Clean energy tax credits could boost fossil fuels — report

By Brian Dabbs | 10/29/2024 06:42 AM EDT

Gas plants may be able to claim the lucrative credits even if they don’t decrease on-site emissions, according to a Friends of the Earth report shared first with POLITICO’s E&E News.

A separator removes solids from cow manure at Wickstrom Jersey Farms in Hilmar, California.

A separator removes solids from cow manure at Wickstrom Jersey Farms on May 9 in Hilmar, California. The farm uses a dairy digester to capture methane from cow manure, which generates energy in an effort to reduce greenhouse gas emissions. Noah Berger/AP

The Treasury Department’s proposed rules for clean electricity tax credits would be a boon for natural gas power plants, according to a new report from Friends of the Earth.

The report, shared first with POLITICO’s E&E News, takes aim at the proposal’s use of “book-and-claim” accounting. That approach would allow gas plants to qualify for the new tax credits by purchasing offsets — including those generated by capturing methane from farms and landfills.

The fossil fuel and agriculture industries have urged the Biden administration to adopt that accounting method. But Friends of the Earth asserts that doing so could upend the climate goals of the Inflation Reduction Act.

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“This scheme would create a nesting doll of climate devastation at every layer,” the report says. “Utilities would be subsidized to continue investing in new fossil gas power. Factory farms and landfills selling biogas offsets would be incentivized to maximize and concentrate pollution rather than adopt more sustainable practices.”

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