United States Senator Ted Cruz has put forward a new legislative proposal aimed at providing tax incentives for cryptocurrency miners who utilize flared natural gas to fuel their mining activities.
In an announcement on April 1, Cruz introduced the Facilitating Lower Atmospheric Released Emissions Act, expressing his vision for Texas to become the leading hub for Bitcoin mining.
The FLARE Act aims to amend the U.S. tax code, allowing companies to make a permanent deduction for the total cost of systems that capture and convert natural gas that would typically be flared or vented.
Known as flaring and venting mitigation systems, these setups would be eligible for full expensing starting in 2026.
To meet the qualifications, this equipment must process natural gas and transform it into valuable products, such as electricity, liquid fuels, or computational power utilized in digital asset mining.
The legislation outlines a variety of eligible applications, which include compressing or liquefying gas for transportation, generating petrochemicals or fertilizers, and supplying energy to oilfield equipment or the electrical grid.
In addition to the tax incentives, the bill includes a provision that prohibits foreign entities of concern—such as those linked to China, Russia, Iran, or North Korea—from reaping the benefits of these incentives. This provision is designed to ensure that the tax breaks remain available exclusively to operators aligned with U.S. interests and to promote domestic energy independence.
Cruz and proponents of the bill argue that converting stranded gas into usable energy would not only help reduce emissions but also encourage energy innovation and enhance the resilience of the electrical grid—especially during peak demand times or extreme weather events.
“This legislation leverages Texas’s extensive energy capabilities, solidifies our status as a leader in the Bitcoin sector, and is environmentally beneficial. I urge my colleagues to promptly support and advance this proposal,” Cruz stated.
The bill has garnered backing from industry stakeholders who view it as a beneficial development for both the energy sector and innovation.
Bitcoin mining enterprise MARA Holdings publicly supported the legislation in a social media post, emphasizing that it could lead to emission reductions and “unlock stranded energy” throughout Texas and beyond.
Previously, MARA joined forces with NGON to set up a 25-megawatt micro data center operation tapping into wellheads in Texas and North Dakota. This data center is designed to harness excess natural gas to generate electricity for powering data centers, thereby offering a highly efficient solution for methane mitigation to energy producers.
Under the proposed legislation, infrastructure like the one established by MARA would qualify as a flaring and venting mitigation system, making it eligible for complete permanent expensing. This means that MARA and similar companies could deduct the entire installation cost of such systems from their taxable income starting in 2026.
Before introducing the FLARE Act, Cruz mentioned at the 2021 Texas Blockchain Summit the potential for Bitcoin mining to convert excess energy from oil and gas operations into usable energy instead of simply flaring it away.
“Incorporating that energy into Bitcoin mining is incredibly beneficial for the environment since you’re utilizing the natural gas productively rather than allowing it to be burned off,” he articulated at the time.
