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The report analyzes the potential credit impacts of the American Power Act (APA) and EPA regulations on the U.S. chemicals industry. Under the APA, most subsectors would be eligible for free emissions allowances, mitigating direct compliance costs, though some would face higher production costs due to increased natural gas prices. The study highlights that company-level credit risk varies based on emissions intensity relative to peers, fuel mix, and the ability to pass costs to customers. Compared to EPA regulation, a cap-and-trade system offers more cash flow flexibility and potential revenue from selling excess allowances, but requires more complex management strategies.