South Dakota Farm Bureau has received a number of inquiries asking about a methane tax in the Build Back Better Act and the American Farm Bureau Federation has prepared a response to those concerns.
Last week, Rep. Markwayne Mullin (R-OK) published this opinion piece criticizing the spending bill and asserting it includes a methane emissions fee on agricultural emissions. He goes on to state that this fee will cost “$6,500 per dairy cow, $2,600 per head of cattle, and $500 per swine each year.” This piece has since been amplified online, and as such SDFB has been hearing from our members asking if these assertions are true.
The House’s current draft of the Build Back Better Act, does not include any sort of fee or tax on methane emissions from agriculture. It does, however, require the imposition of a fee on methane from petroleum and natural gas systems (beginning on page 366 at the link above). There is a proposed methane fee (tax) in the House Build Back Better Act (reconciliation package) imposed on oil and gas producers. The current bill does not impose a methane tax on agriculture.
While the Build Back Better Act does not impose a methane tax on agriculture, increased taxes on energy producers could lead to higher prices for supplies farmers rely on to grow food. Farm Bureau continues to monitor the debate over the reconciliation package in the House, and its impact on American agriculture.
U.S. agriculture is among the leaders in conservation and methane reductions. We are always looking for opportunities to build on voluntary strategies already in place.
An AFBF analysis determined the potential impact if a methane tax were to be imposed on agriculture. Below are the results based on the formula set forth in legislation for the oil and gas sector. Again, current legislation does not impose a methane tax on agriculture.
$1,500 per ton using 2019 EPA Emissions Inventories for which measurements are reported in CO2 equivalents:
- The overall impact on agriculture would be about $414.45 billion.
- Dairy industry methane tax would total $112.8 billion or $6,504 per dairy cow.
- Beef industry methane tax would total $198.75 billion or $2,607 per head.
- Swine industry methane tax would total $39 billion or $503 per head.
$1,500 per ton using 2019 EPA Emissions Inventories for which measurements are reported in methane kilotons:
- The overall impact on agriculture would be about $15.384 billion.
- Dairy industry methane tax would total $4.515 billion or $260 per dairy cow.
- Beef industry methane tax would total $7.947 billion or $104 per head.
- Swine industry methane tax would total $1.55 billion or $20 per head.