Republicans Let ‘Carbon Tax Framework’ Slip Through Funding Bill, Opponents Warn

A directive buried in January “minibus” materials is the first step toward carbon taxes or tariffs, several energy policy experts told the Daily Caller News Foundation.

The Jan. 15. energy and environment bill package included a Senate Appropriations Committee’s bill report, which directs the Department of Energy (DOE) to review the carbon intensity of U.S.-produced goods and compare those emissions with similar products made abroad, including aluminum, cement, steel, plastics and crude oil.

Opponents of the initiative told the DCNF that the review could eventually punish companies for energy use and serves as a gateway for carbon taxes and tariffs. They argue the review effectively instructs the government to set a price for carbon emissions but doesn’t clearly limit how the government could use that price later.

Though not legally binding, federal agencies tend to comply with a report’s directives, according to the Congressional Research Service. It is not clear who placed the directive into the report, E&E News reported. The DCNF reached out to every Republican on the Senate Appropriations Committee to determine who added the language, but received no responses.

“This Senate Appropriations report quietly resurrects carbon accounting as federal policy, giving legitimacy to the same ESG [environmental, social and governance] framework driving Europe’s carbon border taxes,” Jason Isaac, CEO of the American Energy Institute, told the DCNF. “Once Washington starts ranking U.S. products by ’emissions intensity,’ those metrics inevitably become regulatory and trade weapons, regardless of intent. That approach contradicts the administration’s effort to unwind the Endangerment Finding and the greenhouse gas reporting regime. America should be dismantling ESG, not laundering it through appropriations language written for Brussels, not U.S. consumers.”

The DOE did not respond to the DCNF’s multiple requests for comment.

The European Union recently enacted an import tax on Jan. 1 that adjusts tariffs based on the amount of carbon dioxide emitted when producing certain goods known as the Carbon Border Adjustment Mechanism (CBAM).

The report acknowledges recent EU trade policies like CBAM, then states that “accordingly, the Committee directs NETL, in consultation with relevant agencies, institutions, academia, and think tank partners as necessary, to conduct a study to determine the average product emissions intensity of certain goods produced in the U.S. compared to those produced in other countries.”

The report’s language is notably similar to the Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act, which was introduced in 2023 and again in 2024 but never enacted by Congress. Democratic Sen. Chris Coons of Delaware, Republican Sen. Kevin Cramer of North Dakota and Republican Sen. John Curtis of Utah previously introduced the PROVE It Act.

Eighty-two Senators voted in favor of the minibus package and President Donald Trump signed it into law, Cramer told the DCNF, arguing that “the proof is in the results, not how someone else feels about them” when asked about critics’ opinions on the directive.

“I represent an energy-producing state and my constituents are neither dumb nor uninformed enough to think PROVE IT makes U.S. taxpayers pay for the EU’s carbon tariffs. Europe is already putting a tariff on us with its one-sided CBAM, this report helps us defend against it,” Cramer told the DCNF in response to a question on how he might address constituents’ concerns. “I don’t know any Republicans who are in favor of a carbon tax, which is why we need this program.” 

Proponents of the bill and the emissions review often argue that the U.S. needs verifiable manufacturing emissions data to reward cleaner producers and shield businesses from European import taxes based on purportedly less reliable figures.

Dozens of energy policy and advocacy groups urged Congress to oppose the PROVE IT Act, the DCNF previously reported. Signatories on a letter warning Congress about the bill included Isaac, Bakst and The Heartland Institute.

“Language buried in a report accompanying the energy spending bill would require a study comparable to what was required under the PROVE IT Act,” Director of the Conservative Enterprise Institute’s (CEI) Center for Energy and Environment Daren Bakst told the DCNF. “The lawmakers that took such an action must have properly recognized that the only way to push their global climate agenda and undermine the Trump administration agenda is to sneak it into some report.”

Coons and Curtis did not respond to the DCNF’s requests for comment.

Bakst noted that the Trump administration has worked to distance the U.S. from global climate initiatives it believes are contrary to America’s best interest and that it recently bucked against the United Nation’s global maritime carbon tax successfully.

“Yet there are apparently some lawmakers, including some Republicans, who don’t want to fight the European-led export of global climate regulation, they want to be a part of it,” Bakst told the DCNF. “They don’t want to fight Europe from taxing American companies through their sweeping new carbon border tax, which is broader than a shipping tax, they want to follow the lead of Europe and join their carbon club by helping to set the framework for our own carbon border tax.”

Sterling Burnett, the director of the environmental sector at The Heartland Institute, told the DCNF that “as evidenced by statements and proposals in the past related to similar earlier proposals, this is a wolf in sheep’s clothing, setting the United States up for imposing carbon tariffs which are nothing more nor less than a carbon tax on consumers. This provision pleased and garnered support from RINO’s who have no understanding of economics and have long cuddled up to the climate alarmists in the Democratic party.”

Notably, some of the most aggressive Democrat lawmakers on climate issues supported the PROVE It Act, with Rhode Island Sen. Sheldon Whitehouse signing on as a co-sponsor.

DOE Secretary Chris Wright “has [the] responsibility to exercise oversight, and to make it clear that a carbon tax or tariff based on this report, would be a mistake and is not supported by the administration,” Burnett told the DCNF.