Sponsors (2)
The bill boosts domestic renewable natural gas production and lowers fuel costs by providing a per-gallon refundable credit and clear payment procedures, but it shifts fiscal costs to taxpayers and adds compliance and timing limits that may complicate long-term investment and blending flexibility.
Domestic RNG producers and sellers receive a $1.00-per-gallon refundable credit for qualifying sales, improving project economics and encouraging more RNG production.
Motor vehicle, marine, and aviation fuel users can gain access to cheaper RNG-based fuel options as suppliers pass along savings from the credit, lowering fuel costs for some consumers and commercial operators.
Rural communities and U.S. energy workers benefit from a credit limited to domestically produced RNG, supporting domestic energy supply, climate goals, and national energy resilience.
Taxpayers fund the refundable credit, increasing federal outlays and potentially adding to deficit pressure or crowding other budget priorities.
Small RNG producers face new registration and certification requirements, creating additional administrative costs, paperwork burdens, and compliance time.
Limiting the credit to U.S.-produced RNG and only through 12/31/2035 reduces access to international supply options and creates uncertainty for long-term project planning and investment.
Based on analysis of 2 sections of legislative text.
Creates a $1.00-per-gallon federal tax credit for U.S.-produced renewable natural gas used or sold as motor, marine, or aviation fuel, through Dec 31, 2035.
Introduced April 2, 2025 by Thomas Roland Tillis · Last progress April 2, 2025
Creates a new federal tax credit that pays $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 their RNG, excludes RNG produced and used outside the United States, and applies only to sales or uses through December 31, 2035. The credit is payable under existing fuel payment rules (without interest), includes special rules for blended RNG, updates cross-references to prevent double benefits and to reflect energy-equivalency rules, and takes effect for calendar quarters beginning after enactment.