Bipartisan Bill Asks DOE to Study Industrial Emissions
Just after the administration asked the International Trade Commission to examine the emissions intensity of the steel and aluminum sectors, a bipartisan bill was introduced in the Senate to tell the Energy Department to conduct a comprehensive study of the emissions from the production of aluminum, cement, iron and steel, plastic, and products made from all those materials, fertilizer, glass, lithium-ion batteries, paper and pulp, solar panels and cells, wind turbines, crude oil, refined oil products, natural gas, hydrogen, refined critical minerals and uranium.
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The bill, introduced June 7 by Sens. Chris Coons, D-Del., and Kevin Cramer, R-N.D., also has three other Republican co-sponsors, three other Democratic sponsors, and the support of an independent who caucuses with Democrats. The sponsors include senators on both sides of the aisle who have been supportive of either a carbon tax, a carbon border adjustment tax, or a combination of both.
They're calling it Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency, or the Prove It Act, and it would have the DOE not only assess the carbon cost of producing these goods and raw materials in the U.S., but also those produced by G7 countries, free trade agreement partners, foreign countries of concern, and countries that hold a substantial global market share for a covered product.
“This legislation will help give us an apples-to-apples comparison of manufacturing practices among industrialized nations,” said co-sponsor Sen. Lindsey Graham, R-S.C. “It will also provide important data to show the true costs of China dumping dirty products into our economy in an effort to undercut American manufacturers."
Coons was quoted in the news release saying: “It will level the playing field and ensure our workers and producers are not unjustly penalized for their high environmental standards. Demonstrating our comparative advantage in emissions intensity, working with our allies and partners on data sharing, and building on that with future legislation will be a win for the climate, a win for American workers and manufacturers, and a win for global cooperation."
The Energy Department would be aided by Commerce, the EPA, the Office of the U.S. Trade Representative, DHS and State as it works to analyze the emissions, identify gaps in data at home or abroad, and "facilitate collaboration among entities with expertise in data collection and analysis, support international coordination on emissions intensity data, and establish a process for receiving data from private industry on a voluntary basis," the release said.
In the same news release, both Sens. Sheldon Whitehouse, D-R.I., and Bill Cassidy, R-La., said the data obtained from DOE will help Congress write a carbon border adjustment. Whitehouse noted that the EU has already passed one.
The news release said: "Merging climate and trade policy would reduce global emissions and support American workers by leveling the playing field for domestic manufacturers who have already made expensive investments to reduce emissions in their manufacturing processes."
In a recent hallway interview at the Capitol, Whitehouse said that any high quality data analysis -- whether at the ITC or otherwise -- "could be very helpful data in the design and implementation of a proper carbon border tariff."
He did express concern that the Biden administration has not delegated one person to respond to the EU carbon border adjustment mechanism.
"If the so-called steel and aluminum arrangement of the trade representative is to be proposed as our attempt to water down the EU CBAM, then I will oppose it with all the vigor and power that I have at my disposal," he said.
Even if the U.S. does not pass its own carbon border adjustment tariffs in the near term, Whitehouse expects the EU's CBAM to change importing patterns there in a way that will benefit U.S. exports. Currently, the EU imports very little steel, aluminum or cement from the U.S., but Whitehouse says he expects exports in some or all of those sectors to "increase, because we do better from a price perspective against Chinese steel and aluminum," or Chinese or Turkish cement.