Clean Competition Act

Key Points

• The bill creates a carbon intensity charge starting in 2026 on roughly 20 energy-intensive industries — including steel, aluminum, cement, petroleum refining, and fertilizer manufacturing — that applies to both domestic production and imports. Companies pay when their carbon intensity exceeds a declining percentage of the U.S. industry baseline.
• The carbon price starts at $60 per metric ton of CO2-equivalent in 2026 and rises each year by inflation plus 6 percentage points, making pollution increasingly expensive over time and incentivizing cleaner production methods.
• The 'applicable percentage' threshold declines from 100% in 2026 to 0% by 2048, meaning that over time every unit of carbon pollution from covered industries faces charges — not just pollution above the industry average. This tightening ratchet is the core mechanism driving decarbonization.
• The bill appropriates $75 billion to the Department of Energy for grants, rebates, and loans to help domestic factories invest in advanced industrial technology, plus $25 billion in State Department climate and clean energy assistance to facilitate carbon club agreements with other nations.
• U.S. exporters of charged goods receive rebates to stay competitive abroad, and the President can negotiate 'carbon club' agreements with other countries that meet emissions-reporting, labor, and environmental standards — potentially waiving import charges for club members.
• Least developed countries are generally exempt from carbon charges on their exports to the U.S., unless the country accounts for at least 3% of global exports of that product — a provision primarily aimed at shielding the world's poorest nations from trade barriers.