Congress quietly hands energy firms $1/gallon subsidy with no climate guarantee
S. 1252 — Renewable Natural Gas Incentive Act of 2025 · Filed by Thom Tillis (R-NC) · 1 cosponsor · Introduced Apr 2, 2025 · Referred to committee
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What it does
This bill creates a federal tax credit of $1.00 per gallon for renewable natural gas (RNG) — gas derived from biomass like agricultural waste and landfill methane — when sold or used as fuel for vehicles, boats, or aircraft. The credit applies through 2035 and includes blended RNG (mixed with conventional natural gas), with direct government payments to producers and sellers. It benefits energy companies and fuel producers who develop or distribute RNG.
Why we flagged it
The bill's core mechanism is a direct per-gallon tax credit and government payment to RNG producers and sellers — a classic energy-sector subsidy. While framed as renewable energy incentive, it functions as corporate welfare with no sunset on the subsidy amount or public accountability for climate outcomes.
What the text implies
- The $1/gallon credit is uncapped and open-ended — no aggregate spending limit, meaning total cost to the Treasury is unknown and could grow substantially if RNG production scales.
- The bill does not require or measure actual greenhouse-gas reduction — it subsidizes RNG production regardless of whether it displaces fossil fuels or merely supplements existing supply.
The full analysis lists 5 implications of this text.
Who stands to gain
renewable natural gas producers; energy companies with RNG operations; natural gas utilities and distributors