Polluters Pay Climate Fund Act of 2025

Key Points

• This bill creates a new $1 trillion tax on the largest fossil fuel companies. It targets businesses responsible for more than 1 billion metric tons of carbon dioxide emissions from extracting or refining fossil fuels between 2000 and 2023. Each company's share of the tax is based on their proportion of total covered emissions.
• All tax revenue goes into a new Polluters Pay Climate Fund to pay for climate disaster recovery, resilient infrastructure, energy grid improvements, climate-smart farming, transportation adaptation, ecosystem conservation, public health efforts, and drinking water and stormwater systems.
• At least $15 billion each year would go to FEMA for climate disaster response and resilience, including at least $3 billion for the Building Resilient Infrastructure and Communities program. Another $6 billion minimum would fund grants and technical assistance under the Clean Air Act.
• Forty percent of the fund must be spent on environmental justice communities, defined as communities of color, low-income communities, and Tribal and Indigenous communities that face higher health or environmental risks compared to other communities.
• The bill preserves the right of individuals, states, and local governments to sue fossil fuel companies under existing law. Payments into the fund cannot be used as evidence or to reduce damages in climate-related lawsuits.
• Companies can choose to pay the tax in 9 annual installments, starting with 20% in the first year and 10% each year after. The first payment would be due by September 30, 2026.