bit of different emphasis.”
American Biogas Council Vice President for Policy Heather Dziedzic said, “Absolutely everything is possible.”
“Everything’s on the table, especially given the huge financial hurdle in front of [Congress]. But we also see that some might be more at risk of a clean sweep than others.”
She encouraged the 2,200 attending the trade show, which features more than 350 vendors, to join the council in lobbying lawmakers in Washington or to reach out—often and forcefully—to their elected representatives to ensure they understand the industry and its impacts.
“All is not lost,” Jensen said, although the industry may need to “reframe some objectives.”
