‘‘(m) GREENHOUSE GAS.—The term ‘greenhouse 
gas’ means carbon dioxide (CO2), methane (CH4), nitrous 
oxide (N2O), and other gases as defined by rule of the 
Administrator. 
‘‘(n) GREENHOUSE
GAS
CONTENT.—The term 
‘greenhouse gas content’ means the amount of greenhouse 
gases of a product or a fuel, expressed in metric tons of 
CO2-e, which would be emitted to the atmosphere by the 
use of a covered fuel and shall include, nonexclusively, 
emissions of carbon dioxide (CO2), nitrous oxide (N2O), 
methane (CH4), and other greenhouse gases as identified 
by rule of the Administrator. 
‘‘(o) GREENHOUSE GAS EFFECT.—The term ‘green-
house gas effect’ means the adverse effects of greenhouse 
gases on health or welfare caused by the greenhouse gas’s 
heat-trapping potential or its effect on ocean acidification. 
‘‘(p) IMPORT.—Irrespective of any other definition in 
law or treaty, the term ‘import’ means to land on, bring 
into, or introduce into any place subject to the jurisdiction 
of the United States. 
‘‘(q) PETROLEUM.—The term ‘petroleum’ means oil 
removed from the earth or the oil derived from tar sands 
or shale. 
‘‘(r) PRODUCTION GREENHOUSE GAS EMISSIONS.— 
The term ‘production greenhouse gas emissions’ means 
VerDate Sep 11 2014 
23:09 Sep 30, 2023
Jkt 039200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5744.IH
H5744
pbinns on DSKJLVW7X2PROD with $$_JOB
the quantity of greenhouse gases, expressed in metric tons 
of CO2-e, emitted to the atmosphere resulting from, non-
exclusively, the production, manufacture, assembly, trans-
portation, or financing of a product. 
‘‘(s) UPSTREAM GREENHOUSE GAS EMISSIONS.— 
The term ‘upstream greenhouse gas emissions’ means the 
quantity of greenhouse gases, expressed in metric tons of 
CO2-e, emitted to the atmosphere resulting from, non-
exclusively, the extraction, processing, transportation, fi-
nancing, or other preparation of a covered fuel for use. 
‘‘SEC. 9902. CARBON FEE. 
‘‘(a) CARBON FEE.—There is hereby imposed a car-
bon fee on any covered entity’s emitting use, or sale or 
transfer for an emitting use, of any covered fuel. 
‘‘(b) AMOUNT OF THE CARBON FEE.—The carbon 
fee imposed by this section is an amount equal to— 
‘‘(1) the greenhouse gas content of the covered 
fuel, multiplied by 
‘‘(2) the carbon fee rate. 
‘‘(c) CARBON FEE RATE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The carbon fee rate, with 
respect to any use, sale, or transfer during a cal-
endar year, shall be— 
VerDate Sep 11 2014 
23:09 Sep 30, 2023
Jkt 039200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5744.IH
H5744
pbinns on DSKJLVW7X2PROD with $$_JOB
‘‘(A) in the case of calendar year 2023, 
$15 per metric ton of CO2-e, and 
‘‘(B) except as provided in paragraph (2), 
in the case of any calendar year thereafter— 
‘‘(i) the carbon fee rate in effect 
under this subsection for the preceding cal-
endar year, plus 
‘‘(ii) $10 per metric ton of CO2-e. 
‘‘(2) EXCEPTIONS.— 
‘‘(A) 
INCREASED
CARBON
FEE
RATE 
AFTER MISSED ANNUAL EMISSIONS REDUCTION 
TARGET.—In the case of any year immediately 
following a year for which the Secretary deter-
mines under section 9903(b) that the actual 
emissions of greenhouse gases from covered 
fuels exceeded the emissions reduction target 
for the previous year, paragraph (1)(B)(ii) shall 
be applied by substituting ‘$15’ for the dollar 
amount otherwise in effect for the calendar year 
under such paragraph. 
‘‘(B) CESSATION OF CARBON FEE RATE IN-
CREASE AFTER CERTAIN EMISSION REDUCTIONS 
ACHIEVED.—In the case of any year imme-
diately following a year for which the Secretary 
determines under 9903(b) that actual emissions 
VerDate Sep 11 2014 
23:09 Sep 30, 2023
Jkt 039200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5744.IH
H5744
pbinns on DSKJLVW7X2PROD with $$_JOB
of greenhouse gases from covered fuels is not 
more than 10 percent of the greenhouse gas 
emissions from covered fuels during the year 
2005, paragraph (1)(B)(ii) shall be applied by 
substituting ‘$0’ for the dollar amount other-
wise in effect for the calendar year under such 
paragraph. 
‘‘(3) INFLATION ADJUSTMENT.—In the case of 
any calendar year after 2023, each of the dollar 
amounts in paragraphs (1)(B) and (2)(A) shall be 
increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year, determined by substituting ‘calendar year 
2022’ for ‘calendar year 2016’ in subparagraph 
(A)(ii) thereof. 
‘‘(d) EXEMPTION
AND
REFUND.—The Secretary 
shall prescribe such rules as are necessary to ensure the 
fee imposed by this section is not imposed with respect 
to any nonemitting use, or any sale or transfer for a non-
emitting use, including rules providing for the refund of 
any carbon fee paid under this section with respect to any 
such use, sale, or transfer. 
‘‘(e) EXEMPTIONS.— 
VerDate Sep 11 2014 
23:09 Sep 30, 2023
Jkt 039200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H5744.IH
H5744
pbinns on DSKJLVW7X2PROD with $$_JOB
‘‘(1) AGRICULTURE.— 
‘‘(A) FUEL.—If any covered fuel or its de-
rivative is used on a farm for a farming pur-
pose, the Secretary shall pay (without interest) 
to the ultimate purchaser of such covered fuel 
or its derivative, the total amount of carbon 
fees previously paid upon that covered fuel or 
its derivative, as specified by rule of the Sec-
retary. 
‘‘(B) FARM, FARMING USE, AND FARMING 
PURPOSE.—The terms ‘farm’, ‘farming use’, 
and ‘farming purpose’ shall have the respective 
meanings given such terms under section 
6420(c). 
‘‘(C) OTHER
GREENHOUSE
GASES
EMIS-
SIONS
FROM
AGRICULTURE.—The carbon fee 
shall not be levied upon non-fossil fuel green-
house gas emissions which occur on a farm. 
‘‘(2) 
ARMED
FORCES
OF
THE
UNITED 
STATES.—If any covered fuel or its derivative is 
used by the Armed Forces of the United States as 
supplies for vessels of war, vehicles, or electrical 
power generation equipment, the Secretary shall pay 
(without interest) to the ultimate purchaser of such 
covered fuel or its derivative, the total amount of 
VerDate Sep 11 2014 
23:09 Sep 30, 2023
Jkt 039200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H5744.IH
H5744
pbinns on DSKJLVW7X2PROD with $$_JOB
carbon fees previously paid upon that covered fuel or 
its derivative, as specified by rule of the Secretary. 
‘‘SEC. 9903. EMISSIONS REDUCTION SCHEDULE. 
‘‘(a) IN GENERAL.—An emissions reduction schedule 
for greenhouse gas emissions from covered fuels is hereby 
established, as follows: 
‘‘(1) REFERENCE YEAR.—The net greenhouse 
gas emissions during the year 2005 shall be the ref-
erence amount of emissions and shall be determined 
from the ‘Inventory of U.S. Greenhouse Gas Emis-
sions and Sinks: 1990–2021’ published by the Envi-
ronmental Protection Agency in April of 2023. 
‘‘(2) EMISSIONS
REDUCTION
TARGET.—The 
first emission reduction target shall be for the year 
2025. The emission target for each year thereafter 
shall be the previous year’s target emissions minus 
a percentage of emissions during the reference year 
determined in accordance with the following table: 
‘‘Year 
Emissions Reduction Target 
2005 
Reference year 
2023 to 2024 
No emissions reduction target 
2025 to 2030 
8 percent of 2005 emissions per year 
2031 to 2050 
2.5 percent of 2005 emissions per year. 
‘‘(b) ADMINISTRATIVE DETERMINATION.—Not later 
than 60 days after the beginning of each calendar year 
VerDate Sep 11 2014 
23:09 Sep 30, 2023
Jkt 039200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5744.IH
H5744
pbinns on DSKJLVW7X2PROD with $$_JOB