Methane Reduction and Economic Growth Act

This bill amends the Internal Revenue Code to create a tax credit for capturing methane from mining activities. It modifies the existing carbon oxide sequestration credit (Section 45Q) to apply to methane captured from mines.

Sec. 2, Mine methane capture incentive credit: This section adds a new paragraph to the tax code for qualified methane captured from mining. The credit amount is calculated per metric ton of CO2 equivalent of qualified methane, instead of per metric ton of qualified carbon oxide. Qualified methane must be captured from mining activities (underground, abandoned, closed, or surface mines) by methane capture equipment, would otherwise be released into the atmosphere, and is measured at the source and verified at the point of injection or use. The methane must be injected into a compliant pipeline or gathering system for energy use, or used to produce heat or other energy with minimal methane release. A qualified facility is an individual source (borehole, well, or vent shaft) at a mining facility where construction begins before January 1, 2036, and methane capture equipment construction begins before that date, capturing at least 2,500 metric tons of CO2 equivalent methane per year. The credit is based on the greatest amount of methane captured in any prior year. The amendments apply to qualified methane captured after December 31, 2024.