I
119THCONGRESS
1
STSESSION H. R. 480
To amend the Internal Revenue Code of 1986 to establish a methane border
adjustment mechanism.
IN THE HOUSE OF REPRESENTATIVES
JANUARY16, 2025
Ms. B
ROWNLEYintroduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to establish
a methane border adjustment mechanism.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Methane Border Ad-4
justment Mechanism Act’’. 5
SEC. 2. FINDINGS. 6
Congress finds the following: 7
(1) Methane is a powerful greenhouse gas, with 8
about 80 times the warming power of carbon dioxide 9
on a 20-year time horizon. 10
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(2) Rigorous estimates suggest that at least 25 1
percent of the rise in global temperatures since the 2
industrial revolution is due to methane emissions. 3
(3) Public health experts believe that methane 4
is a key contributor to the formation of ground level 5
ozone and particulate pollution, which causes a wide 6
range of cardiovascular and lung-related diseases. 7
(4) These facts suggest that methane is a 8
threat to human, animal, and plant life and health. 9
(5) The intended purpose of enacting a meth-10
ane border adjustment mechanism (MBAM) is to 11
conserve exhaustible natural resources by preventing 12
emissions and is made effective in conjunction with 13
regulations and charges on methane emissions from 14
domestic oil and natural gas producers under section 15
136 of the Clean Air Act (42 U.S.C. 7436). 16
(6) Highly cost-effective methods of reducing 17
methane emissions—such as MBAMs—have been 18
well-studied and are ready for implementation. 19
(7) Research suggests that while the impact of 20
an MBAM on the price of fossil fuels would likely 21
be minimal, it could have a significant impact on 22
methane emissions. 23
(8) By working with countries that are major 24
importers of oil and gas to enact similar MBAMs, in 25
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partnership with the European Union, having al-1
ready enacted its own border measure, the United 2
States Government can both help strengthen the 3
market for exports of clean United States gas and 4
encourage other oil and gas producing countries to 5
reduce their methane emissions. 6
SEC. 3. ESTABLISHMENT OF METHANE BORDER ADJUST-7
MENT MECHANISM. 8
(a) I
NGENERAL.—Chapter 38 of the Internal Rev-9
enue Code of 1986 is amended by adding at the end the 10
following new subchapter: 11
‘‘Subchapter E—Methane Border Adjustment 12
Mechanism 13
‘‘Sec. 4691. Methane border adjustment mechanism.
‘‘SEC. 4691. METHANE BORDER ADJUSTMENT MECHANISM.
14
‘‘(a) I
NGENERAL.—There is hereby imposed a tax 15
on any methane adjustment substance sold or used by the 16
importer thereof. 17
‘‘(b) A
MOUNT OFTAX.— 18
‘‘(1) I
N GENERAL.—The amount of tax imposed 19
under subsection (a) with respect to any methane 20
adjustment substance shall be the amount that bears 21
the same ratio to the total methane emissions charge 22
for the country in which such substance was pro-23
duced or extracted (determined for the second cal-24
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endar year preceding the calendar year of such sale 1
or use) as— 2
‘‘(A) the volume of such substance, bears 3
to 4
‘‘(B) the total volume of such substance 5
produced or extracted in such country (deter-6
mined for such second preceding calendar year). 7
‘‘(2) T
OTAL METHANE EMISSIONS CHARGE .— 8
For purposes of this section, the term ‘total methane 9
emissions charge’ means, with respect to any foreign 10
country, the total amount of charges with respect to 11
facilities located in such country which would be im-12
posed under section 136 of the Clean Air Act (42 13
U.S.C. 7436) if— 14
‘‘(A) such facilities were located in the 15
United States, and 16
‘‘(B) subsection (c) of such section were 17
applied without regard to ‘that reports more 18
than 25,000 metric tons of carbon dioxide’ and 19
all that follows. 20
Except as otherwise provided by the Secretary in 21
paragraph (4), the total methane emissions charge 22
with respect to any foreign country shall be deter-23
mined separately with respect to each methane ad-24
justment substance. 25
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‘‘(3) NATURAL GAS MEASURED BY ENERGY 1
CONTENT.—In the case of natural gas, subpara-2
graphs (A) and (B) of paragraph (1) shall each be 3
applied by substituting ‘energy content’ for ‘volume’. 4
‘‘(4) M
ETHANE ADJUSTMENT SUBSTANCES 5
PRODUCED OR EXTRACTED IN MORE THAN 1 COUN -6
TRY.—The Secretary shall provide rules for deter-7
mining the tax imposed under paragraph (1) with 8
respect to a substance which was produced or ex-9
tracted in more than 1 country which determines 10
such tax on the basis of the proportion of the pro-11
duction or extraction that occurred in such country. 12
‘‘(c) M
ETHANEADJUSTMENTSUBSTANCE.— 13
‘‘(1) I
N GENERAL.—The term ‘methane adjust-14
ment substance’ means petroleum and natural gas. 15
‘‘(2) R
ECOMMENDATION OF ADDITIONAL SUB -16
STANCES.— 17
‘‘(A) I
N GENERAL.—Not later than 2 years 18
after the date of the enactment of this Act, and 19
each 2 years thereafter, the Secretary shall sub-20
mit a written report to Congress regarding 21
whether additional substances that are reliant 22
on oil and natural gas as a feedstock in indus-23
trial processes, or otherwise have notable em-24
bodied methane emissions, should be added to 25
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the list of methane adjustment substances sub-1
ject to this section. 2
‘‘(B) C
ONSULTATION.—In assessing sub-3
stances to recommend for inclusion under this 4
paragraph, the Secretary shall consult with the 5
United States International Trade Commission 6
and International Trade Administration on 7
whether domestic producers, including specific 8
domestic facilities, have lower embodied meth-9
ane emissions than producers in other coun-10
tries. 11
‘‘(C) A
NALYSIS.—Each report under this 12
paragraph shall be accompanied by an analysis 13
prepared by the Secretary, after consultation 14
with the United States International Trade 15
Commission, of— 16
‘‘(i) the effect of the proposed expan-17
sion of the methane border adjustment 18
mechanism to include additional sub-19
stances, and 20
‘‘(ii) the economic, employment, and 21
environmental costs in the United States if 22
the expansion does not include such addi-23
tional substances. 24
‘‘(d) E
STIMATES.— 25
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‘‘(1) IN GENERAL.—The total methane emis-1
sions charge, and the amount described in sub-2
section (b)(1)(B), with respect to any foreign coun-3
try for any calendar year shall be determined by the 4
Secretary on the basis of publicly available informa-5
tion. 6
‘‘(2) E
STABLISHMENT OF INTERNATIONAL 7
BODY TO COLLECT AND REPORT INFORMATION .— 8
The Secretary, in consultation with the governments 9
of countries that are major importers and exporters 10
of methane adjustment substances, shall facilitate 11
the establishment of an international body respon-12
sible for providing for international consultations for 13
the establishment of interoperable standards, estab-14
lishing a multi-stage certification process to track 15
emissions throughout supply chains, and collecting 16
and reporting data related to methane emissions. 17
Standards developed under the preceding sentence 18
shall be updated not less frequently than every 2 19
years. 20
‘‘(e) A
LTERNATIVETAXBASED ONSUPPLYCHAIN 21
E
MISSIONS.— 22
‘‘(1) I
N GENERAL.—In the case of any methane 23
adjustment substance which meets the requirements 24
of paragraph (2), the Secretary shall establish an al-25
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ternative method (in lieu of subsection (b)) for de-1
termining the amount of tax imposed under sub-2
section (a) which takes into account only such sub-3
stance’s pro rata share of the charges which would 4
be imposed under section 136 of the Clean Air Act 5
(42 U.S.C. 7436) (determined with the adjustments 6
described in subparagraphs (A) and (B) of sub-7
section (b)(2)) with respect to facilities in the supply 8
chain of such methane adjustment substance. 9
‘‘(2) R
EQUIREMENTS.—The requirements of 10
this paragraph are met if— 11
‘‘(A) the importer of the methane adjust-12
ment substance provides the Secretary such in-13
formation as the Secretary may require to de-14
termine all of the facilities in the supply chain 15
of such substance, the total production of such 16
facilities, and the relevant methane emissions 17
therefrom, and 18
‘‘(B) each country in which such facilities 19
are located is a country with which the Cus-20
toms–Trade Partnership Against Terrorism (C– 21
TPAT) has signed mutual recognition arrange-22
ments with the customs administration of such 23
country.’’. 24
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(b) INTERNATIONAL COOPERATION ON METHANE 1
B
ORDERADJUSTMENTMECHANISMS.—The Secretary of 2
the Treasury (or the Secretary’s delegate) shall encourage 3
the 10 countries with the highest oil and gas imports that 4
do not yet have methane border adjustment mechanisms 5
to— 6
(1) implement equally stringent border adjust-7
ment mechanisms, and 8
(2) participate in the creation of the inter-9
national body referred to in section 4691(d)(2) of 10
the Internal Revenue Code of 1986, as added by this 11
section. 12
(c) C
LERICALAMENDMENT.—The table of sub-13
chapters for chapter 38 of the Internal Revenue Code of 14
1986 is amended by adding at the end the following new 15
item: 16
‘‘SUBCHAPTER E—METHANE BORDER ADJUSTMENT MECHANISM ’’.
(d) EFFECTIVEDATE.—The amendments made by 17
this section shall apply to sales and uses after December 18
31, 2025. 19
Æ
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