Sponsors (2)
The bill provides direct federal payments to make renewable natural gas more competitive and spur adoption (reducing emissions), but does so at measurable federal cost, with new compliance requirements, limits on eligible supply, and a sunset that creates long‑term investment uncertainty.
RNG producers and sellers receive $1.00 per gallon (or gasoline‑gallon‑equivalent) for RNG sold or used as vehicle, boat, or aviation fuel, paid as direct Treasury payments (not just a tax reduction), increasing revenue and near‑term cash flow for RNG suppliers and small energy businesses.
Drivers, fleet operators, and communities benefit because the credit makes RNG more price-competitive with fossil fuels for motor vehicles, boats, and aircraft, encouraging wider RNG adoption and likely reducing greenhouse gas emissions and local air pollution.
Energy industry participants (producers, distributors, regulators) get clearer rules because the bill defines gasoline‑gallon‑equivalent for nonliquid RNG, providing regulatory certainty for credit calculation and transactions.
All taxpayers may indirectly bear the fiscal cost of the $1/gge credit through higher federal deficits or reallocated federal spending, reducing funds available for other priorities or increasing borrowing costs.
Small fuel distributors and users must comply with new registration and producer‑certification rules, imposing administrative burdens and compliance costs that could be significant for small businesses.
RNG eligibility is limited to registered/certified U.S. producers and for U.S. use, excluding some foreign‑produced RNG and narrowing the eligible supply, which could raise prices or restrict access for fuel buyers.
Based on analysis of 2 sections of legislative text.
Establishes a $1.00/gal tax credit for renewable natural gas sold or used as transportation fuel, with registration/certification and a Dec 31, 2035 termination.
Introduced April 2, 2025 by Thomas Roland Tillis · Last progress April 2, 2025
Creates a federal tax credit of $1.00 per gallon (or gasoline-gallon-equivalent) for renewable natural gas (RNG) sold or used as fuel in motor vehicles, motorboats, or aviation, through December 31, 2035. The credit requires producer registration and certification, defines the gasoline-gallon-equivalent Btu value for nonliquid RNG, applies to blended fuels under set rules, and directs the Treasury to pay the credit (without interest) to taxpayers who sell or use RNG in a trade or business. Changes apply to fuel sold or used in calendar quarters beginning after enactment.