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Bill gives incentives for biogas, nutrient recovery investments

Legislation aims to help farmers increase investment in technologies, such as manure digesters, that improve environment.

Manure is a natural byproduct of dairy farming, rich in nutrients like phosphorus and nitrogen. In recent years, federal and state regulators have applied significant pressure on the agriculture sector to reduce nutrient output to improve water quality in dairy-producing regions ranging from the Chesapeake Bay Watershed to northern Wisconsin all the way to central Washington.

New legislation introduced in the U.S. House Ways & Means Committee on Space, Science & Technology by Reps. Ron Kind (D., Wis.) and Tom Reed (R., N.Y.) would enable dairy farmers to find new ways to reduce their environmental footprint both on their farms and in their communities. The Agriculture Environmental Stewardship Act of 2016, if adopted, will allow biogas properties and qualified manure resource recovery properties to be eligible for the federal energy credit (30% Investment Tax Credit [ITC]) and to permit new clean, renewable energy bonds to finance qualified biogas properties.

The dairy industry has invested significant private resources into proactively tackling this challenge. The solution can be found through biogas systems that mitigate the environmental impacts of farming while providing benefits to both farmers and the general public. Biogas systems, coupled with nutrient recovery technologies, can transform manure into stable fertilizer for crops, bedding for cows and fuel and electricity for the farm and nearby homes. However, the upfront capital cost of installing these systems poses a major obstacle for dairy farmers.

“This measure recognizes the value that biogas systems can have as dairy producers continue improving the sustainability of their farms, large and small, across the country,” said Jim Mulhern, president and chief executive officer of the National Milk Producers Federation (NMPF).  “Importantly, the creation of this new investment tax credit also addresses the value of nutrient recovery technologies, which can transform manure into fertilizer for crops and bedding for cows. This bill will help dairy farmers to utilize these new, often expensive technologies on their dairies.”

According to the Environmental Protection Agency, just more than 250 biogas systems are operational or under construction on dairy and hog farms, but as many as 8,000 farms have the potential to use them. In recent years, federal and state regulators have encouraged the entire agriculture sector to reduce farm nutrient output to improve water quality in crucial watersheds like the Chesapeake Bay, the Great Lakes region and the Pacific Northwest.

The Agriculture Environmental Stewardship Act is also being sponsored by the bipartisan co-chairs of the Congressional Dairy Farmer Caucus. A similar bill is expected to be introduced in the Senate this year.

The legislation was also endorsed by the American Biogas Council. "For a healthy economy, we need healthy soils and clean watersheds. Biogas and nutrient recovery systems contribute to cleaner, healthier soil and water, and the Agriculture Environmental Stewardship Act will make these systems possible,” said Patrick Serfass, executive director of the council.

Mulhern reiterated that the bill removes a potential stumbling block to more widespread use of digesters “by creating incentives to make biogas and manure resource recovery technologies more affordable, in the same way that tax incentives are used to encourage investments in other renewable energy sources. This benefits society by decreasing nutrient runoff in waterways, decreasing farm odors and improving water quality. Dairy farmers are environmental stewards who take great pride in the land, air and water quality on and around their farms.”

Bion Environmental Technologies systems can remove and recover nutrients in livestock wastewater at a fraction of the cost of traditional treatment options. Craig Scott, Bion's director of communications, said the primary reason that wide-scale implementation of manure control technologies, such as Bion's, has not occurred already is that sufficient funding sources to offset the technology adoption cost have not been available. “The federal investment tax credit has been used historically as a tool to reduce risk and stimulate investment in certain evolving sectors, such as the renewable energy sectors, and can be used to help bridge that gap," he said.

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