Congress quietly hands energy firms $1/gallon subsidy with no climate guarantee

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.
• Blended RNG (mixed with conventional natural gas) qualifies for the full credit, creating incentive to blend rather than use pure RNG, potentially diluting climate benefit.
• Direct government payments (Section 6427) bypass normal appropriations process, making the subsidy harder to track or cap in future budgets.
• Registration requirement (Section 4101) creates administrative burden on small producers but does not prevent large energy companies from capturing most of the subsidy.

Who it affects

The bill may reduce emissions and support renewable energy development (a public benefit), but the $1/gallon subsidy is a direct transfer to energy companies with unclear public return — the cost to taxpayers is not capped, and the climate benefit per dollar spent is unspecified. Citizens bear the tax cost; energy producers capture the subsidy.

Who stands to gain

• renewable natural gas producers
• energy companies with RNG operations
• natural gas utilities and distributors
• biomass-to-energy firms
• oil and gas majors with RNG divisions

Named in the bill

Internal Revenue Code Section 6426, Internal Revenue Code Section 6427, Internal Revenue Code Section 4101, Internal Revenue Code Section 45K, U.S. Treasury, Renewable natural gas (RNG), Biomass, Energy sector

Where it stands

2 cosponsors: 2 Democrats.

• Apr 2, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Apr 2, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

6 lobbying clients named this bill on 8 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $3,911,000 in lobbying spend. A filing names 8 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 82% of bills with at least one filing.

Thom Tillis, the sponsor, reported $973,475 in PAC receipts in the 2026 cycle.

• UPS (united Parcel Service) — $1,500,000 on 1 filing
• American Public Transportation Association — $1,100,000 on 2 filings
• American Trucking Associations — $720,000 on 1 filing
• Waste Management, Inc. — $370,000 on 2 filings
• The Transport Project Fka Ngvamerica — $141,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.