Reps. Castor, DelBene Introduce Bill to Boost Domestic Manufacturers, Tackle Climate Change
Clean Competition Act would lower emissions across high-polluting sectors at home and abroad
Washington, D.C., December 6, 2023
WASHINGTON, DC – Representatives Kathy Castor (FL-14), Suzan DelBene (WA-01), Don Beyer (VA-08), and Ami Bera (CA-06), and Senators Sheldon Whitehouse (RI), Brian Schatz (HI) and Martin Heinrich (NM) introduced legislation to make American companies more competitive in the global marketplace and address major sources of planet-warming greenhouse gas emissions by creating a carbon border adjustment.
American manufacturers are less carbon-intensive than most foreign competitors. The U.S. economy is almost 50 percent less carbon-intensive than the global average. The Chinese economy is over three times as carbon-intensive as the U.S., and India is nearly four times as carbon-intensive.
The Clean Competition Act would impose a carbon border adjustment on energy-intensive imports while incentivizing decarbonization of domestic manufacturing. Starting in 2025, the adjustment would apply to energy-intensive industries, including fossil fuels, refined petroleum products, petrochemicals, fertilizer, hydrogen, adipic acid, cement, iron and steel, aluminum, glass, pulp and paper, and ethanol. In 2027, it would be expanded to include imported finished goods that meet certain weight or value thresholds, such as cars.
The fee would be based on the weight of a particular good, beginning at $55 per ton, and increasing over time. 75 percent of revenues raised would fund grants to help domestic industries invest in the new technologies necessary to reduce their carbon footprints. The remaining 25 percent would be used by the State Department to help developing countries decarbonize.
“As we work to reduce climate pollution and boost American jobs, we need a renewed focus on leveling the playing field for American goods and products that compete against products from countries that pollute and use unfair advantages. The Clean Competition Act is an important complement to the new wave of American manufacturing jobs boosted by the historic Inflation Reduction Act. American industries are leveraging a wide range of technologies to drive down industrial air pollution and achieve greater sustainability,” said Castor. “Our Clean Competition Act will help reward these innovations, strengthen America’s industrial base, and protect us from unfair competition in the global marketplace while ensuring that China and other nations are doing their part to reduce pollution and environmental impacts.”
“For too long, American industries producing goods in a less carbon-intensive way have been undercut by foreign competitors with dirtier production processes. Washington saw this firsthand with the closure of the Intalco aluminum smelter due to Chinese overproduction, which resulted in the loss of over 700 good-paying union jobs. To address the climate crisis while defending American industries, the Clean Competition Act would level the playing field by imposing a fee on imports from high-carbon producers,” said DelBene. “A carbon fee would incentivize industries from around the world to prioritize decarbonization and create a level playing field for American workers in these sectors.”
“American manufacturers doing the right thing on climate are often at a disadvantage compared to high-polluting foreign competitors,” said Whitehouse. “Our Clean Competition Act would give domestic companies a step up in the global marketplace while lowering carbon emissions at home and abroad, and ultimately steering the planet toward climate safety. There is bipartisan momentum for a carbon border adjustment in the Senate – this a solution endorsed by industry and experts across the political spectrum.”
“The Clean Competition Act is a smart use of trade policy that would advance both our climate and economic agenda by incentivizing domestic energy-intensive industries to become more efficient and pushing for manufacturers overseas to do the same,” said Beyer. “I greatly appreciate the work of Rep. DelBene and Sen. Whitehouse on this important bill and look forward to advancing it through the legislative process.”
“American manufacturers often find themselves at a disadvantage when it comes to prioritizing environmentally responsible practices in comparison to competitors in other countries with less environmentally friendly approaches,” said Bera. “The Clean Competition Act will help level the playing field for American companies with our trading partners while addressing the urgent threat of climate change. By introducing a carbon border adjustment that targets imports from the world’s dirtiest polluters, we are incentivizing the transition of heavy industry towards the adoption of cleaner and more energy efficient practices and helping re-invest in American clean manufacturing here at home.”
“Manufacturing accounts for nearly one-quarter of U.S. climate pollution and is a rapidly growing sector globally. Reducing climate pollution is vital for a stable climate and healthy, thriving communities. The Clean Competition Act can create a race to the top among global competitors as part of a larger effort to move toward a low-carbon economy, while opening a dialogue about additional efforts needed to address local pollution impacts on frontline communities,” said Elizabeth Gore, Senior Vice President for Political Affairs, Environmental Defense Fund.The full text of the legislation can be found here.