02/02/2024 - Inflation Reduction Act - Methane Regulation

The Inflation Reduction Act’s Waste Emission Charge for Methane Emissions—What Did Congress Require and How is EPA Proposing to Implement the Program?

by Carrie Jenks

On January 12, 2024, EPA released proposed regulations to implement the Inflation Reduction Act’s Waste Emission Charge (WEC). While the statute specifies the amount and timing of the charge and certain exemptions, it also directs EPA to implement the WEC provisions. In this legal analysis, we explain how the text of the IRA established the framework that EPA must follow, and the flexibility that EPA may be able to include in the final rule consistent with the statute.

We also highlight potential tension points for stakeholders as they consider how to implement programs to comply with this rule as well as the additional EPA rules for the oil and natural gas sector.

The ability of the sector to maximize methane emissions reductions will depend on the aggregate impact of the requirements and incentives included in EPA’s multiple regulations, including how EPA finalizes the WEC rule based on stakeholder feedback, how EPA finalizes subpart W reporting requirements, and how EPA implements the NSPS OOOOb/EG OOOOc rules under section 111 of the Clean Air Act. EPA has extended the comment period on the proposal to March 26, 2024.

We will be tracking each of these steps. Keep updated on the methane rules here and sign up for our monthly Regulatory Tracker emails.