,,ii #aaith ,,congress #ast ,session ,s4 #cebc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ag1 #bjbe ,mr4 ,whitehouse 7for himself1 ,mr4 ,blumenthal1 ,mr4 ,heinrich1 ,mr4 ,schatz1 ,mr4 ,welch1 and ,mr4 ,van ,hollen7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to create a carbon border adjustment based on carbon intensity1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,clean ,competition ,act4 #b4 ,carbon intensity charge 7a7 ,in general ,chapter #ch of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subchapter3 ,e ,carbon intensity charge ,sec4 #dfia4 ,calculation of carbon intensity4 ,sec4 #dfib4 ,imposition of carbon intensity charge4 ,sec4 #dfic4 ,rebate4 ,sec4 #dfid4 ,carbon clubs4 ,sec4 #dfie4 ,definitions4 #dfia4 ,calculation of carbon intensity 7a7 ,domestic reporting requirements ,not later than ,june #cj1 #bjbf1 and annually thereafter1 any covered entity shall1 for each eligible facility operated by such entity1 report to the ,secretary1 the ,administrator1 and the ,secretary of ,energy with respect to the following3 7#a7 ,any information required to be reported to the ,administrator under the ,greenhouse ,gas ,reporting ,program 7as would be required to be reported notwithstanding any other provision of law prohibiting the implementation of or use of funds for such requirements7 for the preceding calendar year4 7#b7 ,the total amount of electricity used at such facility during the preceding calendar year1 including-- 7,a7 whether such electricity was provided through the electric grid or a dedicated generation source1 7,b7 the terms of any power purchase agreements with respect to such facility1 and 7,c7 with respect to any electricity which was not provided through the electric grid1 the greenhouse gas emissions associated with the production of such electricity1 provided that such emissions are not reported pursuant to paragraph 7#a74 7#c7 ,the total relevant quantity of each covered primary good produced at such facility during the preceding calendar year4 7#d7 ,any other information determined necessary by the ,secretary for purposes of the administration of subsection 7b74 7b7 ,calculation 7#a7 ,carbon intensity 7,a7 ,eligible facility ,for purposes of this subchapter1 for each calendar year1 the carbon intensity with respect to any eligible facility shall be an amount equal to the quotient of-- 7i7 the covered emissions 7as determined under paragraph 7#b77 with respect to such facility1 divided by 7ii7 the total relevant quantity of covered primary goods produced at such facility during the preceding calendar year4 7,b7 ,covered national industry 7i7 ,in general ,for purposes of this subchapter1 the carbon intensity with respect to any covered national industry shall be an amount 7as determined by the ,secretary7 equal to the quotient of-- 7,i7 an amount equal to the sum of the covered emissions 7as determined under paragraph 7#b77 with respect to all eligible facilities which produce covered primary goods which are included within such covered national industry for the calendar year1 divided by 7,,ii7 the total relevant quantity of covered primary goods within such covered national industry which are produced at all such eligible facilities during such year4 7ii7 ,covered primary goods determination ,for purposes of this subchapter-- 7,i7 a covered primary good shall initially be included within the covered national industry with which it is associated under the most recent concordance table published by the ,bureau of the ,census comparing classifications under the ,harmonized ,tariff ,system and the ,north ,american ,industry ,classification ,system1 and 7,,ii7 the ,secretary 7in coordination with the relevant parties7 may subsequently determine which types of eligible facilities or processes within facilities 7and any related covered primary goods7 are included or excluded within a covered national industry1 provided that such determination-- 7aa7 facilitates a fair comparison of carbon intensities across similar eligible facilities 7based on a comparison of the energy-intensive processes and the material outputs of such facilities71 7bb7 does not meaningfully reduce the scope of greenhouse gas emissions covered by this subchapter1 and 7cc7 ensures that each covered primary good is only included within a single covered national industry4 7iii7 ,excluded facilities ,in the case of any eligible facility which1 pursuant to clause 7ii71 is excluded from a covered national industry and is not included in any other covered national industry1 such facility shall be deemed to not be included in any covered national industry4 7,c7 ,petition for specific goods 7i7 ,in general ,in the case of any covered national industry which produces more than #a covered primary good1 a covered entity may file a petition with the ,secretary to-- 7,i7 remove #a or more covered primary goods from inclusion under any covered national industry1 7,,ii7 establish a new covered national industry for purposes of the goods described in subclause 7,i71 7,,iii7 determine the carbon intensity with respect to the covered national industry established under subclause 7,,ii71 and 7,,iv7 determine a classification for defining such covered national industry for purposes of this subchapter1 such as-- 7aa7 the applicable #f-;digit subheading 7or subheadings7 of the ,harmonized ,tariff ,schedule of the ,united ,states of the goods described in subclause 7,i71 7bb7 the relevant production process1 7cc7 a set of material characteristics1 or 7dd7 any combination of the methods for classification described in items 7aa7 through 7cc74 7ii7 ,review ,with respect to any covered primary good which is included in a petition described in clause 7i71 the ,secretary 7in coordination with the ,administrator and the ,secretary of ,energy7 shall approve such petition if-- 7,i7 the chemical1 physical1 or mechanical production processes for such good or goods are substantially different as compared to other covered primary goods produced within the same covered national industry1 7,,ii7 the properties of such good or goods are distinct such that its uses cannot be easily replaced by other covered primary goods produced within the same covered national industry1 and 7,,iii7 the carbon intensity determined with respect to such good or goods is at least #be percent greater than the carbon intensity determined for other covered primary goods produced within the same covered national industry4 7iii7 ,recalculation ,in the case of any petition described in clause 7i7 which is approved by the ,secretary pursuant to clause 7ii71 the ,secretary 7in coordination with the ,administrator7 shall redetermine the carbon intensity1 as well as the baseline carbon intensity1 with respect to the covered national industry or industries which previously included production of the covered primary good or goods which are the subject of such petition by excluding any covered emissions associated with the production of such good or goods for purposes of the determination made under subparagraph 7,b7 for such industry4 7iv7 ,goods-level data ,in the case of any petition described in clause 7i7 which is approved by the ,secretary pursuant to clause 7ii71 the ,secretary 7in coordination with the ,administrator7 shall use a methodology for determining the carbon intensity of the covered primary good or subset of primary goods 7as determined using the eligible facility information reported under subsection 7a771 and shall publish the methodology and the results of such determination1 in a manner which-- 7,i7 is compatible with existing ,federal carbon accounting rules and standards1 7,,ii7 includes the related chemical1 physical1 or mechanical production processes responsible for differences in carbon intensity and covered emissions1 and 7,,iii7 prioritizes ease of administration and compliance4 7,d7 ,determination ,any determination of carbon intensity under this paragraph shall be made by the ,secretary in coordination with the ,administrator and the ,secretary of ,energy4 7,e7 ,relevant quantity ,for purposes of this subchapter1 the relevant quantity of a covered primary good shall be determined based on-- 7i7 the weight 7expressed in metric tons7 of such good1 or 7ii7 if the ,secretary1 in coordination with the ,administrator and the ,secretary of ,energy1 determines that using an alternate physical unit of measurement 7such as volume at a specific pressure or energy content7 would better facilitate a fair comparison of carbon intensities across the covered primary goods in the covered national industry1 an alternate physical unit of measurement4 7#b7 ,covered emissions 7,a7 ,in general ,for purposes of this subsection1 for each calendar year1 the amount of covered emissions with respect to any eligible facility shall be an amount 7as determined by the ,secretary1 in coordination with the ,administrator7 equal to the sum of-- 7i7 the total greenhouse gas emissions associated with the production of covered primary goods at such facility during the preceding calendar year 7as reported pursuant to subsection 7a771 plus 7ii7 the total greenhouse gas emissions associated with any electricity used at such facility for the production of such goods during the preceding calendar year4 7,b7 ,emissions for electricity used 7i7 ,in general ,for purposes of subparagraph 7,a77ii71 the amount of greenhouse gas emissions associated with electricity provided through the electric grid shall be determined based on the average carbon intensity for the regional grid in which the eligible facility is located for the preceding calendar year4 7ii7 ,exception ,in the case of an eligible facility which is subject to a power purchase agreement 7or its foreign equivalent7 which guarantees that any electricity provided under such agreement is generated within the same hour as it is used by such facility and within the same regional transmission zone 7or its foreign equivalent7 as such facility-- 7,i7 clause 7i7 shall not apply with respect to the amount of electricity provided under such agreement1 and 7,,ii7 the amount of greenhouse gas emissions associated with such electricity shall be determined based on the average carbon intensity of the electricity provided under such agreement4 7#c7 ,imported goods 7,a7 ,in general ,in the case of any covered primary good which is imported into the ,united ,states1 the carbon intensity with respect to such good shall be determined as follows3 7i7 ,economy-wide default ,subject to clauses 7ii71 7iii71 and 7iv71 the carbon intensity with respect to the covered primary good shall be equal to the product of-- 7,i7 an amount equal to the quotient of-- 7aa7 the carbon intensity of the general economy of the country of origin of such good1 divided by 7bb7 the carbon intensity of the general economy of the ,united ,states1 multiplied by 7,,ii7 the carbon intensity of the covered national industry in the ,united ,states for such good for the preceding calendar year4 7ii7 ,industry data ,if the ,secretary 7in coordination with the relevant parties7 determines that transparent1 verifiable1 and reliable information is available with respect to any covered national industry in the country of origin of the covered primary good and that such country of origin is a transparent market economy1 the carbon intensity with respect to the covered primary good shall be equal to the relevant covered national industry carbon intensity of the country of origin of such good4 7iii7 ,manufacturer data ,if a petition under subparagraph 7,c7 has been approved1 the carbon intensity with respect to the covered primary good shall be equal to the average carbon intensity with respect to the production of such good by the manufacturer within the country of origin4 7iv7 ,estimates for significant imports ,if the ,secretary 7in coordination with the relevant parties7 determines that-- 7,i7 7aa7 greater than #aj percent of the value of imports of covered primary goods in a covered national industry come from a single country of origin1 or 7bb7 when applied to imports of covered primary goods in a covered national industry from a country of origin1 the carbon intensity determined under clause 7i7 fails to maintain the integrity and efficacy of this subchapter1 and 7,,ii7 7aa7 transparent1 verifiable1 and reliable information is not available to determine the carbon intensity of the covered national industry in such country of origin1 or 7bb7 such country of origin is not a transparent market economy1 the ,secretary 7in coordination with the relevant parties7 shall estimate the carbon intensity of the covered national industry in the country of origin using best available data 7such as the production processes used by the facilities in the country74 7,b7 ,carbon intensity of the general economy ,for purposes of this subchapter1 with respect to any country1 the carbon intensity of the general economy of such country shall be an amount equal to the quotient of-- 7i7 the greenhouse gas emissions of such country for the most recent year for which the ,secretary determines there is reliable information1 divided by 7ii7 the gross domestic product of such country for the year described in clause 7i74 7,c7 ,petition for foreign manufacturer data 7i7 ,in general ,in the case of any entity which imports a covered primary good for which the carbon intensity can be determined under subparagraph 7,a77ii7 from a country of origin where there is no evidence of inter-firm resource shuffling1 such entity may file a petition with the ,secretary to determine the charge under section #dfib1 if any1 based on the average carbon intensity with respect to the production of such good by the manufacturer within the country of origin4 7ii7 ,aggregation rule ,for purposes of this subparagraph1 the average carbon intensity with respect to the production of a covered primary good shall be determined based upon greenhouse gas emission and production data from all facilities which produce such good which are under common control of the manufacturer of such good1 including any subsidiary1 parent company1 or joint venture of such manufacturer within the country of origin4 7iii7 ,data provision ,in the case of an entity which files a petition described in clause 7i71 such entity shall provide the ,secretary with an environmental product declaration containing-- 7,i7 any information which would otherwise be required to be reported under subsection 7a7 if the facilities which produced the covered primary good to which the petition applies were subject to the reporting requirements under the ,greenhouse ,gas ,reporting ,program1 and 7,,ii7 any other information which is necessary 7as determined by the ,secretary1 in coordination with the relevant parties7 to calculate the carbon intensity of the covered primary good in accordance with any relevant methodologies for allocating the carbon intensity of the covered primary good under paragraph 7#a77;,c77iv74 7iv7 ,data standards ,the ,secretary shall only grant such a petition if the information provided pursuant to clause 7iii7 meets the quality1 verification1 and completeness requirements of the equivalent ,federal carbon accounting rules and standards that would apply if the covered primary good were produced domestically4 7,d7 ,inputs ,with respect to any covered primary good which is imported into the ,united ,states and for which other covered primary goods 7other than petroleum1 natural gas1 coal1 or any waste or scrap product7 from other covered national industries were used as inputs in the production of the imported covered primary good1 the quantity of such inputs used in the production of the imported covered primary good shall be treated as separate covered primary goods that1 without double-counting emissions1 shall be considered to be imported for purposes of this subchapter4 7,e7 ,exclusion 7i7 ,in general ,subject to clause 7ii71 in the case of any covered primary good 7including any covered primary good which is an input of a finished good7 which is imported into the ,united ,states and was produced in a relatively least developed country 7as described in section #abd of the ,foreign ,assistance ,act of #aifa 7#bb ,u4,s4,c4 #baeav771 this paragraph shall not apply4 7ii7 ,exception ,clause 7i7 shall not apply if the country described in such clause produces at least #c percent of total global exports by value of the covered primary good4 7,f7 ,inter-firm resource shuffling ,for purposes of this paragraph1 the term inter-firm resource shuffling means any buying1 selling1 trading1 exchanging1 or other transfer of control of production facilities between entities based on the carbon intensity of such facilities for the purpose of creating entities with relatively lower carbon intensity and entities with relatively higher carbon intensity4 7,g7 ,trading partners ,for countries with which the ,united ,states has agreements that facilitate trade1 commit the parties to refrain from imposing new trade barriers1 and establish high standards for labor and environmental protection and human rights1 the ,secretary 7working with the relevant parties7 shall make best efforts to work with the government of such country to improve data sharing1 accuracy1 and transparency such that imports of covered primary goods from such country have their carbon intensity determined under subparagraph 7,a77ii74 7c7 ,publication ,the ,secretary 7in coordination with the relevant parties7 shall-- 7#a7 annually publish any carbon intensity which has been determined under subsection 7b7 with respect to any eligible facility1 covered national industry1 covered primary good1 foreign manufacturer1 or country of origin 7including the physical unit of measurement which serves as the relevant quantity with respect to any covered primary good71 7#b7 publish 7and update1 as appropriate7 a list of each covered primary good1 as categorized by the covered national industry in which such good is included1 and 7#c7 publish 7and update1 as appropriate7 a list of each good that qualifies as a finished good1 as determined by the ,secretary pursuant to section #dfie7i74 #dfib4 ,imposition of carbon intensity charge 7a7 ,in general 7#a7 ,importation of goods 7,a7 ,in general 7i7 ,covered primary goods ,subject to section #dfid1 in the case of any covered primary good imported into the ,united ,states during any calendar year beginning after ,december #ca1 #bjbe1 there is hereby imposed a charge in an amount 7rounded to the nearest dollar7 equal to the product of-- 7,i7 the amount 7if any7 by which the carbon intensity determined under section #dfia7;b77#c7 with respect to such good exceeds an amount equal to the applicable percentage of the baseline carbon intensity of the covered national industry which includes such good1 multiplied by 7,,ii7 the total relevant quantity of the good imported into the ,united ,states1 multiplied by 7,,iii7 the cost of pollution 7as determined under subsection 7c774 7ii7 ,finished goods 7,i7 ,in general ,subject to section #dfid1 in the case of any finished good which is imported into the ,united ,states during any calendar year beginning after ,december #ca1 #bjbg1 there is hereby imposed a charge in an amount equal to the sum of the amounts determined under subclause 7,,ii7 with respect to each covered primary good which is an input of such finished good4 7,,ii7 ,components ,the amount determined under this subclause with respect to any covered primary good which is an input of a finished good is an amount equal to the product of-- 7aa7 the amount 7if any7 determined under clause 7i77,i7 if such clause were applied with respect to such good1 multiplied by 7bb7 the total relevant quantity of the covered primary good1 multiplied by 7cc7 the cost of pollution 7as determined under subsection 7c774 7,b7 ,charge due ,the charge imposed under this paragraph with respect to any goods imported during any calendar year shall be paid by the entity which imported such goods not later than ,september #cj of the calendar year subsequent to such year4 7,c7 ,exclusion 7i7 ,in general ,subject to clause 7ii71 in the case of any covered primary good 7including any covered primary good which is an input of a finished good7 which is imported into the ,united ,states and was produced in a relatively least developed country 7as described in section #abd of the ,foreign ,assistance ,act of #aifa 7#bb ,u4,s4,c4 #baeav771 this paragraph shall not apply4 7ii7 ,exception ,clause 7i7 shall not apply if the country described in such clause produces at least #c percent of total global exports by value of the covered primary good4 7,d7 ,foreign carbon prices ,if the ,secretary 7in coordination with the relevant parties7 determines that a foreign country has implemented policies which impose explicit and verifiable fees1 costs1 or penalties on the emission of greenhouse gases which-- 7i7 are economically similar to the charges imposed pursuant to the provisions of this subchapter1 and 7ii7 have not been rebated by such foreign country1 the charge 7or a portion of the charge which is equivalent to the fees or costs imposed by the foreign country7 which would otherwise be imposed under this section with respect to covered primary goods produced in such foreign country may be waived4 7#b7 ,domestic production of covered primary goods 7,a7 ,in general ,in the case of any eligible facility1 for each calendar year beginning after ,december #ca1 #bjbe1 there is hereby imposed a charge in an amount 7rounded to the nearest dollar7 equal to the product of-- 7i7 the amount 7if any7 by which the carbon intensity of such facility 7as determined under section #dfia7;b77#a77;,a77 exceeds an amount equal to the applicable percentage of the baseline carbon intensity for the covered national industry 7as determined under section #dfia7;b77 which includes any covered primary good produced by such facility1 multiplied by 7ii7 the total relevant quantity of any covered primary goods produced by such facility during such calendar year1 multiplied by 7iii7 the cost of pollution 7as determined under subsection 7c774 7,b7 ,charge due ,the charge imposed under this paragraph with respect to any calendar year shall be paid by the covered entity not later than ,september #cj of the calendar year subsequent to such year4 7b7 ,applicable percentage ,for purposes of paragraphs 7#a77;,a7 and 7#b77;,a7 of subsection 7a71 the applicable percentage shall be-- 7#a7 for calendar year #bjbf1 #ajj percent1 7#b7 for calendar years #bjbg through #bjcj1 the applicable percentage for the preceding calendar year1 reduced by #b4e percentage points1 7#c7 for calendar years #bjca through #bjdg1 the applicable percentage for the preceding calendar year1 reduced by #e percentage points1 and 7#d7 for any calendars years subsequent to calendar year #bjdg1 #j percent4 7c7 ,cost of pollution 7#a7 ,in general ,for purposes of paragraphs 7#a77;,a7 and 7#b77;,a7 of subsection 7a71 the cost of pollution shall be-- 7,a7 for calendar year #bjbf1 #fj1 and 7,b7 for each calendar year subsequent to the calendar year described in subparagraph 7,a71 an amount equal to the sum of-- 7i7 the cost of pollution for the preceding year1 plus 7ii7 an amount equal to-- 7,i7 the amount described in clause 7i71 multiplied by 7,,ii7 the percentage by which the ,,cpi for the preceding calendar year exceeds the ,,cpi for the second preceding calendar year1 increased by #f percentage points4 7#b7 ,,cpi ,rules similar to the rules of paragraphs 7#d7 and 7#e7 of section #a7;f7 shall apply for purposes of this subsection4 7#c7 ,rounding ,any applicable amount determined under this subsection which is not a multiple of #a shall be rounded to the nearest dollar4 7d7 ,carbon removal 7#a7 ,in general ,with respect to the amount of any charges imposed under subsection 7a7 during a calendar year1 such amount shall be reduced by an amount 7rounded to the nearest dollar7 equal to the product of-- 7,a7 the total amount 7as measured in metric tons7 of greenhouse gas emissions which are captured directly from the ambient air during such calendar year pursuant to the requirements under paragraphs 7#b7 and 7#c71 and 7,b7 the cost of pollution 7as determined under subsection 7c774 7#b7 ,removal requirements ,the requirements described under this paragraph with respect to captured greenhouse gas emissions are that such emissions are captured during the preceding calendar year and-- 7,a7 disposed of in secure geological storage 7in compliance with the regulations established under section #de,q7f77#b771 or 7,b7 utilized in a manner 7other than for enhanced oil or gas recovery and in compliance with the regulations established under section #de,q7f77#e77 whereby such emissions are not combusted or otherwise emitted into the atmosphere4 7#c7 ,direct air capture ,for purposes of this subsection1 with respect to any greenhouse gas emissions which are captured directly from the ambient air1 the operator of the facility which captured such emissions may-- 7,a7 apportion such emissions removal amongst any eligible facilities which are under common control of such operator1 or 7,b7 enter into binding and exclusive agreements 7which meet such requirements as determined necessary by the ,secretary to ensure fair and accurate emissions accounting7 with-- 7i7 any operator of an eligible facility1 for the purpose of permitting such operator to reduce the charge imposed under subsection 7a7 with respect to any eligible facilities which are under common control of such operator1 or 7ii7 any importer of covered primary goods1 for the purpose of permitting such operator to reduce the charge imposed under subsection 7a7 with respect to any of their imported covered primary goods4 7#d7 ,limitation ,for purposes of this subsection1 in the case of any covered primary good imported or produced at an eligible facility1 the amount of any reduction of the charge imposed under subsection 7a7 with respect to such covered primary good or production of such good shall not exceed the lesser of-- 7,a7 the amount of the charge imposed under such subsection1 or 7,b7 an amount equal to the product of-- 7i7 the first quartile in terms of carbon intensity with respect to facilities operating in the ,united ,states which produce covered primary goods which are included within the same covered national industry1 as determined by the ,secretary 7in coordination with the relevant parties71 multiplied by 7ii7 the relevant quantity of such covered primary good1 multiplied by 7iii7 the cost of pollution 7as determined under subsection 7c774 7#e7 ,ensuring integrity ,the ,secretary1 in coordination with the ,administrator and the ,secretary of ,energy1 shall issue such regulations as may be necessary to prevent double-counting and to ensure the additionality and permanence of captured emissions4 7e7 ,regulations and trade actions ,the ,secretary shall issue such regulations as may be necessary to carry out this subchapter and shall work closely with the relevant parties to pursue such trade actions as may be necessary to maintain the integrity and efficacy of this subchapter4 #dfic4 ,rebate 7a7 ,exportation of covered primary good ,subject to subsections 7c7 and 7d71 in the case of a person who exports any covered primary good from the ,united ,states which was produced in an eligible facility for which a charge has been imposed under section #dfib1 a refund shall be allowed to such person in the same manner as if it were an overpayment of the charge imposed by such section in an amount equal to the charge that would be imposed under subsection 7a77#a77;,a77i7 of such section with respect to such good4 7b7 ,exportation of finished good ,subject to subsection 7c71 in the case of a person who exports any finished good from the ,united ,states for which a charge has been imposed under section #dfib on such finished good or any of its components1 a refund shall be allowed to such person in the same manner as if it were an overpayment of the charge imposed by such section in an amount equal to the charge that would otherwise be imposed under such section with respect to such finished good 7as determined pursuant to subsection 7a77#a77;,a77ii7 of such section74 7c7 ,exception for certain foreign policies ,in the case of any exports from the ,united ,states for which a charge has been imposed under section #dfib1 if-- 7#a7 the covered primary good or finished good is imported by a country with policies that impose tariffs1 fees1 or penalties on the emission of greenhouse gases associated with imports1 and 7#b7 the country described in paragraph 7#a7 would credit the charge imposed under section #dfib against such tariffs1 fees1 or penalties1 any portion of a rebate otherwise allowable under this section shall not be allowed to the extent that it would reduce the amount credited by such country against such tariffs1 fees1 or penalties4 7d7 ,preventing domestic resource shuffling ,for purposes of determining the amount of any refund pursuant to subsection 7a71 the carbon intensity with respect to the eligible facility shall be determined by applying section #dfia7;b77#a77;,a7 by substituting all eligible facilities by the covered entity which produced the covered primary good described in section #dfic7;a77#a7 for such facility each place it appears in such section4 #dfid4 ,carbon clubs 7a7 ,in general ,to accelerate the pace of global decarbonization and expand markets for goods with lower carbon intensities1 the ,president may1 in coordination with the ,secretary and the relevant parties-- 7#a7 enter into negotiations with #a or more foreign countries to establish or expand a carbon club agreement under this section1 7#b7 perform any enforcement activities necessary to uphold the requirements under such agreement1 and 7#c7 remove any foreign country from a carbon club agreement if such country is determined to have failed to comply with the requirements described in subsection 7b7 or any additional requirements established under such agreement4 7b7 ,requirements ,any foreign country which has entered into a carbon club agreement under this section shall be subject to the following requirements3 7#a7 ,ensure its methodologies for the measurement1 reporting1 and verification of the carbon intensity of covered national industries match1 or are interoperable with1 those used to determine the carbon intensity of covered national industries in the ,united ,states4 7#b7 ,permit any other country which is a party to such agreement to regularly validate the measurement1 reporting1 and verification of the carbon intensity of their covered national industries4 7#c7 ,ensure1 in law and in practice1 that all workers in the territory of the country are guaranteed the following internationally recognized rights and freedoms1 including those guaranteed in the ,declaration on ,fundamental ,principles and ,rights at ,work of the ,international ,labour ,organization and its ,follow-up3 7,a7 ,freedom of association and the effective recognition of the right to collective bargaining4 7,b7 ,elimination of all forms of forced or compulsory labor4 7,c7 ,effective abolition of child labor1 a prohibition on the worst forms of child labor1 and other labor protections for children and minors4 7,d7 ,elimination of discrimination in respect of employment and occupation4 7,e7 ,acceptable conditions of work with respect to minimum wages1 hours of work1 and occupational safety and health4 7#d7 ,create or maintain1 as well as implement and verifiably enforce-- 7,a7 domestic policies 7including any investments made possible by assistance provided under section #b7;d7 of the ,clean ,competition ,act7 which reduce the carbon intensity of its covered national industries in a magnitude greater than that which would feasibly be induced as a result of-- 7i7 the charges imposed under section #dfib7;a77#a71 or 7ii7 similar fees on the emissions of greenhouse gasses associated with the production of imports levied by other countries which are parties to such agreement1 7,b7 trade policies1 such as the charge imposed under section #dfib7;a77#a71 which give preference to goods with lower carbon intensities1 7,c7 domestic policies which reduce pollutants other than greenhouse gases1 and 7,d7 policies that prevent such country from facilitating transshipment from other countries4 7c7 ,prioritization ,in negotiations with respect to any carbon club agreement under this section1 the ,president shall seek to reach an agreement with foreign countries which prioritizes the following goals in the following order of importance3 7#a7 ,reduction of global greenhouse gas emissions4 7#b7 ,securing access for the ,united ,states to materials and inputs necessary to manufacture products with lower carbon intensity1 particularly those that are not feasibly produced domestically4 7#c7 ,strengthening the global market competitiveness of lower carbon intensity goods4 7#d7 ,advancing the national security and diplomatic interests of the ,united ,states4 7d7 ,benefits ,with respect to any country which has entered into a carbon club agreement under this section1 if such country-- 7#a7 is not contributing to global industrial overcapacity 7as determined by the ,united ,states ,trade ,representative1 in coordination with other relevant parties71 the charge which would otherwise be imposed under section #dfib7;a77#a7 with respect to covered primary goods produced in a foreign country1 as well as any similar fees on the emissions of greenhouse gasses associated with the production of imports levied by other countries which are parties to such agreement1 may be waived1 provided that such country establishes or maintains policies that reduce the emission of greenhouse gases from its covered national industries with commensurate effect as the carbon intensity charges imposed under section #dfib7;a77#b71 and 7#b7 has a low-income economy1 lower-middle-income economy1 or upper-middle-income economy 7as determined based on classification of the economy of such country by the ,world ,bank71 such country shall receive preference for assistance provided under section #b7;d7 of the ,clean ,competition ,act4 7e7 ,phase-,in 7#a7 ,in general ,subject to paragraph 7#b71 for purposes of any carbon club agreement under this section1 a country may limit application of such agreement to certain covered national industries1 in which case any requirements or benefits provided pursuant to such agreement shall be limited to such industries and any covered products produced by such industries4 7#b7 ,limitation ,not later than #aj years after the date on which any country enters into a carbon club agreement under this section1 all covered national industries of such country shall be subject to the requirements of such agreement4 #dfie4 ,definitions ,for purposes of this subchapter-- 7#a7 ,administrator ,the term ,administrator means the ,administrator of the ,environmental ,protection ,agency4 7#b7 ,baseline carbon intensity ,the term baseline carbon intensity means1 with respect to a covered national industry1 the carbon intensity of the covered national industry in the ,united ,states for calendar year #bjbe4 7#c7 ,,co#b-;e 7,a7 ,in general ,subject to subparagraph 7,b71 the term ,,co#b-;e means1 with respect to a greenhouse gas1 the quantity of such gas that has a global warming potential equivalent to #a metric ton of carbon dioxide1 as determined pursuant to table ,a-#a of subpart ,a of part #ih of title #dj1 ,code of ,federal ,regulations1 as in effect on the date of the enactment of this subchapter4 7,b7 ,methane ,in the case of methane1 the term ,,co#b-;e means the quantity of methane that has the same global warming potential over a #bj-year period as #a metric ton of carbon dioxide1 as determined by the ,administrator in accordance with the findings of the most recent ,assessment ,report of the ,intergovernmental ,panel on ,climate ,change as of the date of enactment of this subchapter4 7#d7 ,covered entity ,the term covered entity means any entity which-- 7,a7 produces any covered primary good1 and 7,b7 is required to report emissions of greenhouse gases under the ,greenhouse ,gas ,reporting ,program 7or would be required to report such emissions notwithstanding any other provision of law prohibiting the implementation of or use of funds for such requirements74 7#e7 ,covered national industry 7,a7 ,in general ,except as provided under section #dfia7;b77#a77;,b77ii71 the term covered national industry means any industry which is assigned a #f-;digit ,,naics code which is included in any of the following clauses3 7i7 #baaabj 7petroleum extraction74 7ii7 #baaacj 7natural gas extraction74 7iii7 #babaad or #babaae 7coal mining74 7iv7 #cbbaaj 7pulp mills74 7v7 #cbbabj 7paper mills74 7vi7 #cbbacj 7paperboard mills74 7vii7 #cbdaaj 7petroleum refineries74 7viii7 #cbdaba 7asphalt paving mixture and block manufacturing74 7ix7 #cbdabb 7asphalt shingle and coating materials manufacturing74 7x7 #cbdaii 7all other petroleum and coal products manufacturing74 7xi7 #cbeaaj 7petrochemical manufacturing74 7xii7 #cbeabj 7industrial gas manufacturing74 7xiii7 #cbeaic 7ethyl alcohol manufacturing74 7xiv7 #cbeaii 7other basic organic chemical manufacturing74 7xv7 #cbecaa 7nitrogenous fertilizer manufacturing74 7xvi7 #cbgbaa1 #cbgbab1 #cbgbac1 or #cbgbae 7glass74 7xvii7 #cbgcaj 7cement74 7xviii7 #cbgdaj or #cbgdbj 7lime and gypsum product manufacturing74 7xix7 #ccaaaj 7iron and steel74 7xx7 #ccacac or #ccacad 7aluminum74 7,b7 ,exceptions 7i7 ,industrial gas manufacturing ,subparagraph 7,a77xii7 shall apply only with respect to the production of hydrogen4 7ii7 ,other basic organic chemical manufacturing ,subparagraph 7,a77xiv7 shall apply only with respect to the production of adipic acid4 7#f7 ,country of origin ,the term country of origin means1 with respect to a covered primary good1 the country where an energy-intensive or emissions-intensive process occurred that transformed the inputs of the good into the covered primary good4 7#g7 ,covered primary good ,the term covered primary good means any good which is produced as part of a trade or business operating within a covered national industry-- 7,a7 including 7except as otherwise provided under subparagraphs 7,b77ii7 and 7,c7 of section #dfia7;b77#a77 any good classifiable under the same #f-;digit subheading of the ,harmonized ,tariff ,schedule of the ,united ,states1 and 7,b7 excluding any waste or scrap byproducts which are not sold4 7#h7 ,eligible facility ,the term eligible facility means any facility 7as such term is defined for purposes of the ,greenhouse ,gas ,reporting ,program7 which is-- 7,a7 operated by a covered entity for the production of any covered primary good1 and 7,b7 located within the ,united ,states4 7#i7 ,finished good 7,a7 ,in general ,the term finished good means any good 7as determined pursuant to a #f-;digit subheading of the ,harmonized ,tariff ,schedule of the ,united ,states7 which is not a covered primary good and which1 as determined by the ,secretary-- 7i7 for calendar years #bjbh and #bjbi-- 7,i7 typically contains greater than #a1jjj pounds of any combination of any covered primary goods1 or 7,,ii7 is typically produced from inputs of any combination of covered primary goods1 the combined value of which comprise more than #ij percent of the total value of the material inputs involved in the production of such good1 7ii7 for calendar years #bjcj and #bjca-- 7,i7 typically contains greater than #ejj pounds of any combination of any covered primary goods1 or 7,,ii7 is typically produced from inputs of any combination of covered primary goods1 the value of which comprise more than #ge percent of the total value of the material inputs involved in the production of such good1 and 7iii7 for any calendar year after calendar year #bjca-- 7,i7 typically contains greater than such amount as is determined by the ,secretary 7as determined in coordination with the relevant parties1 and which shall not be greater than #ejj pounds7 of any combination of any covered primary goods1 or 7,,ii7 is typically produced from inputs of any combination of covered primary goods1 the value of which comprise more than such percentage as is determined by the ,secretary 7as determined in coordination with the relevant parties1 and which shall not be greater than #ge percent7 of the total value of the material inputs involved in the production of such good4 7,b7 ,exception ,the term finished good shall not include any waste or scrap product which is imported or exported4 7#aj7 ,greenhouse gas ,the term greenhouse gas has the meaning given such term under section #baa7o77#a77;,g7 of the ,clean ,air ,act1 as in effect on the date of the enactment of this subchapter4 7#aa7 ,greenhouse gas emissions ,the term greenhouse gas emissions means the amount of greenhouse gases1 expressed in metric tons of ,,co#b-;e1 which were emitted to the atmosphere4 7#ab7 ,greenhouse ,gas ,reporting ,program ,the term ,greenhouse ,gas ,reporting ,program means the ,greenhouse ,gas ,reporting ,program established under part #ih of title #dj1 ,code of ,federal ,regulations1 as in effect on ,january #a1 #bjbe4 7#ac7 ,market economy ,the term market economy means any country which is not designated as a nonmarket economy country pursuant to section #gga7ah7 of the ,tariff ,act of #aicj 7#ai ,u4,s4,c4 #afgg7ah774 7#ad7 ,,naics ,the term ,,naics means the ,north ,american ,industrial ,classification ,system4 7#ae7 ,regional grid ,the term regional grid means the smallest defined region of interconnected power grid 7including power generation assets7 from which a facility draws power that accounts for the total power supplied to the facility by the grid and for which there is reliable data4 7#af7 ,relevant parties ,the term relevant parties means-- 7,a7 the ,administrator1 7,b7 the ,secretary of ,energy1 7,c7 the ,secretary of ,commerce1 7,d7 the ,secretary of ,homeland ,security1 7,e7 the ,united ,states ,trade ,representative1 and 7,f7 the ,chair and ,vice ,chair of the ,united ,states ,international ,trade ,commission4 4 7b7 ,clerical amendment ,the table of subchapters for chapter #ch of the ,internal ,revenue ,code of #aihf is amended by adding at the end thereof the following new item3 ,subchapter ,e--,carbon intensity charge 4 7c7 ,investing in industrial competitiveness 7#a7 ,definitions ,in this subsection3 7,a7 ,administrator ,the term ,administrator means the ,administrator of the ,environmental ,protection ,agency4 7,b7 ,advanced industrial technology ,the term advanced industrial technology means a technology that-- 7i7 is directly involved in an industrial process described in paragraphs 7#a7 through 7#f7 of section #ded7;c7 of the ,energy ,independence and ,security ,act of #bjjg 7#db ,u4,s4,c4 #agaac7;c772 and 7ii7 is designed to accelerate greenhouse gas emissions reduction progress to net-zero at an eligible facility1 as determined by the ,secretary4 7,c7 ,ambition level ,the term ambition level means the level of reduction in carbon intensity described in each of subclauses 7,i7 through 7,,iii7 of paragraph 7#c77;,c77iv74 7,d7 ,applicable fair market value ,the term applicable fair market value1 with respect to an eligible good1 means the average market dollar value of #a unit of the relevant quantity of that eligible good1 as determined by the ,secretary using publicly available market prices and other market data4 7,e7 ,baseline carbon intensity ,the term baseline carbon intensity has the meaning given the term in section #dfie of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,f7 ,benchmark carbon intensity ,the term benchmark carbon intensity1 with respect to a covered primary good or eligible good1 means the carbon intensity of the covered national industry in the ,united ,states for that covered primary good or eligible good for the preceding calendar year4 7,g7 ,best-in-class carbon intensity ,the term best-in-class carbon intensity1 with respect to any proposed eligible facility1 means that the carbon intensity of such facility would be not greater than the carbon intensity of the existing facility with the lowest carbon intensity within the relevant covered national industry1 as determined as of the date of the application for a grant under the program4 7,h7 ,carbon intensity ,the term carbon intensity has the meaning given the term under section #dfia7;b77#a7 of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,i7 ,covered primary good ,the term covered primary good has the meaning given the term in section #dfie of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,j7 ,covered program ,the term covered program means each of the programs established under paragraphs 7#b77;,a7 and 7#c77;,a74 7,k7 ,covered national industry ,the term covered national industry has the meaning given the term in section #dfie of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,l7 ,eligible entity ,the term eligible entity means any person that operates an eligible facility or will operate a proposed eligible facility4 7,m7 ,eligible facility ,the term eligible facility has the meaning given the term in section #dfie of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,n7 ,eligible good ,the term eligible good means a covered primary good determined eligible for a contract for difference by the ,secretary under paragraph 7#c77;,b74 7,o7 ,eligible goods class ,the term eligible goods class means an eligible goods class as described in paragraph 7#c77;,c77iii74 7,p7 ,price discovery ,the term price discovery means a process of determining the true and accurate price of producing #a unit of the relevant quantity of an eligible good using a unique production process4 7,q7 ,relevant quantity ,the term relevant quantity has the meaning given the term under section #dfia7;b77#a77;,e7 of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,r7 ,secretary ,the term ,secretary means the ,secretary of ,energy 7or a designee74 7,s7 ,strike price ,the term strike price means the dollar value of #a unit of the relevant quantity of an eligible good4 7#b7 ,investments in advanced industrial technology 7,a7 ,establishment ,the ,secretary shall establish a competitive program 7referred to in this paragraph as the program7 to award to eligible entities grants1 rebates1 or low-interest loans1 as determined appropriate by the ,secretary1 to support investments in advanced industrial technology1 including in dedicated power generation and storage-- 7i7 in the case of an existing eligible facility1 to reduce the carbon intensity of the existing eligible facility by at least #bj percent2 7ii7 in the case of a proposed eligible facility1 to ensure at least best-in-class carbon intensity of that proposed eligible facility1 with a goal of achieving net-zero carbon intensity2 and 7iii7 in the case of existing and proposed eligible facilities-- 7,i7 to increase the technological and economic competitiveness of covered national industries in the ,united ,states2 7,,ii7 to increase the viability and competitiveness of ,united ,states industrial exports2 and 7,,iii7 to achieve emissions reduction in covered national industries4 7,b7 ,application process ,the ,secretary shall develop an application process for the program similar to the application process for the national grant program of the ,administrator under subtitle ,g of title ,,vii of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #afaca et seq474 7,c7 ,preference ,in awarding funding under the program1 the ,secretary shall give preference to eligible entities-- 7i7 for projects that would-- 7,i7 result in the greatest decrease in carbon intensity2 7,,ii7 support the demonstration and catalyze the deployment of first-of-a-kind technologies and processes2 7,,iii7 provide the greatest benefit for the greatest number of people within the area in which the eligible facility is located2 7,,iv7 advance ,united ,states global strategic interests2 7,v7 provide the greatest potential for direct and indirect domestic job creation2 and 7,,vi7 maximize improvement in local air quality2 and 7ii7 for facilities located in-- 7,i7 economically distressed communities that have experienced a loss of manufacturing jobs2 and 7,,ii7 communities with high cumulative pollution burdens1 as determined by the ,administrator4 7,d7 ,cost share ,the ,secretary shall require an eligible entity to provide not less than #ej percent of the cost of a project carried out pursuant to the program4 7,e7 ,recapture of funds ,the ,secretary shall recapture1 pursuant to such regulations or other guidance issued by the ,secretary1 the funding awarded to an eligible entity if the eligible entity fails-- 7i7 within #c years of the award of funding1 to complete the proposed investments or achieve an interim progress milestone agreed to with the ,secretary2 or 7ii7 during the #aj-year period after the proposed investments are placed in service-- 7,i7 in the case of an existing eligible facility1 to achieve and maintain the reduction in carbon intensity proposed in the application2 or 7,,ii7 in the case of a proposed eligible facility1 to achieve and maintain the best-in-class carbon intensity proposed in the application4 7,f7 ,outreach ,the ,secretary shall conduct outreach-- 7i7 to notify the public about the program2 and 7ii7 to inform eligible entities of technologies that can reduce facility carbon intensity or ensure best-in-class carbon intensity4 7#c7 ,contracts for difference 7,a7 ,establishment ,the ,secretary shall establish a program 7referred to in this paragraph as the program7 to enter into contracts for difference 7referred to in this paragraph as covered contracts71 on a competitive basis1 with eligible entities for payment of costs associated with the production of eligible goods manufactured by those eligible entities-- 7i7 to accelerate the deployment of commercially available advanced industrial technology2 7ii7 to demonstrate and advance the commercialization of first-of-a-kind advanced industrial technology2 7iii7 to increase the technological and economic competitiveness of covered national industries in the ,united ,states2 7iv7 to increase the viability and competitiveness of ,united ,states advanced industrial technology exports2 and 7v7 to reduce the carbon intensity of covered national industries in the ,united ,states4 7,b7 ,eligible goods 7i7 ,in general ,the ,secretary shall determine which covered primary goods are eligible for covered contracts under the program4 7ii7 ,priority ,in making determinations under clause 7i71 the ,secretary shall give priority to covered primary goods-- 7,i7 that contribute a greater proportion of total covered emissions relative to other covered primary goods in the same covered national industry2 7,,ii7 the market conditions for which are conducive to fair and competitive auctions2 7,,iii7 that have transparent and accurate price indices2 7,,iv7 that face large marginal costs of decarbonization that cannot feasibly be equalized by the carbon intensity charge levied under section #dfib of the ,internal ,revenue ,code of #aihb 7as added by subsection 7a772 7,v7 that provide the greatest potential for direct and indirect domestic job creation2 7,,vi7 that are feasibly expected to continue to have robust market demand for the duration of the applicable covered contract2 and 7,,vii7 that have the greatest ability to reduce hazardous local air quality if awarded a covered contract4 7,c7 ,auctions 7i7 ,in general ,to award covered contracts under the program1 the ,secretary shall hold competitive auctions for each eligible goods class4 7ii7 ,application ,to participate in an auction under clause 7i71 an eligible entity shall submit to the ,secretary an application that includes-- 7,i7 a description of the eligible goods covered under the proposed covered contract2 7,,ii7 information on any existing or proposed facilities that will produce the eligible goods covered under the proposed covered contract1 including location1 employment numbers1 and any planned or ongoing investments in or retrofits of the facilities2 7,,iii7 a description of the method of production1 including technologies and feedstocks1 that will be used to manufacture the eligible goods covered under the proposed covered contract2 7,,iv7 the details of any investments or retrofits required to produce the eligible goods covered under the proposed covered contract1 including the construction of new facilities2 7,v7 the expected carbon intensity of the eligible goods covered under the proposed covered contract for each year of the duration of the proposed covered contract2 7,,vi7 the proposed strike price of the eligible goods covered under the proposed covered contract2 7,,vii7 the expected annual production volume 7expressed in the relevant quantity7 of the eligible goods covered under the proposed covered contract for each year of the proposed covered contract2 and 7,,viii7 any other information determined necessary by the ,secretary4 7iii7 ,eligible goods class 7,i7 ,in general ,for each auction under clause 7i71 the ,secretary shall assign each eligible good to an eligible goods class1 which may comprise a single eligible good or multiple eligible goods4 7,,ii7 ,class of multiple eligible goods ,in determining the eligible goods that shall be grouped into a single eligible goods class for purposes of an auction under clause 7i71 the ,secretary shall-- 7aa7 only group eligible goods that can reasonably compete with each other for market share in the economy and on the basis of carbon intensity in the auction2 and 7bb7 prioritize the creation of eligible goods classes that are conducive to fair and competitive auctions4 7,,iii7 ,benchmark carbon intensity ,the benchmark carbon intensity for an eligible goods class with eligible goods from multiple covered national industries shall be the mean benchmark carbon intensity of those covered national industries 7after converting to the same relevant quantity1 if necessary74 7iv7 ,ambition level ,if the ,secretary determines that there are conditions to support sufficient auction competitiveness1 the ,secretary may hold separate auctions within an eligible goods class for projects that yield each of the following percentages of reduction in carbon intensity3 7,i7 ,a reduction in carbon intensity from benchmark carbon intensity of not less than #bj percent but not more than #ej percent4 7,,ii7 ,a reduction in carbon intensity from benchmark carbon intensity of not less than #ej percent but not more than #hj percent4 7,,iii7 ,a reduction in carbon intensity from benchmark carbon intensity of more than #hj percent4 7v7 ,selection ,the ,secretary shall determine the winners of each auction under clause 7i7 by selecting projects in rank order from the lowest to the highest value of the quotient obtained by dividing-- 7,i7 the expected per-unit payment amount described in subparagraph 7,f77ii77,,ii71 which shall be determined by the ,secretary using the proposed strike price of the eligible entity and the fair market value at the time of auction2 by 7,,ii7 an amount equal to the difference between-- 7aa7 the benchmark carbon intensity2 and 7bb7 the carbon intensity of the eligible good under the proposed covered contract4 7vi7 ,administration 7,i7 ,in general ,the ,secretary shall design and manage competitive auctions under clause 7i7 to maximize fairness1 competitiveness1 accurate price discovery1 and the most efficient utilization of public funds to achieve reductions in carbon intensity and the other goals of the program4 7,,ii7 ,auction budget ,the ,secretary shall establish a budget for each auction held under the program4 7,d7 ,requirements 7i7 ,carbon intensity reduction ,each covered contract awarded under the program shall be required to achieve at least a #bj percent reduction in carbon intensity as compared to the benchmark carbon intensity on the date of commencement of the contract4 7ii7 ,labor ,an eligible entity awarded a covered contract under the program shall be required-- 7,i7 to pay prevailing wages for any work performed1 including for the execution of any investments or retrofits necessary to produce the applicable eligible goods2 and 7,,ii7 to establish a community benefits agreement in conjunction with the production of the applicable eligible goods1 including the execution of any investments or retrofits necessary to produce those eligible goods4 7,e7 ,contract terms ,each covered contract under the program shall include the following3 7i7 ,a description of the project under the covered contract1 including-- 7,i7 details on the eligible goods1 including relevant distinguishing qualities and properties and the methodology of producing those eligible goods2 7,,ii7 the execution of any investments or retrofits necessary to produce those eligible goods2 and 7,,iii7 performance requirements for the project and procedures and penalties if those requirements are not met4 7ii7 ,the maximum payment amount determined pursuant to subparagraph 7,f77iv74 7iii7 ,the expected carbon intensity of each eligible good covered under the covered contract1 estimated for each year of the duration of the covered contract4 7iv7 ,the strike price for each eligible good under the covered contract1 including any procedures for adjusting the strike price over time1 pursuant to subparagraph 7,f77iii74 7v7 ,the methods and data sources to be used for calculating covered emissions and the applicable fair market value of eligible goods1 as established by the ,secretary4 7vi7 ,details of the community benefits agreement established pursuant to subparagraph 7,d77ii77,,ii74 7vii7 ,the duration of the covered contract1 subject to any early termination rules established by the ,secretary4 7viii7 ,any other terms determined necessary by the ,secretary4 7,f7 ,payments 7i7 ,in general ,under each covered contract entered into under the program1 the ,secretary shall make at least #a payment annually4 7ii7 ,amount ,the amount of a payment under clause 7i71 with respect to an eligible good produced by an eligible entity over a designated period of time1 as determined by the ,secretary1 shall equal the product obtained by multiplying-- 7,i7 the quantity of the eligible good 7expressed in the relevant quantity7 produced by the eligible entity during the designated period of time2 and 7,,ii7 the per-unit payment amount1 which shall be the difference between-- 7aa7 the strike price2 and 7bb7 the average applicable fair market value of the same eligible good during the designated period of time1 as determined by the ,secretary4 7iii7 ,dynamic indexing ,the ,secretary shall adjust the strike price established in each covered contract over time to account for-- 7,i7 inflation2 and 7,,ii7 changes in the cost of key inputs to the production of the eligible good1 as determined by the ,secretary1 including1 at a minimum-- 7aa7 natural gas2 7bb7 hydrogen2 and 7cc7 electricity4 7iv7 ,maximum payment amount ,for each covered contract under the program1 the ,secretary shall establish a maximum amount that may be paid under that covered contract1 which amount-- 7,i7 takes into consideration expected levels of-- 7aa7 the quantity of eligible goods covered under the covered contract 7expressed in the relevant quantity7 produced over the duration of the covered contract2 and 7bb7 the per-unit payment amount described in clause 7ii77,,ii72 7,,ii7 maximizes the deployment of available appropriations and the achievement of the goals of the program2 and 7,,iii7 ensures that obligated expenditures do not exceed available appropriations4 7,g7 ,penalties ,the ,secretary may impose financial and other penalties on any eligible entity that fails to meet the performance requirements established by the ,secretary for the covered contract of that eligible entity4 7,h7 ,public notice ,not later than #ahj days before each auction is held under the program1 the ,secretary shall publish guidance on the auction process1 including-- 7i7 the timeline and selection process2 7ii7 a list of eligible goods1 eligible goods classes1 and ambition levels1 if applicable2 7iii7 the auction budget for each eligible goods class and ambition level1 if applicable2 7iv7 the benchmark carbon intensity for each eligible goods class2 7v7 the applicable fair market value for each eligible goods class1 measured as the average applicable fair market value over the preceding #ab months2 and 7vi7 any additional information needed to facilitate a fair and competitive auction1 as determined by the ,secretary4 7,i7 ,rulemaking 7i7 ,in general ,the ,secretary shall-- 7,i7 not later than #a year after the date of enactment of this ,act1 promulgate rules for the implementation of the program2 and 7,,ii7 update those rules at least once every #e years thereafter4 7ii7 ,effect on contracts ,any update made under clause 7i77,,ii7 shall not apply to covered contracts under the program in effect before the date of effectiveness of the update4 7#d7 ,emissions reduction goal ,in awarding funding under the covered programs1 the ,secretary shall seek to keep the aggregate carbon intensity of each covered national industry in the ,united ,states below the value of the applicable percentage of the baseline carbon intensity for that covered national industry4 7#e7 ,allocation of funding ,in awarding funding under the covered programs1 the ,secretary shall1 to the maximum extent practicable1 allocate funds to eligible entities that produce covered primary goods that are included within a covered national industry in approximate proportion to the share of total greenhouse gas emissions that the covered national industry is responsible for emitting4 7#f7 ,offices ,the ,secretary may establish #a or more offices within the ,department of ,energy to administer the covered programs4 7#g7 ,evaluation and report ,not later than ,january #a1 #bjcb1 the ,secretary shall submit to ,congress a report evaluating the efficacy of the covered programs4 7#h7 ,appropriations 7,a7 ,in general ,for fiscal year #bjbg and each subsequent fiscal year1 in addition to amounts otherwise available1 there are appropriated1 out of any funds in the ,treasury not otherwise appropriated1 to the ,secretary to carry out this subsection an amount equal to the amount determined under subparagraph 7,b7 with respect to such fiscal year4 7,b7 ,appropriation 7i7 ,fiscal year #bjbg ,for fiscal year #bjbg1 the amount appropriated for purposes of paragraph 7#b7 shall be #ge1jjj1jjj1jjj4 7ii7 ,subsequent fiscal years ,for fiscal year #bjbh and each subsequent fiscal year1 the amount appropriated for purposes of paragraph 7#b7 shall be equal to the applicable amount 7as determined under subparagraph 7,c77 for the preceding fiscal year4 7,c7 ,applicable amount ,for purposes of this paragraph1 the term applicable amount means-- 7i7 for any fiscal year beginning prior to the date on which the ,secretary of the ,treasury determines the total increase in revenues to the ,treasury by reason of the application of subchapter ,e of chapter #ch of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a77 is equal to or greater than #ajj1jjj1jjj1jjj1 #j2 or 7ii7 with respect to any fiscal year beginning after the date described in clause 7i71 an amount equal to #be percent of the increase in revenues to the ,treasury during such fiscal year by reason of the application of subchapter ,e of chapter #ch of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7d7 ,economic ,support ,fund of ,department of ,state 7#a7 ,in general ,for fiscal year #bjbg and each subsequent fiscal year1 in addition to amounts otherwise available1 there are appropriated1 out of any funds in the ,treasury not otherwise appropriated1 to the ,department of ,state an amount equal to the amount determined under paragraph 7#b7 with respect to such fiscal year1 with such amount to be made available for bilateral and multilateral assistance to support climate and clean energy programs4 7#b7 ,preference ,in providing assistance under paragraph 7#a71 the ,secretary of ,state 7in conjunction with the ,secretary of the ,treasury1 the ,secretary of ,energy1 and the ,administrator of the ,environmental ,protection ,agency7 shall allocate such assistance in a manner which prioritizes the following goals in the following order of importance3 7,a7 ,facilitating the negotiation of carbon club agreements pursuant to section #dfid of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774 7,b7 ,providing assistance to countries described in section #dfid7;d77#b7 of such ,code4 7,c7 ,maximizing the reduction of global greenhouse gas emissions4 7,d7 ,securing access for the ,united ,states to materials and inputs necessary to manufacture products with lower carbon intensity1 particularly those that are not feasibly produced domestically4 7,e7 ,supporting human development and reductions in poverty4 7,f7 ,advancing the national security and diplomatic interests of the ,united ,states4 7#c7 ,appropriation 7,a7 ,fiscal year #bjbg ,for fiscal year #bjbg1 the amount appropriated for purposes of paragraph 7#a7 shall be #be1jjj1jjj1jjj4 7,b7 ,subsequent fiscal years ,for fiscal year #bjbh and each subsequent fiscal year1 the amount appropriated for purposes of paragraph 7#a7 shall be equal to the applicable amount 7as determined under paragraph 7#d77 for the preceding fiscal year4 7#d7 ,applicable amount ,for purposes of this subsection1 the term applicable amount means-- 7,a7 for any fiscal year beginning prior to the date on which the ,secretary of the ,treasury determines the total increase in revenues to the ,treasury by reason of the application of subchapter ,e of chapter #ch of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a77 is equal to or greater than #ajj1jjj1jjj1jjj1 #j1 or 7,b7 with respect to any fiscal year beginning after the date described in subparagraph 7,a71 an amount equal to #be percent of the increase in revenues to the ,treasury during such fiscal year by reason of the application of subchapter ,e of chapter #ch of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a774