Methane Reduction and Economic Growth Act

The Methane Reduction and Economic Growth Act adds a new mine methane capture incentive under the existing 45Q framework. The bill creates a credit for “qualified methane” captured from mining activities (including underground, surface, abandoned, or vent facilities) and measured as carbon dioxide equivalent (CO2e). The credit is designed to incentivize capturing methane that would otherwise be released to the atmosphere, with the captured methane either injected into pipelines/gathering systems or used to generate energy or heat, provided methane releases remain de minimis. To qualify, a methane facility must begin construction before January 1, 2036 and capture at least 2,500 metric tons of CO2e in a given tax year. The credit aligns with the 45Q framework by using similar calculation mechanics and by substituting methane for carbon oxide in the relevant provisions. The amendments apply to methane captured after December 31, 2024.