Waste Emissions Charge for Petroleum and Natural Gas Systems

The Waste Emissions Charge for Petroleum and Natural Gas Systems (WEC) was created under the Inflation Reduction Act as part of the Methane Emissions Reduction Program. The Inflation Reduction Act called for the fee to be first assessed based on emissions in calendar year 2024, but the One Big Beautiful Bill Act (OBBA) of 2025 postponed implementation such that the charge will be first assessed based on emissions in 2034. 
The WEC applies to applicable facilities that report more than 25,000 metric tonnes of CO2 equivalent per year to the Greenhouse Gas Reporting Program (GHGRP) Petroleum and Natural Gas Systems source category (subpart W). These facilities must pay for emissions that exceed the statutorily-specified waste emission thresholds based on subpart W methodologies. Before the IRA’s amendment through the OBBA, the charge started at $900 USD per metric ton for 2024 emissions and increased to $1200 USD for 2025 and $1500 USD for 2026 and each year thereafter. Under the OBBA, facilities will be required to pay $1500 per metric ton for emissions starting in 2034 and beyond. 
Waste emissions thresholds are calculated using the following industry segment-specific methane intensity factors:

• 0.20% for onshore and offshore production;
• 0.05% for gathering and boosting, processing, LNG storage, LNG imports and exports;
• 0.11% for transmission compression, underground storage and transmission pipelines.

A facility's WEC applicable emissions are positive when the methane emissions reported under GHGRP subpart W are greater than the waste emissions threshold. The WEC applicable emissions of facilities under common ownership or control of a single owner or operator may be summed to calculate net WEC emissions.
The WEC is in part dependent on state actions in response to federal New Source Performance Standards for methane issued by the EPA under the Clean Air Act. The EPA issued a final rule in May 2024 to revise GHGRP subpart W to allow facilities to submit empirical data to ensure the accuracy of their reported emissions, thus changing the methodology for WEC calculations. In addition, the IRA specifies that the WEC will be charged only until all states have adopted their own methane regulation for existing facilities that are at least as stringent as the EPA's then-proposed Rule for Oil and Natural Gas Operations, pursuant to Section 111(d) of the Clean Air Act. If the Administrator of the EPA approves all state plans and determines that compliance with these plans will result in equivalent or greater emissions reductions as would be achieved under the proposed EPA rules, an exemption to the WEC will be available to all facilities.
Additional exemptions to the WEC include:

• Emissions from wells that are permanently shut-in and plugged in accordance with all applicable closure requirements;
• Emissions in the onshore and offshore production segments that result from unreasonable delay in environmental permitting of gathering or transmission infrastructure necessary for offtake of increased volume as a result of methane emissions mitigation implementation.

The EPA issued a rule to implement the WEC in November 2024, which was later voided as part of a February 2025 disapproval resolution by the U.S. Congress pursuant to the Congressional Review Act.

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