Methane Reduction and Economic Growth Act

This bill amends the Internal Revenue Code to create a tax credit for capturing methane from mining activities, called the mine methane capture incentive credit.

Sec. 2, Mine methane capture incentive credit: The bill adds a new paragraph to section 45Q of the tax code. For qualified methane captured from mines, the existing carbon oxide credit is modified: the credit amount is per metric ton of CO2e of qualified methane instead of per metric ton of qualified carbon oxide, and the equipment is called methane capture equipment. The methane must be injected into a pipeline meeting federal safety and leak monitoring standards, or used for heat or other energy with minimal methane release. A qualified facility is any individual methane source (like a borehole or well) at a mining facility, built before 2036, with methane capture equipment built before that date, capturing at least 2,500 metric tons of CO2e methane per year. Qualified methane is methane captured from mining activities (underground, abandoned, closed, or surface mines) that would otherwise be released into the atmosphere, measured at capture and verified at injection or use. Methane capture equipment connects a qualified facility to a pipeline or energy generation equipment. The amendments apply to qualified methane captured after December 31, 2024.