Legislators Propose U.S. Carbon Border Adjustment Tax
12/07/2023 - Two U.S. lawmakers are reintroducing a bill that would assess a carbon border adjustment tax on energy-intensive imports, while incentivizing decarbonization of domestic manufacturing.
Called the Clean Competition Act, the bill is being sponsored by U.S. Sen. Sheldon Whitehouse (D-RI) and Congresswoman Suzan K. DelBene (D-WA).
“American manufacturers doing the right thing on climate are at a disadvantage compared to high-polluting foreign competitors,” said Whitehouse in a statement. “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 is a solution endorsed by industry and experts across the political spectrum.”
According to Washington, D.C.-based think tank Niskanen Center, the bill would not only levy an import tax on imported primary goods, but proposes a narrow-based domestic U.S. carbon tax at US$55 per metric ton of CO2 equivalent.
Kevin Dempsey, president and chief executive officer of the American Iron and Steel Institute, said a carbon tariff would “help level the playing field for American steel producers and ensure that domestic industry investments in cleaner production processes are not undercut by high-carbon-emitting steel made overseas.”
However, he opposed its proposed tax on domestic carbon emissions.
“This provision penalizes domestic producers who are making great strides towards decarbonization and would deprive domestic steel producers of the very capital needed to continue investing billions of dollars in decarbonization and innovation in the United States.”
“American manufacturers doing the right thing on climate are at a disadvantage compared to high-polluting foreign competitors,” said Whitehouse in a statement. “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 is a solution endorsed by industry and experts across the political spectrum.”
According to Washington, D.C.-based think tank Niskanen Center, the bill would not only levy an import tax on imported primary goods, but proposes a narrow-based domestic U.S. carbon tax at US$55 per metric ton of CO2 equivalent.
Kevin Dempsey, president and chief executive officer of the American Iron and Steel Institute, said a carbon tariff would “help level the playing field for American steel producers and ensure that domestic industry investments in cleaner production processes are not undercut by high-carbon-emitting steel made overseas.”
However, he opposed its proposed tax on domestic carbon emissions.
“This provision penalizes domestic producers who are making great strides towards decarbonization and would deprive domestic steel producers of the very capital needed to continue investing billions of dollars in decarbonization and innovation in the United States.”
