To amend section 45Q of the Internal Revenue Code of 1986 to establish the mine methane capture incentive credit.

To amend section 45Q of the Internal Revenue Code of 1986 to establish the mine methane capture incentive credit.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

SEC. 2. Mine methane capture incentive credit.

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

“(10) METHANE CAPTURE.—

“(A) IN GENERAL.—In the case of qualified methane—

“(i) paragraph (4) of subsection (a) shall be applied—

“(I) by substituting ‘per metric ton of CO2e (as defined in section 45Z(d)(2)) of qualified methane’ for ‘per metric ton of qualified carbon oxide’,

“(II) by substituting ‘methane capture equipment’ for ‘carbon capture equipment’, and

“(III) by applying the following in lieu of subparagraph (B) thereof:

“ ‘(B) either—

“ ‘(i) injected by the taxpayer for energy use—

“ ‘(I) in a pipeline which satisfies the pipeline integrity management guidelines of section 192 of title 49, Code of Federal Regulations, and is in compliance with instrumental leak monitoring and other preventive and mitigative measures under section 192.935 of title 49, Code of Federal Regulations, or

“ ‘(II) in a gathering system that feeds a pipeline described in subclause (I), or

“ ‘(ii) otherwise used for producing heat (for industrial use or to heat a structure) or other energy, in a manner that does not involve more than de-minimis release of methane into the atmosphere' for ‘used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage',’

“(ii) the term ‘qualified facility’ shall mean any individual source of qualified methane such as borehole, well, or vent shaft constructed at a mining facility—

“(I) the construction of which begins before January 1, 2036,

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

“(III) which captures not less than 2,500 metric tons of CO2e methane during the taxable year, and

“(iii) this section shall be applied by substituting ‘methane capture’ for ‘carbon capture’ and ‘qualified methane’ for ‘qualified carbon oxide’ in subsections (b)(2), (f)(1), (f)(4), (h), and (i)(1).

“(B) QUALIFIED METHANE DEFINED.—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 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.

“(C) METHANE CAPTURE EQUIPMENT DEFINED.— For purposes of this paragraph, the term ‘methane capture equipment’ means equipment built to connect a qualified facility to—

“(i) a preexisting or new pipeline system, or

“(ii) to energy generation equipment, to capture qualified methane from such source.”.

(b) Effective date.—The amendments made by this section shall apply to qualified methane captured after December 31, 2024.