On January 22, APGA submitted comments in response to the Internal Revenue Service’s (IRS) proposed rulemaking that would update the types of energy property eligible for the investment tax credit to include “qualified biogas property.” Through the comments, APGA urged the IRS to align its rulemaking with the plain language of the authorizing statute.
In 2022, President Biden signed the Inflation Reduction Act (IRA), which amended Section 48 of the Internal Revenue Code (IRC) in a number of ways, including by updating the types of energy property eligible for the energy credit. However, in its efforts to promulgate Congress’s intent through this rulemaking, the IRS inappropriately narrowed the definition of “qualified biogas property” to exclude gas upgrading equipment that is necessary to bring a biogas mixture up to a viable renewable natural gas (RNG) fuel.
In the comments, APGA argues that excluding gas upgrading equipment is contrary to the statutory language, especially as the equipment must be part of a system that captures gas “for sale or productive use.” Without being brought to pipeline quality or relevant equipment specifications, biogas can miss out on both sale and productive use, as required by Congress. Furthermore, APGA argues that such treatment of biogas property is arbitrary and capricious, as the IRS treats electric upgrading property for purposes of transmission differently.
A copy of APGA’s comment letter is available here.
A public hearing on these proposed regulations is tentatively scheduled to be held on February 20, 2024, at 10:00 a.m. ET. If held, requests to attend the public hearing must be received by 5:00 p.m. on February 15, 2024.
For questions on this article, please contact Stuart Saulters of APGA staff by phone at 202-802-0493 or by email at ssaulters@apga.org.