The Proposed Foreign Pollution Fee Act

The Foreign Pollution Fee Act proposes ad valorem charges on imports across 15 broad categories, including steel, aluminum, and solar panels, based on their greenhouse gas (GHG) intensity relative to U.S. production. The author argues the Act is administratively complex and serves as a protectionist tool, noting that it lacks credits for carbon prices paid in exporting countries and imposes onerous requirements for foreign producers to prove lower emissions. While it offers special treatment for low-income countries through International Partnership Agreements (IPAs), the author contends the bill's primary focus is on restricting imports from China and Russia rather than environmental protection.

• The Act targets 15 broad product categories, including aluminum, iron & steel, solar cells and panels, and wind turbines, covering many specific products at the 6-digit Harmonized System level.
• Import charges would be ad valorem fees based on the GHG-intensity differential between foreign and U.S. production, organized into at least 25 tiers with rates set by the Secretary of the Treasury to achieve specific GHG reduction goals over three phases.
• The Act does not provide credits for carbon prices already paid in the exporting country, which would result in a double charge on GHG emissions for those producers.
• Pollution intensity is determined by the National Laboratory Advisory Board, which the author notes is heavily influenced by U.S. industry, as it includes two representative CEOs from each of the 15+ covered sectors.
• Foreign producers can avoid national average defaults via Facility-Specific Agreements (FSAs), but these require strict compliance with U.S. regulations, real-time monitoring, and a requirement that 50% of decarbonization technology be sourced from the U.S.
• International Partnership Agreements (IPAs) can grant exemptions or special treatment, including a 5-year total charge exemption for low-income and lower-middle-income countries.
• The author concludes the Act is designed more for geopolitical positioning and protecting U.S. industry than for climate goals, citing the inclusion of low-carbon goods like solar panels and the use of ownership-based rather than location-based pollution intensity.

APA

Cosbey, A. (2023). The Proposed Foreign Pollution Fee Act. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-12/proposed-foreign-pollution-fee-act.pdf

Chicago

Cosbey, Aaron. The Proposed Foreign Pollution Fee Act. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-12/proposed-foreign-pollution-fee-act.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |title=The Proposed Foreign Pollution Fee Act |publisher=International Institute for Sustainable Development |date=November 2023 |url=https://www.iisd.org/system/files/2023-12/proposed-foreign-pollution-fee-act.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2023proposed, author = {Cosbey, Aaron}, title = {{The Proposed Foreign Pollution Fee Act}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = nov, url = {https://www.iisd.org/system/files/2023-12/proposed-foreign-pollution-fee-act.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }