Renewable Natural Gas Incentive Act of 2025

This bill amends the Internal Revenue Code of 1986 to significantly promote the increased use of renewable natural gas (RNG) by establishing a new tax credit. Its primary objectives are to reduce greenhouse gas emissions and other harmful transportation-related pollutants, thereby improving air quality, while also fostering job creation and economic opportunities throughout the United States. The legislation introduces a Renewable Natural Gas Fuel Credit of $1.00 per gallon for renewable natural gas or its gasoline gallon equivalent. This credit applies when RNG is sold for use as fuel in motor vehicles, motorboats, or aviation, or directly used by the taxpayer for these purposes. Renewable natural gas is defined as compressed or liquefied gas derived from biomass, requiring production by a registered entity and a specific producer certification. The bill includes provisions for blended renewable natural gas to qualify for the credit under specific contractual and certification conditions. Producers of RNG must register with the Secretary of the Treasury, and the credit is not applicable to RNG produced and used outside the United States. The legislation also authorizes direct payments from the Secretary to persons who sell or use eligible RNG, equal to the credit amount. These amendments take effect for fuel sold or used after December 31, 2025, with the entire program terminating after December 31, 2035.