The Methane Emissions Reduction Program (MERP) is a U.S. federal program created by Section 60113 of the Inflation Reduction Act (IRA), signed into law by President Joe Biden on August 16, 2022. It amended the Clean Air Act by adding a new Section 136, which directs the Environmental Protection Agency (EPA) to address methane emissions from the oil and natural gas sector through a combination of financial incentives and a first-of-its-kind federal charge on excess methane emissions.
MERP has two main components:
- Financial and technical assistance: roughly $1.55 billion in grants, rebates, loans, and contracts to help operators monitor, measure, and reduce methane emissions, plug wells, and mitigate health and environmental impacts in communities near oil and gas infrastructure.
- Waste Emissions Charge (WEC): a fee imposed on methane emissions above statutorily defined intensity thresholds from facilities already required to report under the EPA's Greenhouse Gas Reporting Program (Subpart W). The charge started at $900 per metric ton of methane for emissions reported in 2024, rising to $1,200 in 2025 and $1,500 in 2026 and thereafter.
The WEC applies to facilities emitting more than 25,000 metric tons of CO₂-equivalent per year across covered segments, including onshore and offshore production, gathering and boosting, processing, transmission, and storage. Exemptions exist for emissions caused by unreasonable permitting delays, for plugged wells, and for facilities in compliance with EPA's methane performance standards once those are in effect nationwide.
EPA finalized the WEC implementing rule in November 2024. In March 2025, however, Congress passed and President Donald Trump signed a Congressional Review Act resolution disapproving the WEC rule, effectively halting collection of the fee, though the underlying statutory authority in the IRA remains on the books unless repealed by Congress. The grant and assistance components have continued to be administered by EPA and the Department of Energy.
Example
In 2024, the EPA began implementing MERP by awarding grants to oil and gas states and finalizing a Waste Emissions Charge starting at $900 per metric ton of methane.
Frequently asked questions
Oil and gas facilities that report under EPA's Subpart W greenhouse gas reporting rule and whose methane emissions exceed statutory intensity thresholds defined for production, processing, and transmission segments.
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