Clean Competition Act

Bill Number

H.R. 6787

Origin Chamber

House

Congress

119th Congress, Session 1

Status

Introduced

Latest Action

2025-12-17: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-03-18T03:08:22Z

AI-Generated Summary

Purpose

The Clean Competition Act aims to reduce global greenhouse gas emissions by imposing a carbon intensity charge on domestic production and imports of certain energy-intensive goods, while promoting cleaner technologies and international cooperation. It establishes a border adjustment mechanism to level the playing field for U.S. producers facing foreign competition from higher-emission goods, encourages decarbonization through incentives, and funds related programs via revenue from the charges.

Key Provisions

• Carbon Intensity Calculation (Section 4691):
• Requires U.S. facilities producing covered primary goods (e.g., steel, cement, chemicals) to report emissions, electricity use, and production data annually starting June 30, 2026.
• Carbon intensity is calculated as emissions per unit of production for facilities and national industries.
• For imports, uses defaults based on the exporting country's economy-wide emissions, industry data if available, or manufacturer petitions; excludes goods from least developed countries unless they dominate global exports.
• Allows petitions to refine industry groupings or use specific data for accuracy.

• Imposition of Carbon Intensity Charge (Section 4692):
• Applies to imports of covered primary goods starting 2026 and finished goods (products containing significant amounts of these primaries) starting 2028.
• Charges domestic producers and importers if their carbon intensity exceeds a declining baseline (starting at 100% of 2025 levels, phasing to 0% by 2048).
• Charge amount: (excess intensity) × (quantity) × (cost of pollution, starting at $60 per metric ton CO2-equivalent, adjusted for inflation plus 6% annually).
• Waives charges for countries with equivalent carbon pricing; credits direct air capture of emissions up to a limit based on low-intensity U.S. benchmarks.
• Payments due annually by September 30 of the following year.

• Rebates and Exports (Section 4693):
• Refunds charges on exported U.S. goods, treated like overpayments.
• No rebate if the importing country credits the charge against its own tariffs or fees.
• Prevents "resource shuffling" by aggregating emissions across related facilities.

• Carbon Clubs (Section 4694):
• Authorizes the President to negotiate agreements with countries committing to compatible carbon measurement, labor rights, and decarbonization policies.
• Benefits include waiving charges for compliant countries and prioritizing assistance; requires full industry coverage within 10 years.
• Prioritizes global emissions cuts, U.S. access to low-carbon materials, and competitiveness.

• Definitions (Section 4695):
• Covers 20 specific industries (e.g., iron/steel, cement, petroleum refining) under NAICS codes.
• Defines terms like "covered primary good" (energy-intensive products), "finished good" (downstream items with high primary content), and "CO2-e" (carbon dioxide equivalent, measuring global warming potential).

• Investments in Industrial Competitiveness (Section 2(c)):
• Establishes Department of Energy programs: grants/loans for advanced tech to cut emissions by 20%+ at facilities; contracts for difference (subsidies bridging low-carbon production costs to market prices) via competitive auctions.
• Prioritizes high-emission goods, job creation, and distressed communities; requires labor standards and cost-sharing.
• Funding: Up to $75 billion in FY2027, tied to charge revenues (25% after initial $100 billion collected).

• International Assistance (Section 2(d)):
• Allocates State Department funds ($25 billion in FY2027, then 25% of charge revenues) for climate aid, prioritizing carbon club negotiations, low/middle-income countries, emissions reductions, and U.S. interests.

Significant Changes to Existing Law

• Amends the Internal Revenue Code (Chapter 38) by adding Subchapter E, introducing a new "carbon intensity charge" as an excise tax on emissions-intensive production and imports—unlike existing carbon taxes, it's based on intensity (emissions per unit) rather than total output.
• Overrides restrictions on Greenhouse Gas Reporting Program implementation for data collection.
• Integrates with existing clean air and energy laws (e.g., Clean Air Act definitions, 45Q carbon capture credits) but adds border adjustments, which are novel in U.S. tax law.
• Creates new executive authority for "carbon clubs" and ties revenues to mandatory spending, bypassing annual appropriations after initial thresholds.

Potential Impacts

• Government Agencies: Increases workload for Treasury (charge administration), EPA (emissions data), Energy (investments/programs), State (aid/negotiations), and USTR (trade enforcement); generates revenues (potentially hundreds of billions) for decarbonization funding.
• Citizens: May raise costs for imported/ domestic goods in covered sectors (e.g., higher steel/cement prices affecting construction), but rebates on exports and subsidies could boost clean jobs (prioritizing distressed areas); improves air quality via emissions cuts.
• International Relations: Could strain ties with high-emission exporters (e.g., China) via charges but foster alliances through carbon clubs and aid; promotes global standards on labor/environment, potentially reducing offshoring; excludes least developed countries to support development.

Main Stakeholders

• Domestic Producers: Covered entities (e.g., steel mills, refineries) face charges but gain from rebates, subsidies, and competitiveness boosts.
• Importers/Consumers: Pay charges on high-emission imports, potentially increasing prices for goods like cars/appliances; benefits from cleaner supply chains.
• Exporters: U.S. firms get refunds, enhancing global market edge for low-carbon goods.
• Foreign Governments/Producers: Face charges or incentives to join clubs/adopt standards; aid targets developing nations.
• Workers/Communities: Gains from job creation and pollution reduction in industrial areas; requires prevailing wages/community agreements.
• Environmental Groups: Benefit from emissions targets and funding for capture/tech.

Notable Legal, Constitutional, or Political Implications

• Legal: Charge acts as a tax with WTO-compliant border adjustment (avoids origin discrimination); petitions and data standards ensure due process, but challenges possible on commerce clause (interstate/international trade) or takings (if charges seen as property burdens). Relies on executive coordination, risking implementation disputes.
• Constitutional: Involves taxing imports (Article I authority) and foreign affairs (Presidential powers for clubs), but aid allocations could face spending clause scrutiny if not sufficiently tied to general welfare.
• Political: Bipartisan potential in climate competitiveness, but divides on trade (protectionism vs. free trade) and revenue use (industry subsidies vs. broader relief); phases in gradually to build support, with revenue caps preventing indefinite funding.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. DelBene, Suzan K. [D-WA-1]

Cosponsors (6)

Rep. Beyer, Donald S. [D-VA-8], Rep. Castor, Kathy [D-FL-14], Rep. Bera, Ami [D-CA-6], Rep. Chu, Judy [D-CA-28], Rep. Panetta, Jimmy [D-CA-19], Rep. Doggett, Lloyd [D-TX-37]

Recent Actions

• 2025-12-17: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-12-17: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-12-17: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-12-17: Introduced in House
• 2025-12-17: Introduced in House

Bill Versions

• Clean Competition Act — issued 2025-12-17 — PDF (74 pages)