Senate, House Democrats’ Bill Would Protect Clean American Manufacturers

WASHINGTON, DC — Today U.S. Sen. Sheldon Whitehouse (D-RI) and Rep. Suzan DelBene (D-WA) introduced the Clean Competition Act of 2023. The bill would protect clean American manufacturers by placing a fee on carbon emissions that exceed the U.S. average carbon intensity to produce things like fossil fuels, aluminum, steel, and cement. The fee ensures that carbon-intensive imports do not undercut innovative American producers that have invested in lowering their climate impact.

The bill would reinvest revenue from the polluter fee into domestic industrial decarbonization projects in covered sectors so that companies with high-emitting facilities have the opportunity to upgrade and meet standards set by their peers. It would also dedicate additional revenue to support clean industry and the transition away from carbon-intensive manufacturing proceeds in places that currently lack resources (also known as “Least Developed Countries” in the bill), which will prevent bad actors from introducing dirty production to these countries.

Sen. Whitehouse and Rep. DelBene’s bill follows the introduction of Sen. Bill Cassidy’s (R-LA) Foreign Pollution Fee Act in early November. That bill would also put a fee on imports across the energy and industrial sectors based on their pollution intensity relative to the U.S. average. However, unlike the Clean Competition Act, the Foreign Pollution Fee Act does not specify that revenue would be reinvested in private sector innovation to help domestic manufacturing expand its global competitiveness.

In response, Harry Manin, Deputy Legislative Director for Industrial Policy and Trade at the Sierra Club, released the following statement:

“Sen. Whitehouse and Rep. DelBene’s bill ensures that the market rewards American manufacturers for expanding their carbon advantage. Innovative domestic producers of critical goods like steel and cement will fight climate change by becoming more competitive in domestic and global markets.

Thanks to a provision to reinvest revenue in domestic decarbonization projects, the bill incentivizes U.S. producers to become as clean and competitive as possible. By prioritizing investments toward greatest emission reductions, polluting facilities affected by the fee stand to gain most, as do communities hit hardest by pollution.

With China’s Belt and Road Initiative floundering, America can supplant its financing of carbon-intensive manufacturing and fossil fuel projects around the world. By offering an alternative path for Least Developed Countries, climate-forward trade bills like the Clean Competition Act are important opportunities to assert American global leadership. Moving forward, we encourage legislators to prevent polluters from abusing exemptions and ensure the U.S. can scrutinize foreign emissions data.”

COMPARING TRADE POLICIES

A new report by the Sierra Club examines recent trade policies introduced in the U.S. and the EU that will impact the import and manufacturing of carbon-intensive goods. It assesses the ways that the U.S. can leverage trade policies to fight climate change, manufacture more goods domestically, ensure protections to vulnerable communities, and limit the influence of bad foreign actors. 

The paper compares four trade policies that utilize climate-friendly trade tools called Carbon Border Adjustments, which are either currently proposed in the U.S. or already in effect in the EU: The EU CBAM, the Clean Competition Act, the FAIR Transition and Competition Act, and the Foreign Pollution Fee Act.

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