While the tax code is clearly not responsible for a bulk of the current boom in RNG, the recent tax reform signed into law at the end of 2017 may very well be an additional catalyst to help spur RNG investment to new heights.
By Doug Lamb and Durham McCormick, with support from the Coalition for Renewable Natural Gas.
The Renewable Fuel Standard is the primary federal policy that drives development of renewable natural gas (RNG) projects. Since the advent of the RFS’s modern cellulosic biofuel provisions in 2014, new investment in RNG projects has grown steadily. The number of online RNG projects has increased from approximately 45 in early 2015 to at least 65 by the end of 2017, with another 21 presently under construction, according to the Coalition for Renewable Natural Gas.
The RNG industry made these gains despite the 2016 expiration of a host of temporary tax provisions designed to spur renewable energy development, including the Section 45 production tax credit for nonwind renewable energy technologies such as landfill gas projects, the second-generation biofuel credit, and the tax credit for alternative fuel vehicle refueling property.
While the tax code is clearly not responsible for a bulk of the current boom in RNG, the recent tax reform signed into law at the end of 2017 may very well be an additional catalyst to help spur RNG investment to new heights.