Congress considers tax credits for WTE facilities

Nov. 1 — A bill in Congress would allow for a 30% energy tax credit for qualified waste-to-energy projects, but opponents say the tax break is unnecessary and should go to “cleaner” renewable projects.

H.R. 66, filed in January, would give the tax credit for systems that use municipal solid waste or sewage sludge as feedstock for producing solid, liquid or gas fuel. The bill excludes landfills from approved projects.

A similar bill was introduced in 2010, but it did not leave committee. The bill is sponsored by six Democrats and is in the House Committee on Ways and Means.

“With the right incentives, we can tackle our unsustainable waste management and our unsustainable energy sources at the same time,” said Rep. Lloyd Doggett, D-Texas, in an emailed response to questions. “This credit ensures that we find the most environmentally sound solutions.”

Doggett is the main author of the bill.

Ananda Lee Tan, spokesperson for the Global Alliance for Incinerator Alternatives, said subsidies to support waste-to-energy facilities are a drain on the economy.

“We´d like to see public support and incentives go toward real alternative energy options like wind and solar,” he said.

The bill does not pinpoint specific types of waste-to-energy technology, giving applicants a broad possibility of facilities.

The U.S. EPA would be tasked with evaluating applications for the credit based on environmental and energy criteria. Only projects that receive the highest scores, based on cleanliness and high energy content, would get a tax credit, Doggett´s office said.

To be considered for the credit, applicants must prove that their lifecycle greenhouse gas emissions will result in a net climate benefit, Doggett´s office said. In addition, the tax credit would be capped.

“While this incentive faces an uncertain future in committee … we are continuing to build support for it among my colleagues and to make it a part of the conversation about waste management and alternative energy,” Doggett said.

Patrick Serfass, executive director of the American Biogas Council, said the group is pushing for passage, as it is open to allowing various waste-to-energy facilities besides incinerators.

“We think that favors anaerobic digestion because it´s a viable, competitive technology that creates energy,” he said.

Tan agreed that anaerobic digestion is the most promising.

“You want the highest end use of the material,” he said. “So [with anaerobic digestion], you´re making a fertilizer that you can put back into the soil instead of just burning the waste.”

There are other types of technologies that the bill would include, though. The United States lags far behind Europe in biogas technology, Serfass said, with about 10,000 operating biogas projects in Europe and only about 2,000 in the U.S. Serfass said this country could support about 11,000 biogas projects.

“The industry is very much just beginning in the United States,” he said. “But only with technology that is known. We´re trying to grow quickly and that means creating new business, new jobs and doing all that by converting waste to energy.”

Incentives are needed to level the playing field with other energy policy, Serfass said.

“The place that we´re behind right now is developing policies that keep us from wasting our waste and would instead incentivize folks to use it to make domestic, renewable base load energy,” he said.

Tan said his group opposes additional, more traditional WTE facilities because burning waste can be highly toxic.

“Burning plastics, paper bags, glass and metal and all that consists in municipal solid waste produces some really complex toxic compounds into the air that we breathe,” he said. “There´s also a huge problem with the disposal of the ash that is the end result.”

Recycling and composting are more effective, he said, and offer job growth.

“If we are going after the highest end use of these materials, we can´t be sending it to burn facilities and incentivizing that process any further,” Tan said.

Contact Waste & Recycling News reporter Jeremy Carroll at jcarroll@crain.com or 313-446-6780.