By Valerie Volcovici
BAKU, AZERBAIJAN (Reuters) – U.S. President Joe Biden’s administration on Tuesday finalized a methane tax on major oil and gas producers aimed at curbing emissions of the potent greenhouse gas but likely to be scrapped by the incoming presidency of Donald Trump.
The methane tax is one of the latest actions taken by the outgoing government to tackle the second most common greenhouse gas after carbon dioxide, which tends to leak undetected into the atmosphere from drilling sites, gas pipelines and other oil and gas equipment .
The fee will start at $900 per ton of methane emitted in 2024, rising to $1,200 in 2025, and $1,500 for 2026 and beyond. Under the rules, it would only apply to facilities that release more than 25,000 tons of carbon dioxide equivalent per year, according to the Environmental Protection Agency announcement.
The Biden administration announced the rule on the second day of the United Nations COP29 climate conference in Baku, Azerbaijan, including a special side event on methane.
The US had led the push for a Global Methane Pledge, a voluntary pact signed by more than a hundred countries that aims to reduce global methane emissions by 30% by 2030. The world’s largest oil and gas producer has also made cooperation on methane a core plank of its climate policy. involvement in China.
The fee is mandated by the Inflation Reduction Act 2022. The EPA finalized methane emissions standards for the oil and gas sector last year, but has not yet set rules for the fee, which is intended to penalize companies that don’t comply with those standards.
“The latest Waste Emissions Charge is the latest in a series of actions under President Biden’s Methane Strategy to improve efficiency in the oil and gas sector, support American jobs, protect clean air and advance American leadership on the global stage strengthen,” said EPA Administrator Michael. Regan said.
Methane has a greater warming potential than carbon dioxide and is broken down more quickly in the atmosphere. Reducing methane emissions can therefore quickly have an impact on limiting climate change.
The EPA estimates that this rule alone would reduce cumulative emissions by 1.2 million metric tons of methane through 2035 — the equivalent of taking nearly 8 million gasoline cars off the road for a year.
In January, the oil and gas trade group American Petroleum Institute called on Congress to repeal the fee.
After the November elections, in which Republicans are poised to take control of the Senate, House of Representatives and the presidency, the prospect of a repeal has become more likely.
