ISSUE: The hydrogen production tax credit in the Inflation Reduction Act (IRA) Section
45V has unique potential to create a new, long-term, sustainable market for dairy
renewable natural gas (RNG) produced by on-farm anaerobic digesters. Yet the current
proposed rule from the Department of Treasury does not include the use of dairy RNG in
the production of clean hydrogen as a qualified pathway for the production tax credit.
AMERICAN AGRI-WOMEN REQUEST: We ask you to urge Treasury Secretary
Yellen to publish timely guidance to implement the tax credit in a manner that maximizes
opportunities to reduce methane emissions at U.S. dairy farms by including RNG
pathways for the clean hydrogen production tax credit under Section 45V.
BACKGROUND: Today, the U.S. has approximately 475 on-farm anaerobic digesters
that are capturing methane and recycling animal waste, while producing renewable
energy and beneficial soil products. According to the American Biogas Council, the U.S.
currently has the potential to build more than 15,000 new biogas systems, which would
create significant economic, environmental and energy benefits. Section 45V provides the
economic incentives needed to build thousands of new digester projects, including many
on smaller dairies across the country.
It's imperative to include dairy RNG in the Section 45V program to enable farmers to
participate in the market for clean hydrogen which will drive significant GHG emissions
reductions and provide much needed additional revenue opportunities for dairy farmers.
A Section 45V credit that incorporates avoided methane benefits has the potential to
dramatically improve the RNG and dairy industry’s capacity to help the U.S. achieve its
2030 commitments under the Global Methane Pledge.
Farmers take their responsibility to steward our environment seriously. Access to science,
technology and innovation is key to the future success of American food producers, while
providing environmental benefits for all.
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