House Bill 6622, officially known as the Clean Competition Act, aims to amend the Internal Revenue Code to introduce a carbon border adjustment based on carbon intensity. The bill seeks to establish a system where carbon emissions associated with the production of goods are taxed, promoting lower carbon alternatives and incentivizing industries to reduce their carbon footprint. Effective reporting by entities on their emissions and energy use is mandated to enable accurate assessments of carbon intensity for covered primary goods.
The bill outlines specific charges imposed on covered goods produced domestically and imported into the United States, beginning after December 31, 2024. The charges on domestic production will be determined based on the difference in carbon intensity compared to set industry standards. Imported goods will also face charges to equalize costs with domestic products, aiming to prevent carbon leakage and maintain competitive equity for U.S. industries.
Notably, the legislation includes a rebate system for exporters of covered primary goods, mitigating the financial burden on domestic producers who meet specified emissions standards. Additionally, a competitive grant program is established to support entities in investing in technologies that lower carbon intensity, with a preference for projects in economically distressed areas.
The discussion surrounding HB 6622 reflects a tension between environmental goals and economic impacts. Proponents believe this legislation will drive significant reductions in carbon emissions, align the U.S. with global climate initiatives, and foster innovation in green technologies. However, opponents raise concerns regarding potential implications for jobs and manufacturing costs, particularly in sectors that might face higher operational expenses due to compliance with the new carbon standards.