I 
119TH CONGRESS 
1ST SESSION H. R. 6918 
To amend the Clean Air Act to establish a program to annually phase 
down greenhouse gas emissions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 19, 2025 
Mr. TONKO introduced the following bill; which was referred to the Committee 
on Energy and Commerce, and in addition to the Committees on Ways 
and Means, Education and Workforce, and Science, Space, and Tech-
nology, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Clean Air Act to establish a program to 
annually phase down greenhouse gas emissions, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Climate Pollution Standard and Community Investment 
Act of 2025’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title; table of contents. 
TITLE I—NATIONAL CLIMATE RESPONSE 
Sec. 101. Climate pollution reduction certainty. 
Sec. 102. Clean Energy Rebate Program. 
Sec. 103. Worker and Community Assistance Fund. 
Sec. 104. Cleaner Air Community Fund. 
Sec. 105. Negative Emissions Activities Fund. 
Sec. 106. Energy Innovation Fund. 
Sec. 107. Emission allowance market oversight. 
Sec. 108. Direct hire authority for implementation of this title. 
TITLE II—WORKER AND COMMUNITY ASSISTANCE 
Sec. 201. Definitions. 
Sec. 202. Energy and economic transition impact studies. 
Sec. 203. Office of Energy and Economic Transition. 
Sec. 204. Interagency Energy and Economic Transition Task Force. 
Sec. 205. Stakeholder Advisory Committee. 
Sec. 206. Assistance for adversely affected communities. 
Sec. 207. Community-Based Transition Hub program. 
Sec. 208. Assistance for adversely affected workers. 
TITLE I—NATIONAL CLIMATE 
RESPONSE 
SEC. 101. CLIMATE POLLUTION REDUCTION CERTAINTY. 
(a) IN GENERAL.—The Clean Air Act (42 U.S.C. 
7401 et seq.) is amended by adding after title VI the fol-
lowing new title: 
‘‘TITLE 
VII—CLIMATE 
POLLU-
TION REDUCTION PROGRAM 
‘‘PART A—GENERAL 
‘‘SEC. 701. DEFINITIONS. 
‘‘In this title: 
‘‘(1) ATTRIBUTABLE GREENHOUSE GAS EMIS-
SIONS.—The term ‘attributable greenhouse gas emis-
sions’, for a given calendar year, means— 
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‘‘(A) for a covered entity that is a fuel pro-
ducer or importer described in paragraph 
(4)(B), greenhouse gas emissions that would be 
emitted from the combustion of any petroleum- 
based or coal-based liquid fuel, petroleum coke, 
or natural gas liquid, produced or imported by 
that covered entity during that calendar year 
for sale or distribution in interstate commerce; 
‘‘(B) for a covered entity that is a bulk 
producer or importer described in paragraph 
(4)(C), the tons of carbon dioxide equivalent of 
any gas described in clauses (i) through (v) of 
paragraph (4)(C)— 
‘‘(i) produced or imported by such 
covered entity during that calendar year 
for sale or distribution in interstate com-
merce; or 
‘‘(ii) released as fugitive emissions in 
the production of fluorinated gas; and 
‘‘(C) for a natural gas local distribution 
company described in paragraph (4)(J), green-
house gas emissions that would be emitted from 
the combustion of the natural gas, and any 
other gas meeting the specifications for com-
mingling with natural gas for purposes of deliv-
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ery, as determined by the Administrator, that 
such entity delivered during that calendar year 
to customers that are not covered entities. 
‘‘(2) 
CARBON
DIOXIDE
EQUIVALENT.—The 
term ‘carbon dioxide equivalent’ means the unit of 
measure, expressed in tons, of a greenhouse gas as 
provided under section 713. 
‘‘(3) COMPLIANCE PERIOD.— 
‘‘(A) The term ‘compliance period’, with 
respect to compliance periods 2 through 10 and 
subsequent compliance periods, means the pe-
riod of 3 consecutive calendar years following 
the preceding compliance period. 
‘‘(B) The term ‘compliance period 1’ 
means calendar years 2027, 2028, and 2029. 
‘‘(4) COVERED ENTITY.—The term ‘covered en-
tity’ means each of the following: 
‘‘(A) Any electricity source with a name-
plate capacity of at least 25 megawatts. 
‘‘(B) Any stationary source that produces, 
and any entity that imports, for sale or dis-
tribution in interstate commerce in 2025 or any 
subsequent year, petroleum-based or coal-based 
liquid fuel, petroleum coke, or natural gas liq-
uid, which, in the aggregate, if combusted 
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would emit 25,000 or more tons of carbon diox-
ide equivalent, as determined by the Adminis-
trator. 
‘‘(C) Any stationary source that produces, 
and any entity that imports, for sale or dis-
tribution in interstate commerce, in bulk, or in 
products designated by the Administrator, in 
2025 or any subsequent year, 25,000 or more 
tons of carbon dioxide equivalent of— 
‘‘(i) fossil fuel-based carbon dioxide; 
‘‘(ii) nitrous oxide; 
‘‘(iii) perfluorocarbons; 
‘‘(iv) sulfur hexafluoride; 
‘‘(v) any other fluorinated gas, except 
for nitrogen trifluoride, that is a green-
house gas, as designated by the Adminis-
trator under section 712; or 
‘‘(vi) any combination of greenhouse 
gases described in clauses (i) through (v). 
‘‘(D) Any stationary source that emits 
25,000 or more tons of carbon dioxide equiva-
lent of nitrogen trifluoride in 2025 or any sub-
sequent year. 
‘‘(E) Any geologic sequestration site. 
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‘‘(F) Any stationary source in any of the 
following industrial sectors: 
‘‘(i) Adipic acid production. 
‘‘(ii) Aluminum production. 
‘‘(iii) Ammonia manufacturing. 
‘‘(iv) Cement production. 
‘‘(v) Hydrochlorofluorocarbon produc-
tion. 
‘‘(vi) Lime manufacturing. 
‘‘(vii) Nitric acid production. 
‘‘(viii) Petroleum refining. 
‘‘(ix) Phosphoric acid production. 
‘‘(x) Silicon carbide production. 
‘‘(xi) Soda ash production. 
‘‘(xii) Titanium dioxide production. 
‘‘(xiii) Coal-based liquid or gaseous 
fuel production. 
‘‘(G) Any stationary source in the chemical 
or petrochemical sector that, in 2025 or any 
subsequent year— 
‘‘(i) produces acrylonitrile, carbon 
black, ethylene, ethylene dichloride, ethyl-
ene oxide, or methanol; or 
‘‘(ii) emits 25,000 or more tons of 
carbon dioxide equivalent from the produc-
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tion of any number of chemical or petro-
chemical products. 
‘‘(H) Any stationary source that— 
‘‘(i) emits 25,000 or more tons of car-
bon dioxide equivalent in 2025 or any sub-
sequent year; and 
‘‘(ii) is in one of the following indus-
trial sectors: ethanol production, ferroalloy 
production, fluorinated gas production, 
food processing, glass production, hydrogen 
production, iron and steel production, lead 
production, magnesium production, pulp 
and paper manufacturing, landfill oper-
ations, wastewater treatment operations, 
and zinc production. 
‘‘(I) Any fossil fuel-fired combustion device 
(such as a boiler) or grouping of such devices 
that— 
‘‘(i) is all or part of an industrial 
source not specified in subparagraph (D), 
(F), (G), or (H); and 
‘‘(ii) emits 25,000 or more tons of 
carbon dioxide equivalent in 2025 or any 
subsequent year. 
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‘‘(J) Any natural gas local distribution 
company that in 2025 or any subsequent year 
delivers to customers that are not covered enti-
ties 460,000,000 cubic feet or more of the total 
of— 
‘‘(i) natural gas; and 
‘‘(ii) any other gas meeting the speci-
fications for commingling with natural gas 
for purposes of delivery, as determined by 
the Administrator. 
‘‘(5) CRITERIA
AIR
POLLUTANT.—The term 
‘criteria air pollutant’ means an air pollutant subject 
to national ambient air quality standards under sec-
tion 109. 
‘‘(6) 
DESIGNATED
REPRESENTATIVE.—The 
term ‘designated representative’ means, with respect 
to an entity described in subparagraph (A), (B), or 
(C), an individual authorized, through a certificate 
of representation submitted to the Administrator by 
the owners and operators or similar entity official, to 
represent the owners and operators or similar entity 
official in all matters pertaining to this title (includ-
ing the holding, transfer, or disposition of emission 
allowances), and to make all submissions to the Ad-
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ministrator under this title. Entities covered under 
this paragraph are— 
‘‘(A) covered entities; 
‘‘(B) reporting entities (as defined in sec-
tion 714); and 
‘‘(C) any other entities receiving or holding 
emission allowances under this title. 
‘‘(7) ELECTRICITY
SOURCE.—The term ‘elec-
tricity source’ means a stationary source that in-
cludes one or more combustion devices that, on Jan-
uary 1, 2025, or any date thereafter, are fossil fuel- 
fired and serve a generator that produces electricity 
for sale. 
‘‘(8) EMISSION ALLOWANCE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘emission allow-
ance’ means a limited authorization to emit, or 
have attributable greenhouse gas emissions in 
an amount of, 1 ton of carbon dioxide equiva-
lent of a greenhouse gas in accordance with this 
title. 
‘‘(B) OVERBURDENED
COMMUNITIES.— 
With respect to a covered entity that is a sta-
tionary source, including electricity sources and 
industrial sources, operating in a location des-
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ignated as a Cleaner Air Community under sec-
tion 733 of part C of this title, the term ‘emis-
sion allowance’ means a limited authorization to 
emit 0.5 tons of carbon dioxide equivalent of a 
greenhouse gas in accordance with this title. 
‘‘(9) FOSSIL
FUEL.—The term ‘fossil fuel’ 
means natural gas, petroleum, or coal, or any form 
of solid, liquid, or gaseous fuel derived therefrom. 
‘‘(10) FOSSIL
FUEL-FIRED.—The term ‘fossil 
fuel-fired’ means powered by combustion of fossil 
fuel, alone or in combination with any other fuel, re-
gardless of the percentage of fossil fuel consumed. 
‘‘(11) FUGITIVE EMISSIONS.—The term ‘fugi-
tive emissions’ means greenhouse gas emissions from 
leaks, valves, joints, or other small openings in 
pipes, ducts, or other equipment, or from vents. 
‘‘(12) GEOLOGIC
SEQUESTRATION
SITE.—The 
term ‘geologic sequestration site’ means a site where 
a greenhouse gas is geologically sequestered. 
‘‘(13) GREENHOUSE
GAS.—The term ‘green-
house gas’ means any gas described or designated 
under section 712(a). 
‘‘(14) GREENHOUSE GAS EMISSION.—The term 
‘greenhouse gas emission’ means the release of a 
greenhouse gas into the ambient air, except— 
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‘‘(A) a release of methane for which the 
Administrator imposes and collects a charge 
under section 136(c) of the Clean Air Act; 
‘‘(B) a release of a hydrofluorocarbon that 
is regulated pursuant to title VI of this Act or 
section 103 of the Consolidated Appropriations 
Act, 2021; and 
‘‘(C) greenhouse gases that are captured 
and geologically sequestered, unless the green-
house gas is later released into the ambient air. 
‘‘(15) HAZARDOUS AIR POLLUTANT.—The term 
‘hazardous air pollutant’ has the meaning given such 
term in section 112(a). 
‘‘(16) HOLD.—The term ‘hold’ means, with re-
spect to an emission allowance, to have in the appro-
priate account in the emission allowance tracking 
system established under section 718. 
‘‘(17) HOLDER.—The term ‘holder’ means, with 
respect to an emission allowance, the entity that 
holds such emission allowance. 
‘‘(18) INDUSTRIAL SOURCE.—The term ‘indus-
trial source’ means any stationary source that— 
‘‘(A) is not an electricity source; and 
‘‘(B) is in— 
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‘‘(i) the manufacturing sector (as de-
fined in North American Industrial Classi-
fication System codes 31, 32, and 33); or 
‘‘(ii) the natural gas processing or 
natural gas pipeline transportation sector 
(as defined in North American Industrial 
Classification System codes 211112 and 
486210). 
‘‘(19) NATURAL GAS LIQUID.—The term ‘nat-
ural gas liquid’ means ethane, butane, isobutane, 
natural gasoline, and propane. 
‘‘(20) NATURAL
GAS
LOCAL
DISTRIBUTION 
COMPANY.—The term ‘natural gas local distribution 
company’ has the meaning given the term ‘local dis-
tribution company’ in section 2(17) of the Natural 
Gas Policy Act of 1978. 
‘‘(21) 
NEGATIVE
EMISSIONS
ACTIVITIES 
FUND.—The term ‘Negative Emissions Activities 
Fund’ means the fund established under section 105 
of the Climate Pollution Standard and Community 
Investment Act of 2025. 
‘‘(22) OUTPUT.—The term ‘output’ means the 
total tons or other standard unit (as determined by 
the Administrator) produced by an entity in an in-
dustrial sector. 
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‘‘(23) PETROLEUM.—The term ‘petroleum’ in-
cludes crude oil, tar sands, oil shale, and heavy oils. 
‘‘(24) RETIRE.—The term ‘retire’, with respect 
to an emission allowance, means to disqualify such 
emission allowance for any subsequent use. 
‘‘(25) SEQUESTERED; SEQUESTRATION.—The 
terms ‘sequestered’ and ‘sequestration’ mean the 
separation, isolation, or removal of greenhouse gases 
from the atmosphere, as determined by the Adminis-
trator. Such terms include biological, geologic, and 
mineral methods of separation, isolation, and re-
moval, but do not include ocean fertilization tech-
niques. 
‘‘(26) TON.—The term ‘ton’ means a metric 
ton. 
‘‘(27) VINTAGE YEAR.—The term ‘vintage year’ 
means the calendar year for which an emission al-
lowance is established under— 
‘‘(A) section 715; or 
‘‘(B) with respect to the establishment of 
the cost containment reserve, section 720. 
‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOAL. 
‘‘It is the national goal for the United States— 
‘‘(1) to achieve net-zero greenhouse gas emis-
sions by not later than 2050; and 
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‘‘(2) for each year thereafter— 
‘‘(A) to maintain net-zero greenhouse gas 
emissions; and 
‘‘(B) seek to achieve net-negative green-
house gas emissions as determined necessary by 
a scientific assessment conducted by the Admin-
istrator. 
‘‘SEC. 703. LABOR STANDARDS. 
‘‘The Administrator shall take such action as may be 
necessary to ensure that all laborers and mechanics em-
ployed by contractors or subcontractors on projects as-
sisted pursuant to this title, including projects funded in 
whole or in part by the proceeds from the sale of emission 
allowances or by financial incentives provided using such 
proceeds, shall be paid wages at rates not less than those 
prevailing for the same type of work on similar construc-
tion in the locality as determined by the Secretary of 
Labor, in accordance with subchapter IV of chapter 31 
of title 40, United States Code. The Secretary of Labor 
shall have, with respect to the labor standards specified 
in this section, the authority and functions set forth in 
Reorganization Plan No. 14 of 1950 (64 Stat. 1267; 5 
U.S.C. App.) and section 3145 of title 40, United States 
Code. 
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‘‘SEC. 704. REGULATIONS. 
‘‘Except as otherwise provided in this title, the Ad-
ministrator shall promulgate final regulations to carry out 
this title not later than 24 months after the date of enact-
ment of this title. 
‘‘PART B—POLLUTION LIMITATION AND 
PHASEDOWN FROM COVERED ENTITIES 
‘‘SEC. 711. AGGREGATE ENFORCEABLE TARGETS FOR COV-
ERED ENTITIES. 
‘‘(a) IN GENERAL.—The Administrator shall, by rule, 
establish targets that are enforceable under this title for 
the aggregate quantity of greenhouse gas emissions of cov-
ered entities for each calendar year beginning in 2027 
such that— 
‘‘(1) in 2027, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities is at least 
5 percent below the average annual aggregate quan-
tity of greenhouse gas emissions in 2023, 2024, and 
2025 from equivalent entities described in subsection 
(d)(1); 
‘‘(2) in 2030, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities does not 
exceed 50 percent of the aggregate quantity of 
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greenhouse gas emissions in 2005 from equivalent 
entities described in subsection (d)(2); 
‘‘(3) in 2040, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities does not 
exceed 30 percent of the aggregate quantity of 
greenhouse gas emissions in 2005 from equivalent 
entities described in subsection (d)(2); and 
‘‘(4) in 2050, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities does not 
exceed 10 percent of the aggregate quantity of 
greenhouse gas emissions in 2005 from equivalent 
entities described in subsection (d)(2). 
‘‘(b) ANNUAL REDUCTIONS.—Beginning with 2028, 
the Administrator shall, by rule, require the aggregate 
quantity of greenhouse gas emissions from covered entities 
to decline on an annual basis, by at least 2 percent of 
the aggregate quantity of greenhouse gas emissions in 
2005 from equivalent entities described in subsection 
(d)(2), until annual greenhouse gas emissions from cov-
ered entities do not exceed 10 percent of the aggregate 
quantity of greenhouse gas emissions in 2005 from equiva-
lent entities described in subsection (d)(2). Upon achiev-
ing such an annual aggregate quantity, the Administrator 
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shall ensure that any future annual quantity of green-
house gas emissions from covered entities does not exceed 
the annual aggregate quantity of greenhouse gas emis-
sions from covered entities in the preceding year. 
‘‘(c) ADDITION OF COVERED ENTITIES OR GREEN-
HOUSE GASES, OR CHANGE IN EXCHANGE VALUES.—The 
quantities calculated pursuant to subsections (a) and (b) 
may not be revised to reflect— 
‘‘(1) an entity becoming or ceasing to be a cov-
ered entity after the date of the establishment of 
targets pursuant to subsection (a); 
‘‘(2) the designation of a gas as a greenhouse 
gas pursuant to section 712 after such date; or 
‘‘(3) the revision of the carbon dioxide equiva-
lent value of any greenhouse gas pursuant to section 
713 after such date. 
‘‘(d) EQUIVALENT ENTITIES DESCRIBED.—An entity 
is an equivalent entity described in this subsection if— 
‘‘(1) for purposes of subsection (a)(1), the enti-
ty would have been a covered entity in 2023, 2024, 
or 2025, if— 
‘‘(A) the definition of a covered entity in 
section 701 had been in effect for the respective 
year; and 
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‘‘(B) the references in such definition to 
2025 were references to 2023; and 
‘‘(2) for purposes of paragraphs (2) through (4) 
of subsection (a), an entity that would have been a 
covered entity in 2005, if— 
‘‘(A) the definition of a covered entity in 
section 701 had been in effect for the respective 
year; and 
‘‘(B) the references in such definition to 
2025 were references to 2005. 
‘‘SEC. 712. DESIGNATION OF GREENHOUSE GASES. 
‘‘(a) GREENHOUSE GASES.—For purposes of this 
title, the following are greenhouse gases: 
‘‘(1) Carbon dioxide. 
‘‘(2) Methane. 
‘‘(3) Nitrous oxide. 
‘‘(4) Sulfur hexafluoride. 
‘‘(5) Any hydrofluorocarbon. 
‘‘(6) Any perfluorocarbon. 
‘‘(7) Nitrogen trifluoride. 
‘‘(8) Any other anthropogenic gas designated as 
a greenhouse gas by the Administrator under sub-
section (b). 
‘‘(b) DETERMINATION OF ADDITIONAL GREENHOUSE 
GASES.—The Administrator, by rule— 
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‘‘(1) may determine whether 1 ton of an an-
thropogenic gas makes the same or greater contribu-
tion to global warming over 100 years as 1 ton of 
carbon dioxide; 
‘‘(2) shall publish, in accordance with section 
713, the carbon dioxide equivalent value for each gas 
with respect to which the Administrator makes an 
affirmative determination under paragraph (1); 
‘‘(3) may for each gas with respect to which the 
Administrator makes an affirmative determination 
under paragraph (1) and that is used as a substitute 
for a class I or class II substance pursuant to title 
VI of this Act, determine the extent to which to reg-
ulate that gas pursuant to title VI of this Act; and 
‘‘(4) may designate as a greenhouse gas for 
purposes of this title each gas for which the Admin-
istrator makes an affirmative determination under 
paragraph (1), to the extent that it is not regulated 
pursuant to title VI or section 103 of the Consoli-
dated Appropriations Act, 2021. 
‘‘SEC. 713. CARBON DIOXIDE EQUIVALENT VALUE OF 
GREENHOUSE GASES. 
‘‘(a) MEASURE
OF QUANTITY
OF GREENHOUSE 
GASES.—Any provision of this title that refers to a quan-
tity or percentage of a quantity of a greenhouse gas means 
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the quantity or percentage of the greenhouse gas ex-
pressed in carbon dioxide equivalent. 
‘‘(b) INITIAL VALUE.—Except as revised by the Ad-
ministrator pursuant to subsection (c), the carbon dioxide 
equivalent value for purposes of this title for any green-
house gas shall be the 100-year Global Warming Potential 
for the greenhouse gas provided in the most recent assess-
ment report from the Intergovernmental Panel on Climate 
Change as of the date of enactment of this title. 
‘‘(c) PERIODIC REVISION.— 
‘‘(1) REVISION AND PUBLICATION.—Not later 
than January 1, 2030, and (except as provided in 
paragraph (3)) not less than once every 5 years 
thereafter, the Administrator shall— 
‘‘(A) revise the carbon dioxide equivalent 
value for purposes of this title for any green-
house gas to reflect the 100-year Global Warm-
ing Potential provided in the most recent as-
sessment report from the Intergovernmental 
Panel on Climate Change (or any successor or-
ganization); and 
‘‘(B) publish in the Federal Register any 
such revision. 
‘‘(2) EFFECTIVE DATE OF REVISION.—A revi-
sion published in the Federal Register under para-
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graph (1)(B) shall take effect for greenhouse gas 
emissions on January 1 of the first calendar year 
that begins at least 9 months after the date on 
which the revision was published. 
‘‘(3) DECREASE IN FREQUENCY.—The Adminis-
trator may decrease the frequency of revision under 
paragraph (1) if the Administrator determines that 
such decrease is appropriate in order to synchronize 
such revision with any similar revision process car-
ried out pursuant to the United Nations Framework 
Convention on Climate Change or to an agreement 
negotiated under that convention. 
‘‘SEC. 714. GREENHOUSE GAS REGISTRY FOR MONITORING 
AND REPORTING. 
‘‘(a) REPORTING ENTITY.—In this section, the term 
‘reporting entity’ means an entity that is— 
‘‘(1) a covered entity; 
‘‘(2) an entity that is required to report under 
part 98 of title 40, Code of Federal Regulations (or 
any successor regulations); 
‘‘(3) an entity that receives emission allowances 
under section 723; or 
‘‘(4) any other entity that the Administrator de-
termines to be a reporting entity for purposes of this 
title. 
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‘‘(b) REGULATIONS.— 
‘‘(1) IN GENERAL.—Not later than 6 months 
after the date of enactment of this title, the Admin-
istrator shall issue regulations establishing a Federal 
greenhouse gas registry. 
‘‘(2) REPORTING.—Except as provided in para-
graphs (3) and (4), such regulations— 
‘‘(A) shall require reporting entities to re-
port to the Administrator consistent with part 
98 of title 40, Code of Federal Regulations (or 
any successor regulations); 
‘‘(B) may include reporting requirements 
that are additional to the requirements under 
such part 98 of title 40, Code of Federal Regu-
lations (or any successor regulations), as deter-
mined appropriate by the Administrator to im-
plement this title; and 
‘‘(C) shall ensure the completeness, con-
sistency, transparency, accuracy, precision, and 
reliability of data included in the Federal green-
house gas registry. 
‘‘(3) TIMING.—For calendar year 2027 and 
each subsequent calendar year, each reporting entity 
shall submit annually data required under this sec-
tion to the Administrator not later than 60 days 
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after the end of the applicable calendar year, except 
when the data is already being reported to the Ad-
ministrator on an earlier timeframe. 
‘‘(4) WAIVER OF REPORTING REQUIREMENTS.— 
The Administrator may waive reporting require-
ments under this section for specific entities to the 
extent that the Administrator determines that suffi-
cient and equally or more reliable, verified, and time-
ly data are available to the Administrator and the 
public on the internet under other mandatory, statu-
tory Federal requirements. 
‘‘SEC. 715. EMISSION ALLOWANCES. 
‘‘(a) IN GENERAL.—The Administrator shall estab-
lish a quantity of emission allowances for each calendar 
year starting in 2027 as necessary to achieve the targets 
under section 711(a) and the reductions under section 
711(b). 
‘‘(b) IDENTIFICATION
NUMBERS.—The Adminis-
trator shall assign to each emission allowance established 
under subsection (a) a unique identification number that 
includes the vintage year for that emission allowance. 
‘‘(c) EMISSION ALLOWANCES FOR EACH CALENDAR 
YEAR.— 
‘‘(1) COMPLIANCE PERIODS 1 AND 2.—Not later 
than January 1, 2027, the Administrator shall es-
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tablish the quantity of emission allowances for each 
year in compliance period 1 and compliance period 
2. 
‘‘(2) FOLLOWING TWO COMPLIANCE PERIODS.— 
Not later than July 1, 2032, and every 6 years 
thereafter, the Administrator shall establish the 
quantity of emission allowances for each calendar 
year of the following two compliance periods. When 
establishing the quantity of emission allowances 
under this paragraph for a calendar year, the Ad-
ministrator shall, consistent with subsection (a), con-
sider— 
‘‘(A) the economy-wide reduction goal es-
tablished by section 702; 
‘‘(B) the total number of emission allow-
ances in circulation, as required to be published 
by subsection 716(e); and 
‘‘(C) other factors determined appropriate 
by the Administrator to support the effective 
implementation of this title, including the goal 
established by section 702. 
‘‘(3) FAILURE TO SET EMISSION ALLOWANCE 
QUANTITY.—If the Administrator fails to establish 
the quantity of emission allowances for a compliance 
period by the start of the first calendar year of the 
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compliance period, the quantity of emission allow-
ances established for each calendar year of such 
compliance period shall be the amount equal to— 
‘‘(A) the quantity of emission allowances 
established for the preceding calendar year; 
minus 
‘‘(B) the quantity of emission allowances 
that is equal to 3.5 percent of the aggregate 
quantity of greenhouse gas emissions in 2005. 
‘‘SEC. 716. PROHIBITION OF EXCESS GREENHOUSE GAS 
EMISSIONS. 
‘‘(a) PROHIBITION.—Effective January 1, 2027, a 
covered entity may not emit greenhouse gas emissions and 
have attributable greenhouse gas emissions, in combina-
tion, in excess of the quantity of greenhouse gas emissions 
represented by the number of emission allowances surren-
dered by the covered entity pursuant to subsection (b)(3) 
for the compliance period. 
‘‘(b) DEMONSTRATING
COMPLIANCE.—Except as 
otherwise provided in this section, a covered entity shall 
surrender to the Administrator for retirement— 
‘‘(1) by 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection 
(h)) of the second year of a compliance period, not 
less than the number of emission allowances needed 
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to represent 50 percent of the total quantity of 
greenhouse gas emissions and attributable green-
house gas emissions, in combination, of the covered 
entity during the first year of the compliance period; 
‘‘(2) by 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection 
(h)) of the third year of a compliance period, not 
less than the number of emission allowances (includ-
ing those surrendered pursuant to paragraph (1) for 
the compliance period) needed to represent 50 per-
cent of the total quantity of greenhouse gas emis-
sions and attributable greenhouse gas emissions, in 
combination, of the covered entity during the first 2 
years of the compliance period; and 
‘‘(3) by 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection 
(h)) of the year following a compliance period, not 
less than the number of emission allowances (includ-
ing those surrendered pursuant to paragraphs (1) 
and (2) for the compliance period) needed to rep-
resent 100 percent of the total quantity of green-
house gas emissions and attributable greenhouse gas 
emissions, in combination, of the covered entity dur-
ing the full compliance period. 
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‘‘(c) APPLICATION TO FRACTIONS OF TONS.—For 
purposes of this section, any amount less than 1 ton of 
carbon dioxide equivalent of greenhouse gas emissions or 
attributable greenhouse gas emissions shall be treated as 
1 ton of such carbon dioxide equivalent. 
‘‘(d) RETIREMENT OF EMISSION ALLOWANCES.—As 
soon as practicable after each deadline established under 
subsection (b), the Administrator shall retire the quantity 
of emission allowances surrendered by covered entities 
pursuant to subsection (b)(3) for the compliance period. 
‘‘(e) TOTAL NUMBER OF ALLOWANCES IN CIRCULA-
TION.—As soon as practicable after the deadline described 
in subsection (b)(3), the Administrator shall publish an 
estimate of the total quantity of emission allowances held 
by all persons on the day after such deadline. 
‘‘(f) DESIGNATED REPRESENTATIVES.—The final 
regulations promulgated under section 703 shall require 
that each covered entity, and each entity holding emission 
allowances or receiving emission allowances from the Ad-
ministrator under this title, submit to the Administrator 
a certificate of representation designating a designated 
representative. 
‘‘(g) EDUCATION
AND OUTREACH.—The Adminis-
trator shall establish and carry out a program of education 
and outreach to assist covered entities in meeting the re-
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quirements of this title. Such program shall include edu-
cation with respect to using markets to effectively meet 
such requirements. 
‘‘(h) ADJUSTMENT
OF DEADLINE.—The Adminis-
trator may, by rule, establish a deadline for demonstrating 
compliance in accordance with subsection (b) later than 
the date otherwise provided in subsection (b), as necessary 
to ensure the availability of greenhouse gas emissions 
data, but in no event shall the deadline be later than June 
1 of the respective calendar year. 
‘‘SEC. 717. PENALTY FOR NONCOMPLIANCE. 
‘‘(a) EXCESS GREENHOUSE GAS EMISSIONS PEN-
ALTY.— 
‘‘(1) IN GENERAL.—A covered entity that fails 
for any year to demonstrate compliance as required 
by section 716 by the applicable deadline shall be 
liable for payment to the Administrator of a civil 
penalty in the amount described in paragraph (2). 
‘‘(2) AMOUNT.—The amount of a penalty re-
quired to be paid under paragraph (1) shall be equal 
to the product obtained by multiplying— 
‘‘(A) the number of tons of carbon dioxide 
equivalent of greenhouse gas emissions and at-
tributable greenhouse gas emissions for which 
the covered entity failed to demonstrate compli-
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ance as required by section 716 by the applica-
ble deadline; by 
‘‘(B) 3 times the auction clearing price for 
the earliest vintage year emission allowances in 
the last auction carried out pursuant to section 
720 before such deadline. 
‘‘(3) TIMING.—A penalty under this subsection 
shall be immediately due and payable to the Admin-
istrator, without demand. 
‘‘(4) NO EFFECT ON LIABILITY.—A penalty due 
and payable by a covered entity under this sub-
section may not diminish the liability of the covered 
entity for any fine, penalty, or assessment against 
the covered entity for the same violation under any 
other provision of this Act or any other law. 
‘‘(b) EXCESS EMISSIONS ALLOWANCES.—A covered 
entity that fails to demonstrate compliance for any year, 
as described in subsection (a)(1), shall be liable to offset 
the covered entity’s excess greenhouse gases emissions and 
attributable greenhouse gas emissions by an equal quan-
tity of emission allowances during the year after the year 
in which such failure to demonstrate compliance occurred. 
‘‘(c) TREATMENT
AS SEPARATE VIOLATION.—For 
purposes of this section, each ton of carbon dioxide equiva-
lent for which a covered entity fails to demonstrate compli-
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ance as required by section 716 shall be treated as a sepa-
rate violation. 
‘‘SEC. 718. TRACKING SYSTEM. 
‘‘The final regulations promulgated under section 
703 shall include a system for issuing, recording, holding, 
and tracking emission allowances. Such system shall pro-
vide for appropriate publication of the information in the 
system on the internet. 
‘‘SEC. 719. PROGRAM FLEXIBILITY. 
‘‘(a) PERMITTED TRANSACTIONS.—Except as other-
wise provided in this title, the lawful holder of an emission 
allowance may— 
‘‘(1) without restriction, sell, exchange, or 
transfer the emission allowance; 
‘‘(2) subject to subsection (c), hold the emission 
allowance; and 
‘‘(3) request that the Administrator retire the 
emission allowance. 
‘‘(b) BANKING.—An emission allowance may be used 
to comply with section 716 for emissions in— 
‘‘(1) the vintage year for the emission allow-
ance; or 
‘‘(2) any calendar year subsequent to the vin-
tage year for the emission allowance. 
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‘‘(c) HOLDING LIMIT.—Beginning after compliance 
period 1, a covered entity may retain emission allowances 
issued for vintage years in previous compliance periods 
representing no more than 100 percent of the total quan-
tity of greenhouse gas emissions and attributable green-
house gas emissions, in combination, of the covered entity 
during the preceding compliance period. 
‘‘(d) NO RESTRICTION
ON TRANSACTIONS.—The 
privilege of purchasing, holding, selling, exchanging, 
transferring, and requesting retirement of emission allow-
ances may not be restricted to covered entities, except as 
otherwise provided in this title. 
‘‘SEC. 720. AUCTION PROCEDURES. 
‘‘(a) IN GENERAL.—For each calendar year for which 
the Administrator establishes emission allowances under 
section 715, the Administrator shall auction emission al-
lowances in accordance with the following: 
‘‘(1) FREQUENCY; FIRST
AUCTION.—Auctions 
shall be conducted quarterly, with the first auction 
to be conducted not later than March 31, 2027. 
‘‘(2) AUCTION SCHEDULE; CURRENT AND FU-
TURE VINTAGES.—The Administrator— 
‘‘(A) at each quarterly auction under this 
section, shall offer both a portion of the emis-
sion allowances for the same vintage year as the 
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‘‘(4) ALLOWANCES NOT PURCHASED.—At the 
end of each calendar year, any emission allowance in 
the emissions containment reserve offered but not 
purchased at auction may be deposited into the cost 
containment 
reserve 
pursuant 
to 
subsection 
(d)(2)(B). 
‘‘(f) PUBLIC AUCTION INFORMATION.—Prior to the 
first auction under this section each calendar year, the Ad-
ministrator shall publish the following: 
‘‘(1) The minimum price for an emission allow-
ance for such calendar year under subsection (c). 
‘‘(2) The number of emission allowances of each 
vintage year to be offered at each auction in such 
calendar year. 
‘‘(3) The number and dollar amounts of the 
price triggers for such calendar year for the cost 
containment reserve established under subsection 
(d). 
‘‘(4) The number and dollar amounts of the 
price triggers for such calendar year for the emis-
sions containment reserve established under sub-
section (e). 
‘‘(5) Any additional information determined to 
be appropriate by the Administrator. 
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‘‘(g) DELEGATION
OR CONTRACT.—The Adminis-
trator may by delegation or contract provide for the con-
duct of auctions under this section under the Administra-
tor’s supervision— 
‘‘(1) by other departments or agencies of the 
Federal Government; or 
‘‘(2) by nongovernmental agencies, groups, or 
organizations. 
‘‘SEC. 721. CONSIGNMENT AUCTIONS. 
‘‘(a) VOLUNTARY CONSIGNMENT.—Any entity hold-
ing emission allowances may request that the Adminis-
trator make available for auction under section 720 the 
emission allowances on consignment. 
‘‘(b) MANDATORY CONSIGNMENT.— 
‘‘(1) CONDITIONAL ALLOCATIONS.—Before any 
emission allowance allocated under subsection (a) or 
(b) of section 722 (including any emission allowance 
transferred to a covered entity pursuant to section 
722(a)(3)(B) or section 722(a)(6)(B)(ii)) may be 
sold, further transferred, retired, or used to dem-
onstrate compliance under section 716, such emis-
sion allowance shall be made available for auction on 
consignment pursuant to this section and section 
720. 
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