Whitehouse, DelBene Reintroduce Carbon Border Adjustment to Boost Domestic Manufacturers, Tackle Climate Change

Clean Competition Act bolsters American companies’ competitiveness and cuts emissions at home and abroad

Washington, D.C. - Senator Whitehouse (D-RI), Ranking Member of the Senate Committee on Environment and Public Works, and Congresswoman Suzan K. DelBene (D-WA-01) today reintroduced the Clean Competition Act (CCA), legislation to make American companies more competitive in the global marketplace and cut planet-warming greenhouse gas emissions with a carbon border adjustment.  The legislation is cosponsored by Senators Richard Blumenthal (D-CT), Martin Heinrich (D-NM), Brian Schatz (D-HI), Chris Van Hollen (D-MD), and Peter Welch (D-VT).  It is co-led in the House by Representatives Ami Bera, M.D. (D-CA-06), Don Beyer (D-VA-08), and Kathy Castor (D-FL-14), and cosponsored by Representatives Jimmy Panetta (D-CA-19) and Judy Chu (D-CA-28).  

“American manufacturers are already among the cleanest in the world, yet they face unfair competition from countries that do nothing to curb their pollution.  The free-to-pollute business model is economically disastrous and environmentally dangerous,” said Ranking Member Whitehouse.  “The carbon boarder adjustment is the world’s last lifeboat to climate safety, and other nations are moving fast: the EU’s carbon border adjustment mechanism begins in January, and the UK and Australia look poised to join them.  If we don’t act now, American manufacturers will have to pay fees abroad without any protection at home.  The Clean Competition Act buys us entry into this emerging coalition of allies and ensures that foreign competitors who pollute more pay more.” 

“For too long, American industries producing goods in a less carbon-intensive way have been undercut by foreign competitors with dirtier production processes. Washington saw this firsthand with the closure of the Intalco aluminum smelter due to Chinese overproduction, resulting in the loss of over 700 good-paying union jobs. We can address the climate crisis while defending American industries with the Clean Competition Act,” said DelBene. “A fee on high-carbon producers would incentivize industries around the world to prioritize decarbonization and create a level playing field for American workers in these sectors.”

A carbon border adjustment is an environmental trade policy that levies charges on products from carbon-intensive manufacturers, holding them accountable for their greenhouse gas pollution.  It ensures that firms and countries taking steps to decarbonize are rewarded with greater market share.

On average, U.S. manufacturers are over 50 percent less carbon intensive than manufacturers in the rest of the world.  Chinese manufacturers are more than three times as carbon intensive as American ones, and India’s are more than four times as carbon intensive.

The Clean Competition Act is endorsed by C2ES, Carbon180, Center for American Progress Action Fund, Ceres, Citizens’ Climate Lobby, Environmental Defense Fund, Foreign Policy for America, National Wildlife Federation, and Sierra Club.

“Climate change is a global threat requiring almost every country in the world to cut its greenhouse gas emissions to meet our mid-century goals. The Clean Competition Act incentivizes decarbonization efforts in the US and abroad while strengthening the competitive edge of US manufacturers and catalyzing the growth of emerging technologies like direct air capture. Domestic industries, their workers, and the communities in which they operate stand to benefit from a fairer market that incorporates the cost of climate pollution,” said Erin Burns, Carbon180 Executive Director.

“The CCA is a win-win for U.S. manufacturing and the climate. Industrial facilities that produce materials such as steel and aluminum produce roughly fifteen percent of global climate emissions. The CCA would incentivize and support manufacturers both in the U.S. and abroad to reduce their industrial emissions. This helps ensure that U.S. manufacturing facilities remain competitive in a global marketplace that is increasingly prioritizing low-carbon goods,” said Mike Williams, Senior Fellow at the Center for American Progress Action Fund.“Moreover, the CCA encourages collaboration between countries working to decarbonize heavy industry. This is critical, as climate change is a global problem that requires a coordinated global response.”

“The Clean Competition Act would establish a clear, ambitious, and predictable trade framework that strengthens U.S. competitiveness and reinforces America’s leadership in clean industry and environmental stewardship. By encouraging businesses and governments around the world to cut pollution from their production of goods and materials, this bill will advance U.S. climate, economic, and national security interests,” said Zach Friedman, senior director of federal policy, at Ceres. “This market-oriented approach will drive additional investment in clean technologies, spur innovation and high-quality jobs across the country, and reduce harmful pollution. We urge lawmakers on both sides of the aisle to work together on a final policy that gives America’s businesses and workers a fair, level playing field to compete—and win—in the race to build an abundant, clean energy future for all.”

“The United States can lead or be left behind as international purchasers increasingly demand cleaner products,” said Joanna Slaney, Environmental Defense Fund's VP for Political and Government Affairs. “This proposal will help put U.S. manufacturers in position to compete globally while creating jobs and reducing harmful pollution.”

“I applaud Sen. Whitehouse and Rep. DelBene’s efforts to encourage investment in American companies, level the playing field for American manufacturers and workers, and strengthen incentives for other major economies to follow our lead. This approach offers a forward-looking pathway to cleaner growth and more resilient supply chains,” said Sahar Hafeez, a board member at Foreign Policy for America.  

“The Clean Competition Act rewards innovative American manufacturing by encouraging clean practices that promote health and efficiency. Remarkably, the bill’s thoughtful design conditions the expansion of the United States’ competitive edge in global markets on the decarbonization of industry. Meanwhile, the Trump administration only pays lip service to American manufacturing. It is succeeding in raising prices on consumers yet giving a pass to pollution-cheats. The Clean Competition Act takes the opposite approach of Trump’s handouts to polluters by rewarding companies who do the right thing and those who want to invest in innovation. It also levels the global playing field by raising standards around the world, instead of exacerbating a race to the bottom that increases pollution and decreases wages,” said Harry Manin, Campaign Lead for the Industrial Sector at the Sierra Club.  “We are grateful for Sen. Whitehouse and Rep. DelBene’s leadership and urge all champions of American manufacturing, clean air, and a livable climate to support the bill.”

“The Clean Competition Act of 2025 provides a clear framework for aligning U.S. industrial competitiveness with measurable emissions performance,” said Liza Reed, Director of Climate and Energy at the Niskanen Center. “I commend the sponsors for advancing legislation that strengthens transparency, reduces leakage, and rewards efficient American producers.”

The Clean Competition Act would create a U.S. carbon border adjustment linked to a new domestic industrial performance standard—initially set at the average carbon intensity of the respective U.S. industry.  Importing foreign producers or domestic manufacturers that exceeded the standard (i.e., worse than average) would be required to pay a charge for any emissions in excess of the standard.  Direct air capture of greenhouse gas emissions would be credited up to the bottom 25th percentile of an industry’s carbon intensity.

The bill would cover the imports and domestic manufacturing of energy-intensive industries, including fossil fuels, refined petroleum products, petrochemicals, fertilizer, hydrogen, adipic acid, cement, iron and steel, aluminum, glass, pulp and paper, and ethanol.  In 2028, coverage would begin expanding to more complex downstream goods.

From 2027 through 2030, the applicable U.S. carbon intensity baselines would be reduced by 2.5 percentage points each year from the initial average.  Starting in 2031, the baselines would decrease by five percentage points per year.  The levy would begin at $60 per ton and increase at six percent above inflation per year.  Covered imports from the least developed countries would be exempt from any charges, unless they hold a significant share of the market in question.  Refunds would be issued for covered and finished goods that are exported.

All revenues raised by the carbon intensity charge would be reinvested in industrial decarbonization: 75 percent domestically by the Department of Energy and 25 percent as foreign assistance by the Department of State.  Domestically, these funds would support grants, rebates, and loan programs, as well as contracts for difference.  One hundred billion dollars would be pre-appropriated for these programs to catalyze emissions reductions, and additional amounts would be made available once that was recouped.  

The President would be able to negotiate carbon clubs to drive down global greenhouse gas emissions and expand markets for low-carbon industrial goods.  In exchange, countries would be able to receive a reduction in foreign carbon intensity charges and first preference for the bill’s foreign assistance funding.

Text of the bill is available HERE.  A section-by-section is available HERE. A one-pager is available HERE.