American Free Enterprise Chamber of Commerce and Michigan Oil and Gas Association filed a lawsuit in the federal district court for the Western District of Michigan challenging the constitutionality of provision of the Inflation Reduction Act that imposed the waste emissions charge, which the plaintiffs referred to as a “Methane Tax.” The plaintiffs contended that the provision did not provide an “intelligible principle” for applying a “regulatory compliance exemption” from the charge. The plaintiffs further asserted that the provision constituted an unlawful delegation of legislative power. In addition, the plaintiffs claimed that the waste emissions charge violated the Constitution’s Export Clause to the extent it applied to liquefied natural gas export facilities because it was “in effect” a tax on exports.

Challenge to the Inflation Reduction Act's waste emissions charge.

American Free Enterprise Chamber of Commerce v. Nishida

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Lawsuit Filed Challenging IRA’s Waste Emissions Charge

Filed

United States of America

Michigan

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Area of the economy in which actors engage in identical or related activities.

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Actions or measures to adapt freshwater systems to climate change.

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The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

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Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

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Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

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Lawsuit Filed Challenging IRA’s Waste Emissions Charge

Policy instrument

Risk

Impacted group

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance