Renewable Natural Gas (RNG) is continuing to build momentum in the policy arena, especially as a cleaner transportation fuel. The latest development is the introduction of the bipartisan Renewable Natural Gas Incentive Act of 2025, a bill that proposes a $1.00 per gasoline gallon equivalent tax credit for RNG used or sold as transportation fuel. The credit would also apply to certified blended RNG and is designed to run through 2035—offering long-term support and encouraging investment in this growing sector.
At RINSTAR, we previously reported on RNG’s inclusion in the Renewable Fuel Standard (RFS) through the 2024 Biogas Regulatory Reform Rule (BRRR). This new legislation builds on that foundation by shifting away from mandates and toward financial incentives. While the RFS requires refiners and importers to meet renewable fuel volume obligations or purchase Renewable Identification Numbers (RINs), the RNG Act introduces a straightforward tax credit model. This approach is less complex, aiming to drive adoption through a straightforward incentive rather than a regulatory requirement. The tax credit would be funded directly through the federal budget.
The bill, introduced by Rep. Brian Fitzpatrick, Rep. Linda Sánchez, Senator Thom Tillis, and Senator Mark Warner, is modeled after the existing Alternative Fuels Tax Credit. In retail transactions, the credit would go to the seller, while in private fueling situations, it would benefit the fuel user. Importantly, each gallon of RNG would be eligible for either the Alternative Fuels Tax Credit or the new RNG Fueling Credit—but not both. To qualify, taxpayers must secure a certification from the RNG producer, confirming the type of fuel and its renewable gas content, similar to the system already used for biodiesel.
Industry voices are also weighing in. “Because RNG captures harmful greenhouse gases at the source—like dairies and other agriculture facilities—and at the vehicle, it is rated the cleanest fuel in the world, many times cleaner than electric vehicles”, said Andrew Littlefair, CEO and President of Clean Energy Fuels Corp.
The RNG Incentive Act of 2025 joins a series of legislative efforts aimed at reducing greenhouse gas emissions, enhancing U.S. energy security, creating clean energy jobs, and expanding access to affordable, low-carbon fuel alternatives.
At RINSTAR, we’ve been monitoring developments in the RFS and renewable fuels landscape for over 15 years. To stay current on key policy changes, subscribe to our newsletter and explore more updates on our blog.