US Congresswoman Suzan K. DelBene has reintroduced the Clean Competition Act, arguing that the US has lost a significant share of global manufacturing over the past five decades. According to DelBene, this shift has resulted in plant closures, job losses and growing vulnerabilities in supply chains, while production has increasingly moved from relatively clean economies such as the US to jurisdictions with much higher carbon intensity.
She noted that this trend has weakened global climate outcomes while penalizing manufacturers operating under stricter environmental standards. On average, the US economy generates more than 50 percent fewer emissions per unit of output than its trading partners. By comparison, China’s economy is more than three times as carbon intensive as that of the US, while India’s and Russia’s are roughly four and five times more carbon intensive, respectively.
Call for stable trade frameworks
DelBene argued that tariffs imposed under the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA), although framed as corrective measures, have added instability to trade relations and worsened structural imbalances. She stressed the need for Congress to establish clearer and more predictable trade frameworks that reward cleaner production and support global emissions reductions.
Carbon border adjustment and sector coverage
The Clean Competition Act proposes a carbon border adjustment mechanism targeting the highest-emitting producers. It would apply to a wide range of energy-intensive industries, including oil, gas, coal, refining, petrochemicals, fertilizers, hydrogen, adipic acid, cement, iron and steel, aluminum, glass, pulp and paper, and ethanol.
Under the proposal, the US Treasury would establish an initial carbon-intensity benchmark for each covered sector in 2026. These benchmarks would be calculated using facility-level emissions data already reported to the Environmental Protection Agency, together with emissions associated with electricity consumption.
Benchmarks would tighten progressively over time. Emissions exceeding the benchmark, whether from imports or domestic production, would be subject to a carbon-intensity fee starting at $60/mt and increasing annually by six percent plus inflation. Given the comparatively lower carbon footprint of US production, the mechanism is intended to tilt competitive conditions in favor of domestic manufacturers.
Revenue use and international cooperation
75 percent of revenues collected would be directed toward decarbonisation efforts within US industry, including grants, loans, rebates and contracts for difference administered by the department of energy. The remaining 25 percent would fund economic assistance programs managed by the state department, aimed at helping developing economies reduce industrial emissions and supporting negotiations linked to cooperative “carbon club” arrangements.
The legislation would authorize the president to negotiate agreements with partner countries willing to collaborate on industrial decarbonisation, apply comparable carbon border measures and uphold labor and environmental protections. Developing economies participating in such arrangements would receive priority access to US financial support, while members of these carbon clubs could qualify for exemptions from border measures if they implement domestic policies delivering effects comparable to those established under the act.