Carbon tax on imports and domestic goods funds industrial subsidies with vague rules.
H.R. 6787 — Clean Competition Act · Filed by Suzan DelBene (D-WA) · 6 cosponsors · Introduced Dec 17, 2025 · Referred to committee
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What it does
This bill creates a carbon border adjustment mechanism—a charge on imported goods and domestic production based on their carbon intensity. Importers and domestic producers of energy-intensive goods (steel, cement, chemicals, etc.) pay a fee if their carbon intensity exceeds a declining baseline; the fee starts at $60 per metric ton CO2-equivalent in 2026 and phases down to zero by 2048. Exporters receive rebates. The bill also funds domestic industrial decarbonization grants and 'contracts for difference' (price supports) to help US manufacturers compete on carbon intensity.
Why we flagged it
The operative mechanism is a carbon intensity charge on imports and domestic production, paired with government grants and price-support contracts for covered industries. This is fundamentally a carbon tax (or tariff-like mechanism) combined with targeted industrial policy subsidies, not a pure climate measure.
- Section 2 (Investing in Industrial Competitiveness) establishes grants, rebates, low-interest loans, and contracts-for-difference for covered industries. This is substantively unrelated to the carbon charge mechanism in Section 1 and functions as a direct subsidy rider.
What the text implies
- The carbon charge applies to domestic producers and importers, but rebates are available only to exporters—creating an asymmetry that may incentivize offshoring of production to countries with lower carbon costs, even if those countries are not in a 'carbon club' agreement.
- The 'contracts for difference' (Section 2(3)) are open-ended price supports: the government pays the difference between a manufacturer's strike price and market price. This is a subsidy with no explicit cap, and the cost will depend on market prices and production volumes determined by private firms.
The full analysis lists 5 implications of this text.
Who stands to gain
Steel manufacturers (NAICS 331110); Cement producers (NAICS 327310); Petroleum refineries (NAICS 324110)