A first that didn’t happen

Cap-and-trade for greenhouse gases has been proposed in the United States for over thirty years. The Waxman-Markey bill came closest in 2009-2010, passing the House and dying in the Senate. After that defeat, federal climate policy turned almost entirely toward regulation, tax credits, and direct investment — with no federal price on greenhouse gas emissions.

The 2022 Inflation Reduction Act looked like it had finally changed that. In a narrow but consequential form, the IRA created a charge on methane emissions from oil and gas operations. It would have been the first time the federal government directly imposed a charge, fee, or tax on a greenhouse gas.

It never took effect. In 2025, Congress dismantled the charge in two steps — before any operator paid a dollar. This brief explains what the charge was, how it was unwound, and where US methane policy stands now.

What the charge was

The IRA added Section 136 to the Clean Air Act, directing the EPA to impose a “waste emissions charge” (WEC) on methane from large oil and gas facilities — those already reporting at least 25,000 metric tons of CO2-equivalent emissions per year under EPA’s Greenhouse Gas Reporting Program.

The charge was graduated and applied only to emissions above industry-specific leak-rate thresholds:

• 2024 emissions: $900 per metric ton of methane above the threshold.
• 2025 emissions: $1,200 per metric ton.
• 2026 and beyond: $1,500 per metric ton.

The “above thresholds” framing mattered. The charge was not meant to tax all methane. Operators that drove emissions below the specified leak rates would owe nothing; operators that did not would owe substantial sums. The EPA finalized the rule implementing the charge in November 2024, with the first filings expected in late 2025 for 2024 emissions.

Why methane, and why this was a milestone

Methane is a potent greenhouse gas — roughly 80 times as warming as CO2 over a 20-year timeframe. The oil and gas sector is the largest US industrial source of methane emissions, primarily through leaks at production sites and across the gas distribution system. Methane abatement is widely regarded as one of the highest-impact, lowest-cost climate interventions available, because many leaks can be found and fixed with off-the-shelf technology.

The significance of the charge was less about its revenue — projected at only a few hundred million dollars annually — than about precedent. It would have established both the legal architecture and the political precedent for the federal government putting a price on a greenhouse gas. That is the milestone that did not survive.

How it was unwound

Congress dismantled the charge in two distinct steps in 2025:

• The Congressional Review Act disapproval (March 2025). Congress passed a joint resolution disapproving the EPA’s November 2024 rule implementing the charge. President Trump signed it on March 14, 2025, as P.L. 119-2. Under the CRA, the rule no longer has the force of law, and the EPA is barred from issuing a substantially similar rule without new authorization from Congress.
• The One Big Beautiful Bill Act delay (July 2025). The CRA action struck the rule but left the underlying statute — Section 136 — on the books. The reconciliation law signed July 4, 2025 (P.L. 119-21) closed that gap by amending Section 136 itself, pushing the charge’s effective date from 2024 all the way out to 2034.

The combined effect: no implementing rule, and a statutory start date a decade away. No operator ever filed, and no charge was ever collected. As a practical matter, the first US federal price on a greenhouse gas has been neutralized — though, as a technical matter, Section 136 has not been formally repealed and a future Congress or administration could revisit it.

The separate regulatory track

The waste emissions charge should not be confused with the EPA’s methane regulations for oil and gas, a distinct legal matter. Under the Clean Air Act, the EPA sets performance standards for methane and other pollutants from oil and gas operations — the 2024 rules known as Subparts OOOOb and OOOOc, covering leak detection, flaring, and venting at new and existing sources.

Those regulations were not touched by the CRA action, but they have faced their own rollback. The EPA announced in 2025 that it was reconsidering the oil and gas methane standards, extended compliance deadlines through interim rulemaking, and in April 2026 finalized revisions loosening requirements for flares and vent gas. So both tracks — the charge and the standards — have moved in the same direction, by different means.

What to watch

• The status of Section 136. The statute survives with a 2034 effective date. Whether a future Congress repeals it outright, restores an earlier date, or leaves it dormant is the central question.
• State-level methane pricing. With the federal charge sidelined, states and other jurisdictions become the venues where methane pricing, if it advances at all, will be tested.
• The OOOOb/OOOOc revisions. The April 2026 rule loosening flaring and venting standards is likely to draw litigation; its durability is unsettled.
• The next federal pricing proposal. Any future federal carbon-price effort — fee, cap-and-trade, or border adjustment — would now have to build the legal and political case from a weaker starting point than it did in 2022.

Bottom line

For a brief window, the United States had enacted its first federal price on a greenhouse gas. It was narrow, modest in revenue, and aimed at one of the cheapest emissions to abate. It was also dismantled within three years of passage — disapproved by the Congressional Review Act in March 2025 and delayed to 2034 by reconciliation in July 2025 — before it ever took effect. The precedent that briefly existed is the thing that was lost, and rebuilding it is now a harder fight than enacting it was.