Permanent full expensing of costs related to flaring and venting mitigation systems

(a) In general Section 168(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (11) Permanent expensing of costs related to flaring and venting mitigation systems (A) In general In the case of any applicable energy property— (i) paragraph (8) shall not apply, and (ii) the applicable percentage shall be 100 percent. (B) Applicable energy property (i) In general For purposes of this paragraph, the term applicable energy property means any qualified property (as determined as if clause (iii) of paragraph (2)(A) did not apply with respect to such property) which is a flaring and venting mitigation system. (ii) Flaring and venting mitigation system For purposes of this subparagraph, the term flaring and venting mitigation system means a system which— (I) intakes natural gas, and (II) separates, collects, utilizes, or combusts methane and heavier hydrocarbons by— (aa) compressing or liquefying gas for use as fuel or transport to a processing facility, (bb) production of petrochemicals or fertilizer, (cc) conversion to liquid fuels, (dd) conversion to electricity for electricity-driven activities or supply to the electrical grid, (ee) conversion to computational power, (ff) mining for digital assets, or (gg) powering other oilfield equipment. (C) Foreign entity of concern (i) In general This paragraph shall not apply to any property placed in service by any foreign entity of concern. (ii) Definition In this paragraph, the term foreign entity of concern has the meaning given that term in section 10612(a) of the Research and Development, Competition, and Innovation Act (42 U.S.C. 19221(a)).. (b) Conforming amendment Section 168(k)(6)(A) of the Internal Revenue Code of 1986 is amended by inserting or paragraph (11) after this paragraph. (c) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2025.