Bill aims to create $1 per gallon sales tax credit for RNG fuel

By Erin Voegele | July 21, 2022

Sens. Richard Burr, R-N.C., and Mark Warner, D-Va., on July 20 introduced the Renewable Natural Gas Incentive Act. The legislation aims to create a $1 per gallon tax credit for sellers of renewable natural gas (RNG) used for transportation.

“Renewable natural gas offers an affordable, reliable, and sustainable transportation fuel for industries across America,” Burr said. “This bill provides a tax credit to keep our country’s trucks and buses moving, lowering the cost of doing business while improving air quality, decreasing our reliance on foreign energy, and creating high-paying jobs. I am proud to work with Senator Warner on this commonsense bill that will support American energy independence for years to come.”

“Renewable natural gas is a clean, affordable, and reliable fuel source that can help lower emissions from heavy-duty vehicles,” Warner said. “I am proud to introduce legislation to incentivize investment in clean vehicles that will have a positive impact on our environment while significantly aiding in the transition to a clean energy economy.”

The text of the legislation explains that the $1 credit would be available for each gallon of RNG or gasoline gallon equivalent of non-liquid RNG sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, sold by the taxpayer for use as a fuel in aviation, or so used by the taxpayer. The tax credit would be in place through the end of 2032.

Following its introduction, the bill, S.B. 4568, was referred to the Senate Committee on Finance. The legislation currently has no other cosponsors.

Clean Energy Fuels Corp. has spoken out in support of the legislation. “Renewable natural gas is gaining momentum as a transportation fuel because it tackles the issue of climate change immediately and cost effectively. Large fleets like UPS, Amazon, Waste Management and the transit agencies in New York City and LA are operating tens of thousands of vehicles every day with it,” said Andrew J. Littlefair, CEO and president of Clean Energy. “But more should be done to encourage the use of this incredibly clean fuel and this legislation introduced by Senators Warner and Burr does that.

“Because RNG captures harmful greenhouse gases at the source – like dairies and other agriculture facilities – and at the vehicle, it is rated the cleanest fuel in the world, many times cleaner than electric vehicles,” he added. “The tax credit in S.B. 4568 should give the transportation industry a turbo charge to make the switch to RNG, while adding much needed support for the country’s dairy farmers.

“The bipartisan approach to this legislation demonstrates the win-win-win nature of RNG – addressing climate change, providing an affordable alternative fuel for U.S. fleets, and helping our farmers,” Littlefair continued. “We applaud Senators Warner and Burr and encourage quick adoption.”

A full copy of S.B. 4568 can be downloaded from Burr’s website