Methane Reduction and Economic Growth Act

This bill creates a federal tax credit to reward companies that capture methane from mines instead of letting it escape into the air. It applies to methane from underground, surface, and abandoned or closed mines, as long as the gas is actually captured with dedicated equipment, measured at the source, and verified where it’s injected into a pipeline or used for energy. The captured methane must be sent through safe, monitored pipelines or used to produce heat or other energy with only minimal leaks. The goal is to cut a powerful greenhouse gas while putting it to work as fuel.

To qualify, a mine site needs to start construction before 2036, install methane-capture equipment by then, and capture at least 2,500 metric tons of methane (measured as CO2-equivalent) in a year. The credit is calculated per metric ton of methane captured, using rules adapted from the existing carbon capture credit. The changes apply to methane captured after December 31, 2024.

• Who is affected: Companies and sites that capture methane from mining operations, including abandoned or closed mines.
• What changes: A new per-ton tax credit for captured mine methane, with allowed uses including pipeline transport or on-site energy generation under safety and low-leak standards.
• When it starts: For methane captured after December 31, 2024; qualifying facilities must begin construction before January 1, 2036.
• Key requirements: Minimum 2,500 metric tons captured per year; measurement and verification at capture and use points; compliance with pipeline safety and monitoring rules if piped.