New $1-per-gallon tax credit targets renewable natural gas used in vehicles

What does this do?

HR 2596 creates a $1.00 tax credit for every gallon of renewable natural gas used to power motor vehicles, boats, or aircraft. The credit runs from 2026 through 2035 and covers fuel made from organic waste such as landfill gases, animal manure, or plant matter. Blended fuels qualify if the renewable portion is properly documented, but only fuel produced and used in the United States is eligible.

Who does it affect?

The credit applies to energy companies, fuel producers, trucking companies, and bus fleets that sell or use qualifying fuel. Farmers, waste management companies, and landfill operators who produce renewable natural gas could also benefit as suppliers.

Why does it matter?

Businesses that cannot use the credit as a tax deduction can receive it as a direct cash payment from the government instead. People who use public transit, shipping services, or buy goods moved by natural gas-powered vehicles could be indirectly affected, as could the economics of fuel supply chains.

What does it cost, and who pays?

• $1.00 credit per gallon used
• Cash payment option if credit unused
• No double-claiming across programs