Methane Reduction and Economic Growth Act

Section 45Q(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

In the case of qualified methane—

(i) subsection (a)(4) shall be applied as if it read as follows:

(4) the applicable dollar amount (as determined under subsection (b)(1)) per metric ton of CO 2 e (as defined in section 45Z(d)(2)) of qualified methane which is—

(A) captured by the taxpayer using methane capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018, during the 12-year period beginning on the date the equipment was originally placed in service, and

(i) either— in a manner that does not involve more than de minimis release of methane into the atmosphere.

(I) injected by the taxpayer for energy use—

(aa) in a pipeline which—

(AA) satisfies the pipeline integrity management guidelines under part 192 of title 49, Code of Federal Regulations, and

(BB) is in compliance with instrumental leak monitoring and other preventive and mitigative measures under section 192.935 of such title, or

(bb) in a gathering system that feeds a pipeline described in item (aa), or

(II) otherwise used for producing heat (for industrial use or to heat a structure) or energy,

(ii) for purposes of subsection (d), the term qualified facility means any mining facility—

(I) the construction of which begins before January 1, 2033,

(II) for which construction of methane capture equipment begins before such date, and

(III) which captures not less than 2,500 metric tons of methane during the taxable year, and

(iii) for purposes of subsections (b)(2), (f)(1), (f)(4), (h), and (i), such subsections shall be applied—

(I) by substituting methane capture for carbon capture each place such term appears, and

(II) by substituting qualified methane for qualified carbon oxide each place such term appears.

For purposes of this paragraph, the term qualified methane means any methane which—

(i) is captured from mining activities (including underground mines, abandoned or closed mines, or surface mines) by methane capture equipment,

(ii) would otherwise be released into the atmosphere as an industrial emission of greenhouse gas or lead to such release, and

(iii) is measured at the source of capture and verified at the point of injection or utilization.

The amendment made by this section shall apply to qualified methane captured after December 31, 2023.