“A bill to amend the Internal Revenue Code of 1986 to create a carbon border adjustment based on carbon intensity, and for other purposes.”
No CRS summary available for this bill.
This section establishes a carbon intensity charge by adding new subchapter E to chapter 38 of the Internal Revenue Code (secs. 4691-4695). Requires any covered entity to report annually to the Secretary of the Treasury, EPA Administrator, and Secretary of Energy, beginning June 30, 2026 and for each subsequent year, with respect to each eligible facility operated by the entity: (1) information required under EPA's Greenhouse Gas Reporting Program for the prior calendar year; (2) total electricity used at the facility, including grid or dedicated source details, power purchase agreements, and associated emissions (if not reported under (1)); (3) total relevant quantity of each covered primary good produced; and (4) other information necessary for administration. Directs the Secretary to calculate carbon intensity for an eligible facility as covered emissions divided by total relevant quantity of covered primary goods produced in the prior calendar year. Similarly defines covered national industry carbon intensity as aggregate covered emissions across all eligible facilities in the industry divided by aggregate production of covered primary goods in that industry. Requires initial assignment of covered primary goods to covered national industries using the most recent Census Bureau NAICS-HTS concordance table; authorizes the Secretary (in coordination with relevant parties) to adjust inclusions/exclusions to ensure fair comparisons, maintain emissions scope, and avoid overlaps; deems excluded facilities as outside any covered national industry. Allows a covered entity to petition the Secretary (in coordination with EPA and Energy) to remove one or more covered primary goods from a covered national industry that produces multiple such goods, establish a new industry, determine its carbon intensity, and classify it (e.g., by HTS subheading, production process, material characteristics, or combination); requires approval if production processes differ substantially, goods have distinct non-interchangeable properties, and their carbon intensity is at least 25% greater than other goods in the industry.