S1252-119

1. Short title This Act may be cited as the Renewable Natural Gas Incentive Act of 2025.

2. Increased credit for renewable natural gas Section 6426 of the Internal Revenue Code of 1986 is amended— in subsection (a)(2), by inserting and (l) after subsection (d), and by adding at the end the following new subsection: For purposes of this section, the renewable natural gas fuel credit is the product of $1.00 and the number of gallons of renewable natural gas or gasoline gallon equivalents of a nonliquid renewable natural gas 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. For purposes of this section, the term renewable natural gas means compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3))— which was produced by a person registered under section 4101(a), and with respect to which the producer has made a certification described in paragraph (4). Under regulations prescribed by the Secretary, a sale of blended renewable natural gas shall be treated as a sale of renewable natural gas fuel if— at the time the renewable natural gas was blended with other compressed or liquefied natural gas, the taxpayer had a contract with the registered producer of such renewable natural gas for the sale of such gas for use as a fuel in a motor vehicle or motorboat, or for use as a fuel in aviation, such contract was entered into before the sale of the blended renewable natural gas and specifies the number of gallons of renewable natural gas provided for such purposes and the period for which such contract is in effect, and the registered producer of such fuel provides to the taxpayer the certification described in paragraph (4). The amount of blended renewable natural gas treated as renewable natural gas under subparagraph (A) for any period shall not exceed the number of gallons of renewable natural gas specified under subparagraph (A)(ii) and certified by the producer under paragraph (4) for such period. For purposes of this subsection, the term blended renewable natural gas means compressed or liquefied natural gas which consists of both renewable natural gas and other compressed or liquefied natural gas. A certification is described in this subparagraph if such certification— identifies the product produced and the gallon equivalent of fuel acquired by the taxpayer for a purpose described in paragraph (1), and is provided such form and manner as prescribed by the Secretary. For purposes of this subsection, the term gasoline gallon equivalent means, with respect to any nonliquid renewable natural gas, the amount of such fuel having a Btu content of 124,800 (higher heating value). This subsection shall not apply to any sale or use for any period after December 31, 2035. The last sentence of section 6426(a) of the Internal Revenue Code of 1986 is amended by striking subsections (d) and (e) and inserting subsections (d), (e), and (l). Section 6426(h) of such Code is amended by striking subsection (d) or (e) and inserting subsection (d), (e), or (l). Section 6426(i) of such Code is amended by inserting after paragraph (2) the following new paragraph: No credit shall be determined under this section with respect to any renewable natural gas which is produced outside the United States for use as a fuel outside the United States. Section 6426(j) of such Code is amended— by inserting or renewable natural gas, after alternative fuel, and by inserting or gas after such a fuel. Section 6427(e) of the Internal Revenue Code of 1986 is amended by redesignating paragraphs (3) through (6) as paragraphs (4) through (7), respectively, and by inserting after paragraph (2) the following new paragraph: If any person sells or uses renewable natural gas (as defined in section 6426(k)(2)) for a purpose described in section 6426(k)(1) in such person's trade or business, the Secretary shall pay (without interest) to such person an amount equal to the renewable natural gas fuel credit with respect to such fuel. Section 6427(e)(7) of such Code, as redesignated by paragraph (1), is amended by striking and at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting , and, and by adding at the end the following new subparagraph: any renewable natural gas (as defined in section 6426(k)(2)) sold or used after December 31, 2035. Section 6427(e)(4) of such Code, as redesignated by paragraph (1), is amended— by striking paragraph (1) or (2) and inserting paragraph (1), (2), or (3), and by striking any mixture or alternative fuel and inserting any mixture, alternative fuel, or renewable natural gas. Section 6427(e)(6) of such Code, as redesignated by paragraph (1), is amended by striking alternative fuel credit or alternative fuel mixture credit and inserting alternative fuel credit, alternative fuel mixture credit, or renewable natural gas fuel credit. Section 6427(e)(6) of such Code, as redesignated by paragraph (1), is amended— by striking paragraph (1) or (2) and inserting paragraph (1), (2), or (3), and by striking any mixture or alternative fuel and inserting any mixture, alternative fuel, or renewable natural gas. Section 4101(a) of such Code is amended— by striking and before every person producing second generation biofuel, and by inserting , and every person producing renewable natural gas (as defined in section 6426(k)(2)) after (as defined in section 40(b)(6)(E)). The amendments made by this section shall apply to fuel sold or used in calendar quarters beginning after the date of the enactment of this Act. (l)Renewable natural gas fuel credit(1)In generalFor purposes of this section, the renewable natural gas fuel credit is the product of $1.00 and the number of gallons of renewable natural gas or gasoline gallon equivalents of a nonliquid renewable natural gas 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. (2)Renewable natural gasFor purposes of this section, the term renewable natural gas means compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3))— (A)which was produced by a person registered under section 4101(a), and(B)with respect to which the producer has made a certification described in paragraph (4).(3)Treatment of blended renewable natural gas(A)In generalUnder regulations prescribed by the Secretary, a sale of blended renewable natural gas shall be treated as a sale of renewable natural gas fuel if—(i)at the time the renewable natural gas was blended with other compressed or liquefied natural gas, the taxpayer had a contract with the registered producer of such renewable natural gas for the sale of such gas for use as a fuel in a motor vehicle or motorboat, or for use as a fuel in aviation, (ii)such contract was entered into before the sale of the blended renewable natural gas and specifies the number of gallons of renewable natural gas provided for such purposes and the period for which such contract is in effect, and(iii)the registered producer of such fuel provides to the taxpayer the certification described in paragraph (4).(B)LimitationThe amount of blended renewable natural gas treated as renewable natural gas under subparagraph (A) for any period shall not exceed the number of gallons of renewable natural gas specified under subparagraph (A)(ii) and certified by the producer under paragraph (4) for such period.(C)Blended renewable natural gasFor purposes of this subsection, the term blended renewable natural gas means compressed or liquefied natural gas which consists of both renewable natural gas and other compressed or liquefied natural gas.(4)CertificationA certification is described in this subparagraph if such certification—(A)identifies the product produced and the gallon equivalent of fuel acquired by the taxpayer for a purpose described in paragraph (1), and(B)is provided such form and manner as prescribed by the Secretary. (5)Gasoline gallon equivalentFor purposes of this subsection, the term gasoline gallon equivalent means, with respect to any nonliquid renewable natural gas, the amount of such fuel having a Btu content of 124,800 (higher heating value). (6)TerminationThis subsection shall not apply to any sale or use for any period after December 31, 2035.. (3)Renewable natural gasNo credit shall be determined under this section with respect to any renewable natural gas which is produced outside the United States for use as a fuel outside the United States.. (3)Renewable natural gasIf any person sells or uses renewable natural gas (as defined in section 6426(k)(2)) for a purpose described in section 6426(k)(1) in such person's trade or business, the Secretary shall pay (without interest) to such person an amount equal to the renewable natural gas fuel credit with respect to such fuel.. (F)any renewable natural gas (as defined in section 6426(k)(2)) sold or used after December 31, 2035..