Senators Challenge $370M IRS LNG Tax Credit
Get the Energy newsletter
Daily energy & climate — solar, EVs, oil, the policy fights and tech bets shaping the transition. Free.
- U.S. senators wrote to IRS acting commissioner Scott Bessent seeking clarification on whether LNG-powered tankers qualify for the Alternative Fuel Excise Tax credit, citing regulatory mismatches.
- Cheniere Energy received a $370 million tax credit for using liquefied natural gas (LNG) to power its LNG tankers, according to an Inside Climate News investigation.
- Inside Climate News reported that LNG use in shipping is industry standard, not an alternative fuel, undermining the stated purpose of the tax incentive.
- Federal shipping regulations define motorboats eligible for the Alternative Fuel Excise Tax credit as vessels no longer than 65 feet, while LNG tankers are typically around 1,000 feet long.
- The senators argued that awarding AFET credits to LNG tanker operators wastes taxpayer money and fails to reduce oil dependence or benefit the environment.
Why it matters: Cheniere’s $370 million windfall hinges on a tax credit meant for small, alternative-fuel boats—not massive LNG carriers. If the IRS backs down, it could block similar claims by other energy firms and redirect funds from fossil fuel support to actual clean energy goals.
Ask SkimNews
