Renewable Natural Gas Incentive Act of 2025

119 S1252 IS: Renewable Natural Gas Incentive Act of 2025 U.S. Senate 2025-04-02 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. II 119th CONGRESS 1st Session S. 1252 IN THE SENATE OF THE UNITED STATES April 2, 2025 Mr. Tillis (for himself and Mr. Warner ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To 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. 1. Short title This Act may be cited as the Renewable Natural Gas Incentive Act of 2025 . 2. Increased credit for renewable natural gas (a) In general Section 6426 of the Internal Revenue Code of 1986 is amended— (1) in subsection (a)(2), by inserting and (l) after subsection (d) , and (2) by adding at the end the following new subsection: (l) Renewable natural gas fuel credit (1) In general For purposes of this section, the renewable natural gas fuel credit is the product of $1.00 and the number of gallons of renewable natural gas or gasoline gallon equivalents of a nonliquid renewable natural gas sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, sold by the taxpayer for use as a fuel in aviation, or so used by the taxpayer. (2) Renewable natural gas For purposes of this section, the term renewable natural gas means compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3))— (A) which was produced by a person registered under section 4101(a), and (B) with respect to which the producer has made a certification described in paragraph (4). (3) Treatment of blended renewable natural gas (A) In general Under regulations prescribed by the Secretary, a sale of blended renewable natural gas shall be treated as a sale of renewable natural gas fuel if— (i) at the time the renewable natural gas was blended with other compressed or liquefied natural gas, the taxpayer had a contract with the registered producer of such renewable natural gas for the sale of such gas for use as a fuel in a motor vehicle or motorboat, or for use as a fuel in aviation, (ii) such contract was entered into before the sale of the blended renewable natural gas and specifies the number of gallons of renewable natural gas provided for such purposes and the period for which such contract is in effect, and (iii) the registered producer of such fuel provides to the taxpayer the certification described in paragraph (4). (B) Limitation The amount of blended renewable natural gas treated as renewable natural gas under subparagraph (A) for any period shall not exceed the number of gallons of renewable natural gas specified under subparagraph (A)(ii) and certified by the producer under paragraph (4) for such period. (C) Blended renewable natural gas For purposes of this subsection, the term blended renewable natural gas means compressed or liquefied natural gas which consists of both renewable natural gas and other compressed or liquefied natural gas. (4) Certification A certification is described in this subparagraph if such certification— (A) identifies the product produced and the gallon equivalent of fuel acquired by the taxpayer for a purpose described in paragraph (1), and (B) is provided such form and manner as prescribed by the Secretary. (5) Gasoline gallon equivalent For purposes of this subsection, the term gasoline gallon equivalent means, with respect to any nonliquid renewable natural gas, the amount of such fuel having a Btu content of 124,800 (higher heating value). (6) Termination This subsection shall not apply to any sale or use for any period after December 31, 2035. . (b) Application of other rules (1) Registration The last sentence of section 6426(a) of the Internal Revenue Code of 1986 is amended by striking subsections (d) and (e) and inserting subsections (d), (e), and (l) . (2) Denial of double benefit Section 6426(h) of such Code is amended by striking subsection (d) or (e) and inserting subsection (d), (e), or (l) . (3) Fuel must be connected to the United States Section 6426(i) of such Code is amended by inserting after paragraph (2) the following new paragraph: (3) Renewable natural gas No credit shall be determined under this section with respect to any renewable natural gas which is produced outside the United States for use as a fuel outside the United States. . (4) Energy equivalency Section 6426(j) of such Code is amended— (A) by inserting or renewable natural gas, after alternative fuel , and (B) by inserting or gas after such a fuel . (c) Payments (1) In general Section 6427(e) of the Internal Revenue Code of 1986 is amended by redesignating paragraphs (3) through (6) as paragraphs (4) through (7), respectively, and by inserting after paragraph (2) the following new paragraph: (3) Renewable natural gas If any person sells or uses renewable natural gas (as defined in section 6426(k)(2)) for a purpose described in section 6426(k)(1) in such person's trade or business, the Secretary shall pay (without interest) to such person an amount equal to the renewable natural gas fuel credit with respect to such fuel. . (2) Termination Section 6427(e)(7) of such Code, as redesignated by paragraph (1), is amended by striking and at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting , and , and by adding at the end the following new subparagraph: (F) any renewable natural gas (as defined in section 6426(k)(2)) sold or used after December 31, 2035. . (3) Conforming amendments (A) Section 6427(e)(4) of such Code, as redesignated by paragraph (1), is amended— (i) by striking paragraph (1) or (2) and inserting paragraph (1), (2), or (3) , and (ii) by striking any mixture or alternative fuel and inserting any mixture, alternative fuel, or renewable natural gas . (B) Section 6427(e)(6) of such Code, as redesignated by paragraph (1), is amended by striking alternative fuel credit or alternative fuel mixture credit and inserting alternative fuel credit, alternative fuel mixture credit, or renewable natural gas fuel credit . (C) Section 6427(e)(6) of such Code, as redesignated by paragraph (1), is amended— (i) by striking paragraph (1) or (2) and inserting paragraph (1), (2), or (3) , and (ii) by striking any mixture or alternative fuel and inserting any mixture, alternative fuel, or renewable natural gas . (d) Registration Section 4101(a) of such Code is amended— (1) by striking and before every person producing second generation biofuel , and (2) by inserting , and every person producing renewable natural gas (as defined in section 6426(k)(2)) after (as defined in section 40(b)(6)(E)) . (e) Effective date The amendments made by this section shall apply to fuel sold or used in calendar quarters beginning after the date of the enactment of this Act.