Key Takeaways
- • Apollo Global Management acquired approximately $11.1 million in Inflation Reduction Act (IRA) investment tax credits from OPAL Fuels Inc., marking one of the first tax credit transactions in the renewable natural gas (RNG) industry following recent IRS regulatory clarification.
- • The transaction involves tax credits tied to the Emerald RNG facility, one of North America's largest landfill RNG facilities, with the ITC credits sourced from qualified biogas property under the IRA framework.
- • Recent IRS corrections to Proposed Regulations clarified key provisions affecting investment tax credit eligibility for qualified biogas property, establishing this deal as a benchmark transaction for future RNG tax credit acquisitions.
- • Mayer Brown's multidisciplinary team, led by Tax partner JoonBeom Pae and Tax partner Isaac Maron, facilitated the transaction alongside Banking & Finance and Tax associates across New York and Washington DC offices.
Summary
Mayer Brown advised Apollo Global Management Inc., a leading global alternative asset manager and retirement solutions provider, on the acquisition of approximately $11.1 million in Inflation Reduction Act investment tax credits from OPAL Fuels Inc., a renewable natural gas and renewable power company. The transaction centers on OPAL Fuels' share of investment tax credits (ITCs) generated from the Emerald RNG facility, one of the largest landfill RNG facilities operating in North America.
This deal represents a significant milestone in the emerging RNG tax credit market. The transaction occurred in the immediate aftermath of the IRS's correction to its Proposed Regulations governing investment tax credits for qualified biogas property. The regulatory clarification addressed key provisions that directly impact ITC eligibility determinations, establishing clearer guidelines for future transactions in this sector. As one of the first RNG industry tax credit transactions executed following this regulatory resolution, the Apollo-OPAL deal serves as a benchmark for subsequent market participants navigating the evolving tax credit landscape under IRA guidelines.
The Mayer Brown engagement leveraged a multidisciplinary team structure combining tax expertise with banking and finance capabilities. The deal was led by Tax partner JoonBeom Pae and included Tax partner Isaac Maron (Washington DC office), along with Banking & Finance associates Martin Gualino and Menachem Feinblum, and Tax associate Amit Neuman (all based in the New York office). This cross-functional approach underscores the complexity inherent in structuring IRA tax credit transactions, which require integrated knowledge of renewable energy incentives, tax regulations, and structured finance mechanics.
This deal represents a significant milestone in the emerging RNG tax credit market. The transaction occurred in the immediate aftermath of the IRS's correction to its Proposed Regulations governing investment tax credits for qualified biogas property. The regulatory clarification addressed key provisions that directly impact ITC eligibility determinations, establishing clearer guidelines for future transactions in this sector. As one of the first RNG industry tax credit transactions executed following this regulatory resolution, the Apollo-OPAL deal serves as a benchmark for subsequent market participants navigating the evolving tax credit landscape under IRA guidelines.
The Mayer Brown engagement leveraged a multidisciplinary team structure combining tax expertise with banking and finance capabilities. The deal was led by Tax partner JoonBeom Pae and included Tax partner Isaac Maron (Washington DC office), along with Banking & Finance associates Martin Gualino and Menachem Feinblum, and Tax associate Amit Neuman (all based in the New York office). This cross-functional approach underscores the complexity inherent in structuring IRA tax credit transactions, which require integrated knowledge of renewable energy incentives, tax regulations, and structured finance mechanics.
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