Recovered Methane Rule
Update: The Greenhouse Gas Crediting and Tracking System is open! Gas distribution utilities and recovered methane project owners and operators may now register in the system, apply for credits, and trade or retire credits for clean heat compliance purposes. Access the Recovered Methane Branch of this system through the Greenhouse Gas Crediting and Tracking System web page.
Overview
In November 2022, the Air Quality Control Commission adopted the recovered methane rule Regulation 22, Part C, to address climate change and meet the requirements of Senate Bill 21-264: Adopt Programs Reduce Greenhouse Gas Emissions Utilities. The rule took effect on Jan. 14, 2023. The rule was updated in July 2024.
Learn more about these updates to Regulation 22, Part C, Recovered Methane.
Recovered methane refers to methane from specific sources that would have otherwise escaped into the atmosphere and contributed to climate change if it had not been recovered and put to use. Eligible types of recovered methane are defined in the bill and the commission's recovered methane rule.
The commission's recovered methane rule includes protocols to monitor and measure greenhouse gas (GHG) emissions reduced or avoided from six eligible types of recovered methane projects in Colorado. The rule also includes a credit trading program to track the generation and use of these emissions reduced and avoided in the form of recovered methane credits. Public and municipal gas distribution utilities may use these credits towards their Clean Heat obligations as approved in their Clean Heat Plans.
Clean heat requirements
Senate Bill 21-264, also known as the Clean Heat Bill, requires public and municipal gas distribution utilities in Colorado to reduce greenhouse gas emissions per approved Clean Heat Plans. Each gas utility’s plan may include recovered methane credits as a strategy to achieve a portion of their required GHG reductions, up to the amount shown in the table below.
Clean heat obligations and recovered methane allowances
| Year reductions required | GHG emissions reduction requirement | Maximum amount of recovered methane allowed |
| 2025 | 4% compared to 2015 emissions | 1% of GHG emissions reduction requirement |
| 2030 | 22% compared to 2015 emissions | 5% of GHG emissions reduction requirement |
In 2025, the Colorado Public Utilities Commission began a rulemaking to establish a GHG emissions reduction target for 2035. The rule proposes to continue allowing recovered methane to meet these targets. Search for the Proceeding Number 25R-0309G on the Department of Regulatory Agencies web page to learn more about the 2025 rulemaking. By 2032, the Colorado Public Utilities Commission intends to establish additional emissions reduction targets for 2040 through 2050.
Public gas distribution utilities submit their Clean Heat Plans to the Colorado Public Utilities Commission for approval. Municipal gas distribution utilities submit their Clean Heat Plans to the CDPHE Air Pollution Control Division for review.
Colorado’s gas utilities with clean heat obligations
| Public gas distribution utility with clean heat obligation | Approving authority | Maximum approved amount of recovered methane | Proceeding filings |
| Public Service Company of Colorado (Xcel Energy) | Public Utilities Commission | Up to $10 million between 2024 and 2027. | Proceeding No. 23A-0392EG. |
| Atmos Energy Corporation | Public Utilities Commission | No recovered methane credits for 2024 to 2028. | Search for the Proceeding Number 23A-0632G. |
| Black Hills Colorado Gas | Public Utilities Commission | Under review. | Proceeding No. 23A-0633G. |
Find additional information about the Clean Heat Plans for public gas distribution utilities on the Clean Heat Plans web page.
| Municipal gas distribution utility with Clean Heat obligation | Reviewing authority | Maximum allowed amount of recovered methane |
| Colorado Springs Utility | Air Pollution Control Division |
Recovered methane requirements
To qualify as recovered methane, the following requirements must be met:
- The recovered methane project must be located in Colorado.
- The recovered methane must be either:
- Delivered through a dedicated pipeline or a common carrier pipeline that physically flows within Colorado, or
- Flow toward an end user in Colorado. The definition of dedicated pipeline in the recovered methane rule allows for the delivery of recovered methane to a pipeline interconnection or directly to an end user, including by vehicle transportation. The recovered methane must, however, replace geological gas that would have been supplied by a gas distribution utility.
- The recovered methane must meet a recovered methane protocol approved by the Air Quality Control Commission.
Recovered methane protocols
The Air Quality Control Commission’s recovered methane rule includes protocols for six types of recovered methane projects eligible to generate credits.
- Note that projects that exclusively accept or rely on livestock manure must use the CARB Compliance Offset Protocol Livestock Projects protocol.
Air Quality Control Commission Regulation 22, Part C, Section I.C.4.b.
- This is a division-developed protocol that relies on calculation methodologies and requirements described in Subpart NN of 40 Code of Federal Regulations Part 98.
Air Quality Control Commission Regulation 22, Part C, Section I.C.6.
- This is a division-developed protocol that requires quantification of leaks that would otherwise not have been repaired.
Recovered methane credit trading
Credits issued under the recovered methane rule can be tracked and traded through Colorado’s Greenhouse Gas Crediting and Tracking System (GHG CATS). For an overview of credit trading in Colorado, visit the Greenhouse gas credit trading in Colorado web page.
Credit trading information for project owners and gas utilities
Visit the Greenhouse Gas Crediting and Tracking System web page to find information about how to register and apply for and use credits.
Credit trading information for the public
The following search criteria is available:
- To find the unique identification number of a registered entity, select “CDPHERM Environmental ID Form Query” in the dropdown.
- To view additional information on registered entities, select “CDPHECATS AIR GHG Credit Trading Entity Search” in the dropdown.
- Type the company name into the appropriate search field to see information on a specific company. Type an asterisk into the company name search field to see all entries.
To see all the environmental identification numbers available for Colorado entities, click the link to Colorado’s Environmental ID dashboard.
Contact us
Questions? Email climatechange@state.co.us with "Recovered Methane" in the subject line.
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