Congress votes to scrap Biden-era methane fee

The Republican-controlled US Congress has moved to repeal a fee targeting methane emissions from oil and gas producers. The measure, originally part of the 2022 Inflation Reduction Act, was seen as a key initiative in former President Joe Biden's climate agenda.

The Senate voted 52-47 – along party lines – on February 28 to eliminate the Waste Emissions Charge (WEC), following a party-line vote in the House of Representatives two days earlier. This decision, almost certain to be signed by President Donald Trump, reverses a fee that was set to penalise energy companies emitting high levels of methane, starting at $900 per tonne and rising annually.

Methane is the most potent greenhouse gas (GHG), significantly contributing to the climate crisis; the fee was designed to encourage companies to reduce leaks and improve infrastructure. The US Environmental Protection Agency (EPA) had projected that the fee could result in a reduction of up to 1.2mn tonnes of methane (34mn tonnes of CO2 equivalent) annually, the equivalent of taking 8mn cars off the road for a year, the equivalent of taking 8mn cars off the road for a year, and generate more than $550bn in government revenue.

Energy Transfer, a key player in the pipeline industry, and other large oil and gas firms were not expected to meet the threshold for the fee, which targeted producers releasing more than 25,000 tCO2e per year. However, the move would have affected other large and small operators in the sector, driving overall emissions reductions and promoting better methane management practices.

The trade group American Petroleum Institute (API) welcomed the repeal, with executive vice president Amanda Eversole calling the fee “duplicative” and harmful to US energy innovation. Congressional Republicans have repeatedly used the Congressional Review Act (CRA) to undo environmental regulations from the Biden administration, including a rule requiring oil and gas companies to submit archaeological reports before beginning work on federal offshore energy leases.

The move marks a significant setback for efforts to combat climate change and curb GHG emissions. Scientists estimate that methane traps heat in the atmosphere around 80 times more effectively than CO2 in the short term. A significant portion of global methane emissions comes from the oil and gas industry, where the gas is often released during fossil fuel extraction, processing and transport.

The Biden administration had sought to tackle this issue with a federal fee that charged large energy companies $900 per tonne of excess methane emissions, rising to $1,500 by 2026. The fee was expected to incentivise energy companies to address leaks and improve infrastructure to prevent emissions.

Environmental advocates had argued that the fee was a low-cost, effective measure to cut short-term climate heating and help meet climate targets. "It’s the fastest way to reduce temperature in the short term," Marcelo Mena, CEO of the Global Methane Hub, an organisation that funds methane reduction projects, told the New York Times. He maintained that nearly half of the reductions in the oil and gas sector could be achieved at little or no cost to operators.

Despite these arguments the  Trump administration, which has pursued a policy of reducing environmental regulations and ramping up fossil fuel output, sought the fee’s repeal. The House vote, which saw six Democrats join Republicans in voting for repeal, was followed by a similar outcome in the Senate.

The law could have significant implications for the future of energy regulation in the US, especially given rising methane emissions. Methane levels in the atmosphere reached a record high in 2023, and satellite technology now provides more accurate and rapid monitoring of leaks from the energy sector.

While the US has repealed its methane fee, energy companies are likely to face increasing pressure from other regions. The European Union, for example, is introducing stricter methane standards in the coming years, which could impact US exports of natural gas. As the world's largest natural gas supplier, the US will have to meet these European standards to maintain its export market, which to Europe is of LNG.

Despite the repeal, Marcelo Mena remains optimistic, highlighting the increasing role of satellite technology in tracking emissions. New satellites, such as MethaneSAT, launched in 2024, provide detailed data on emissions worldwide, which Mena says will spur local action and encourage communities to hold energy companies accountable.

His organisation is working with local NGOs to overlay emissions data with health statistics, helping communities identify and address pollution. "It’s a great way to empower communities to see the pollution they’re being subjected to," Mena said.