I 

118TH CONGRESS 

2D SESSION H. R. 8962 

To amend the Internal Revenue Code of 1986 to establish a methane border 

adjustment mechanism. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2024 

Ms. BROWNLEY introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to establish 

a methane border adjustment mechanism. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Methane Border Ad5 justment Mechanism Act’’. 

6 SECTION 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Methane is a powerful greenhouse gas, with 

9 about 80 times the warming power of carbon dioxide 

10 on a 20-year time horizon. 


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1 (2) Rigorous estimates suggest that at least 25 

2 percent of the rise in global temperatures since the 

3 industrial revolution is due to methane emissions. 

4 (3) Public health experts believe that methane 

5 is a key contributor to the formation of ground level 

6 ozone and particulate pollution, which causes a wide 

7 range of cardiovascular and lung-related diseases. 

8 (4) These facts suggest that methane is a 

9 threat to human, animal, and plant life and health. 

10 (5) The intended purpose of enacting a meth11 ane border adjustment mechanism (MBAM) is to 

12 conserve exhaustible natural resources by preventing 

13 emissions and is made effective in conjunction with 

14 regulations and charges on methane emissions from 

15 domestic oil and natural gas producers under section 

16 136 of the Clean Air Act (42 U.S.C. 7436). 

17 (6) Highly cost-effective methods of reducing 

18 methane emissions—such as MBAMs—have been 

19 well-studied and are ready for implementation. 

20 (7) Research suggests that while the impact of 

21 an MBAM on the price of fossil fuels would likely 

22 be minimal, it could have a significant impact on 

23 methane emissions. 

24 (8) By working with countries that are major 

25 importers of oil and gas to enact similar MBAMs, in 


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1 partnership with the European Union, having al2 ready enacted its own border measure, the United 

3 States Government can both help strengthen the 

4 market for exports of clean United States gas and 

5 encourage other oil and gas producing countries to 

6 reduce their methane emissions. 

7 SEC. 3. ESTABLISHMENT OF METHANE BORDER ADJUST8 MENT MECHANISM. 

9 (a) IN GENERAL.—Chapter 38 of the Internal Rev10 enue Code of 1986 is amended by adding at the end the 

11 following new subchapter: 

12 ‘‘Subchapter E—Methane Border Adjustment 

13 Mechanism 

‘‘Sec. 4691. Methane border adjustment mechanism. 

14 ‘‘SEC. 4691. METHANE BORDER ADJUSTMENT MECHANISM. 

15 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 

16 on any methane adjustment substance sold or used by the 

17 importer thereof. 

18 ‘‘(b) AMOUNT OF TAX.— 

19 ‘‘(1) IN GENERAL.—The amount of tax imposed 

20 under subsection (a) with respect to any methane 

21 adjustment substance shall be the amount that bears 

22 the same ratio to the total methane emissions charge 

23 for the country in which such substance was pro24 duced or extracted (determined for the second calVerDate Sep 11 2014 23:21 Aug 14, 2024 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8962.IH H8962

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1 endar year preceding the calendar year of such sale 

2 or use) as— 

3 ‘‘(A) the volume of such substance, bears 

4 to 

5 ‘‘(B) the total volume of such substance 

6 produced or extracted in such country (deter7 mined for such second preceding calendar year). 

8 ‘‘(2) TOTAL METHANE EMISSIONS CHARGE.— 

9 For purposes of this section, the term ‘total methane 

10 emissions charge’ means, with respect to any foreign 

11 country, the total amount of charges with respect to 

12 facilities located in such country which would be im13 posed under section 136 of the Clean Air Act (42 

14 U.S.C. 7436) if— 

15 ‘‘(A) such facilities were located in the 

16 United States, and 

17 ‘‘(B) subsection (c) of such section were 

18 applied without regard to ‘that reports more 

19 than 25,000 metric tons of carbon dioxide’ and 

20 all that follows. 

21 Except as otherwise provided by the Secretary in 

22 paragraph (4), the total methane emissions charge 

23 with respect to any foreign country shall be deter24 mined separately with respect to each methane ad25 justment substance. 


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1 ‘‘(3) NATURAL GAS MEASURED BY ENERGY

2 CONTENT.—In the case of natural gas, subpara3 graphs (A) and (B) of paragraph (1) shall each be 

4 applied by substituting ‘energy content’ for ‘volume’. 

5 ‘‘(4) METHANE ADJUSTMENT SUBSTANCES

6 PRODUCED OR EXTRACTED IN MORE THAN 1 COUN7 TRY.—The Secretary shall provide rules for deter8 mining the tax imposed under paragraph (1) with 

9 respect to a substance which was produced or ex10 tracted in more than 1 country which determines 

11 such tax on the basis of the proportion of the pro12 duction or extraction that occurred in such country. 

13 ‘‘(c) METHANE ADJUSTMENT SUBSTANCE.— 

14 ‘‘(1) IN GENERAL.—The term ‘methane adjust15 ment substance’ means petroleum and natural gas. 

16 ‘‘(2) RECOMMENDATION OF ADDITIONAL SUB17 STANCES.— 

18 ‘‘(A) IN GENERAL.—Not later than 2 years 

19 after the date of the enactment of this Act, and 

20 each 2 years thereafter, the Secretary shall sub21 mit a written report to Congress regarding 

22 whether additional substances that are reliant 

23 on oil and natural gas as a feedstock in indus24 trial processes, or otherwise have notable em25 bodied methane emissions, should be added to 


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1 the list of methane adjustment substances sub2 ject to this section. 

3 ‘‘(B) CONSULTATION.—In assessing sub4 stances to recommend for inclusion under this 

5 paragraph, the Secretary shall consult with the 

6 United States International Trade Commission 

7 and International Trade Administration on 

8 whether domestic producers, including specific 

9 domestic facilities, have lower embodied meth10 ane emissions than producers in other coun11 tries. 

12 ‘‘(C) ANALYSIS.—Each report under this 

13 paragraph shall be accompanied by an analysis 

14 prepared by the Secretary, after consultation 

15 with the United States International Trade 

16 Commission, of— 

17 ‘‘(i) the effect of the proposed expan18 sion of the methane border adjustment 

19 mechanism to include additional sub20 stances, and 

21 ‘‘(ii) the economic, employment, and 

22 environmental costs in the United States if 

23 the expansion does not include such addi24 tional substances. 

25 ‘‘(d) ESTIMATES.— 


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1 ‘‘(1) IN GENERAL.—The total methane emis2 sions charge, and the amount described in sub3 section (b)(1)(B), with respect to any foreign coun4 try for any calendar year shall be determined by the 

5 Secretary on the basis of publicly available informa6 tion. 

7 ‘‘(2) ESTABLISHMENT OF INTERNATIONAL

8 BODY TO COLLECT AND REPORT INFORMATION.— 

9 The Secretary, in consultation with the governments 

10 of countries that are major importers and exporters 

11 of methane adjustment substances, shall facilitate 

12 the establishment of an international body respon13 sible for providing for international consultations for 

14 the establishment of interoperable standards, estab15 lishing a multi-stage certification process to track 

16 emissions throughout supply chains, and collecting 

17 and reporting data related to methane emissions. 

18 Standards developed under the preceding sentence 

19 shall be updated not less frequently than every 2 

20 years. 

21 ‘‘(e) ALTERNATIVE TAX BASED ON SUPPLY CHAIN

22 EMISSIONS.— 

23 ‘‘(1) IN GENERAL.—In the case of any methane 

24 adjustment substance which meets the requirements 

25 of paragraph (2), the Secretary shall establish an alVerDate Sep 11 2014 23:21 Aug 14, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8962.IH H8962

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1 ternative method (in lieu of subsection (b)) for de2 termining the amount of tax imposed under sub3 section (a) which takes into account only such sub4 stance’s pro rata share of the charges which would 

5 be imposed under section 136 of the Clean Air Act 

6 (42 U.S.C. 7436) (determined with the adjustments 

7 described in subparagraphs (A) and (B) of sub8 section (b)(2)) with respect to facilities in the supply 

9 chain of such methane adjustment substance. 

10 ‘‘(2) REQUIREMENTS.—The requirements of 

11 this paragraph are met if— 

12 ‘‘(A) the importer of the methane adjust13 ment substance provides the Secretary such in14 formation as the Secretary may require to de15 termine all of the facilities in the supply chain 

16 of such substance, the total production of such 

17 facilities, and the relevant methane emissions 

18 therefrom, and 

19 ‘‘(B) each country in which such facilities 

20 are located is a country with which the Cus21 toms-Trade Partnership Against Terrorism (C– 

22 TPAT) has signed mutual recognition arrange23 ments with the customs administration of such 

24 country.’’. 


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1 (b) INTERNATIONAL COOPERATION ON METHANE

2 BORDER ADJUSTMENT MECHANISMS.—The Secretary of 

3 the Treasury (or the Secretary’s delegate) shall encourage 

4 the 10 countries with the highest oil and gas imports that 

5 do not yet have methane border adjustment mechanisms 

6 to— 

7 (1) implement equally stringent border adjust8 ment mechanisms, and 

9 (2) participate in the creation of the inter10 national body referred to in section 4691(d)(2) of 

11 the Internal Revenue Code of 1986, as added by this 

12 section. 

13 (c) CLERICAL AMENDMENT.—The table of sub14 chapters for chapter 38 of the Internal Revenue Code of 

15 1986 is amended by adding at the end the following new 

16 item: 

‘‘SUBCHAPTER E—METHANE BORDER ADJUSTMENT MECHANISM’’. 

17 (d) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to sales and uses after December 

19 31, 2024. 

Æ 


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