With the EU's Carbon Border Adjustment Mechanism (CBAM) set to begin its pilot phase in October 2023, and the US's Clean Competition Act (CCA) scheduled to take effect in 2024, the US CCA differs in that it has no pilot period. Faced with the looming carbon tariffs in various countries, the only way to seize the initiative in this carbon tariff trade is to continuously monitor policy trends, understand the rules of the game, and implement carbon inventory and reduction measures. Below, we will explain the US CCA bill. On June 7, 2022, the US Senate introduced the Clean Competition Act, which aims to reduce climate pollution and strengthen the competitiveness of US manufacturing by implementing carbon border adjustments for energy-intensive imported products. The bill has now completed its second reading. If passed, carbon tariffs would be imposed on US manufacturers and importers starting in 2024. These tariffs would target 25 industries, including oil and natural gas extraction, underground coal mining, pulp mills, paper mills, newsprint mills, paperboard mills, refineries, ethanol, organic chemicals, fertilizers, glass, cement, lime, steel, aluminum, hydrogen, and adipic acid. The difference between the EU CBAM and the carbon tariff calculation baseline and the objects of levy is that the US CCA Act charges carbon fees on importers and domestic manufacturers, but domestic manufacturers can obtain tax rebates when exporting to other countries. The calculation method is that the US Treasury Department calculates the average carbon content of each category of US products based on the reported data, which serves as the baseline for levying carbon taxes. If the carbon intensity of a manufacturer exceeds the carbon intensity baseline applicable to the industry in the United States, it must pay carbon taxes on the excess.
