Cheniere Energy Gets $370 Million IRS Windfall for LNG Use

Cheniere Energy, the largest producer and exporter of US liquefied natural gas, has come under fire for receiving a $370 million payout from the Internal Revenue Service (IRS) in the first quarter of 2026. The company claimed alternative fuel tax credits for using LNG to power its tankers from 2018 to 2024, a move that shipping experts, tax specialists, and a US senator say was undeserved.

According to Cheniere's annual financial report, the company utilized LNG as a transport fuel in its shipping vessel operations, serving as a substitute for diesel and heavy fuel oils, which have higher emission factors. However, shipping experts argue that LNG is not an "alternative" fuel for LNG tankers, as these vessels are specifically designed to run on LNG that "boils off" or evaporates from their holds.

"It's like saying a car manufacturer is using gasoline as an alternative fuel," said a shipping expert, who wished to remain anonymous. "It's just not a credible claim."

The tax credits in question are part of the US government's effort to encourage the use of alternative fuels and reduce greenhouse gas emissions. However, critics argue that Cheniere's claim is a clear example of the company taking advantage of a loophole in the system.

"This is a classic case of a company gaming the system to get a big payout," said US Senator [Name], who has been critical of the tax credits. "It's not what the program was intended for, and it's not fair to taxpayers."

Cheniere Energy has defended its claim, stating that it has complied with all applicable laws and regulations. However, the company's assertion that LNG is an alternative fuel has raised eyebrows among industry experts.

"LNG is not an alternative fuel for LNG tankers," said a tax specialist. "It's the primary fuel source. This is a clear case of a company trying to take advantage of a tax credit that they don't deserve."

The IRS has not commented on the matter, but the agency has faced criticism in the past for its handling of alternative fuel tax credits. In 2020, the Government Accountability Office (GAO) reported that the IRS had paid out billions of dollars in tax credits to companies that did not meet the requirements of the program.

The controversy surrounding Cheniere Energy's tax credits has sparked calls for greater transparency and oversight of the alternative fuel tax credit program. As the US government continues to incentivize companies to reduce their carbon footprint, it is essential that the system is fair and effective.

In the meantime, Cheniere Energy will likely face continued scrutiny over its claim. The company's use of LNG as a transport fuel may be a step in the right direction for reducing emissions, but its assertion that it is an alternative fuel is a clear stretch. As one shipping expert noted, "It's just not a credible claim, and it's not what the program was intended for."