In Washington – ACMA Insider – May 18, 2023

Bipartisan Senators Look to Add Carbon Tax to Technology Bill Democrats and Republicans in the Senate are looking to combine …

Bipartisan Senators Look to Add Carbon Tax to Technology Bill

Democrats and Republicans in the Senate are looking to combine efforts to establish a carbon import tax on heavy carbon emitters and link the language to a follow up bill on U.S. competitiveness, according to a report from E&E News. This would match legislation passed by the EU last year. 

Democrats Chris Coons (D-DE) and Sheldon Whitehouse (D-RI) and Republicans Bill Cassidy (R-LA) and Kevin Cramer (R-ND) will work to compromise on one approach to a carbon border adjustment measure (“CBAM”). While the senators take different approaches on the specifics, a CBAM would incentivize reduction in carbon dioxide and other climate-linked emissions by taxing carbon-intensive products, with a similar domestic fee for U.S. producers. This approach is designed to address “carbon leakage,” or the export of carbon-intensive manufacturing from more developed economies.

The idea for a unified effort on a CBAM emerged after Senate Majority Leader Chuck Schumer (D-NY) proposed a CHIPS and Science Act 2.0. which will build on legislation passed in 2022 focused on the industrial base for semiconductors but also included language focused on NASA and aerospace, including language specific to composites.

Targeting trade in carbon-intensive products is an emerging idea. The European Union in December 2022 finalized an import tariff on steel, cement, fertilizer, iron, aluminum and electricity based on carbon emissions created during manufacturing or production. The move came as the EU looks to ramp up fees and regulatory pressure domestically to decarbonize. The corresponding tariff is meant to prevent offshoring of emissions. The EU tariff will begin a three-year phase-in starting in October 2023.

For further information, contact Dan Neumann, ACMA Vice President, Government Relations.

EPA Announces Draft Plastics Strategy as Global Plastics Treaty Negotiation Round Nears

The Biden Administration continued its focus on reducing the demand for single-use plastics in its Draft Strategy to Prevent Plastic Pollution released on April 23.  The report focuses on three core areas aimed at increasing circularity and avoiding plastics from entering waterways. This draft strategy comes as the State Department prepares to lead a delegation to Paris for the next round of negotiations on the Global Plastics Treaty   

The strategy underscores the ongoing focus of the administration on the negative effects of single-use plastics and demonstrates the continued need to differentiate composites from other polymers. The strategy is part of the overall Biden Administration goal to eliminate the release of plastic waste from land-based sources into the environment by 2040.   

The report includes a reference to environmental justice, a core part of the Biden Administration’s environmental efforts. The report states “EPA endeavors to provide an innovative, equitable approach to reduce and recover plastic and other waste, as well as prevent plastic pollution from harming human health and the environment, particularly for communities already overburdened by pollution.” 

The draft lists the following objectives:  

Objective A: Reduce pollution during plastic production 

Objective B: Improve post-use materials management 

Objective C: Prevent trash and micro/nano plastics from entering waterways and remove escaped trash from the environment.   

The full report can be found here 

While the EPA continues to work domestically, the U.S. Department of State is preparing to attend the next round of Global Plastics Treaty negotiations at the end of May.  In a briefing attended by ACMA staff, the State Department said the Biden Administration’s goal is to conclude the negotiations on the treaty by the end of 2024, a timetable influenced by the political calendar.  The U.S. strategy for the treaty is to push for overarching goals for reduction in plastics use but leave specific benchmarks to each signatory to develop.  This strategy is in part due to the near zero chance that any binding commitments could gain any Republican support in Congress. At the same briefing, representatives for the EU took a different approach, stating that specific goals are necessary in the body of the agreement. It is unclear at this time if these two opposing views can be reconciled, making the completion of agreement by the end of 2024, or at all, in doubt.   

For further information on the global plastics treaty, please contact Dan Neumann or John Schweitzer.