Sponsors (2)
The bill accelerates U.S. RNG production and makes lower-carbon fuels cheaper by paying domestic sellers $1/gallon and providing an administrative claims path, but it shifts costs to taxpayers, adds compliance burdens for producers, limits long-term market options by restricting eligibility to U.S. production through 2035, and introduces transactional complexity for blended fuels.
Domestic RNG producers (including small biogas businesses and energy workers) receive a $1.00 per gallon credit for qualifying sales, improving project economics and encouraging more U.S. RNG production.
Motor vehicle, marine, and aviation fuel users (including commuters and transportation workers) can access cheaper RNG-based fuel options as suppliers pass along savings from the credit.
Rural communities and energy-sector workers benefit because the credit is limited to domestically produced RNG, supporting U.S. energy security and domestic climate goals.
Taxpayers ultimately fund the $1.00-per-gallon credit through direct payments, which increases government spending or could add to deficit pressure.
Energy project developers and small RNG producers face reduced flexibility and long-term planning uncertainty because the credit is limited to U.S.-produced RNG and only applies through December 31, 2035.
Small RNG producers and certifying entities must comply with new registration and certification rules, creating additional administrative costs and paperwork burdens.
Based on analysis of 2 sections of legislative text.
Creates a $1.00-per-gallon refundable tax credit for qualifying domestic renewable natural gas used as transportation fuel through 12/31/2035.
Official title: Amend the Internal Revenue Code of 1986 to promote the increased use of renewable natural gas, to reduce greenhouse gas emissions and other harmful transportation-related emissions that contribute to poor air quality, and to increase job creation and economic opportunity throughout the United States.
Introduced April 2, 2025 by Thomas Roland Tillis · Last progress April 2, 2025
Creates a refundable fuel credit of $1.00 per gallon (or gasoline-gallon-equivalent) for renewable natural gas (RNG) that is sold or used as fuel in motor vehicles, motorboats, or aircraft. The credit requires producers to register and certify qualifying RNG, excludes RNG produced and used outside the United States, applies special rules for blended RNG, and is available for sales/uses through December 31, 2035. The credit is added to the Internal Revenue Code as a new subsection, is payable under existing payment rules for fuel credits, updates cross-references to prevent double benefits and ensure energy-equivalency, and becomes effective for calendar quarters beginning after enactment.