The Clean Competition Act introduces a comprehensive framework to impose a carbon intensity charge on specific goods, both imported into and produced within the United States. This charge, administered through amendments to the Internal Revenue Code, targets industries with significant greenhouse gas emissions, such as petroleum, chemicals, cement, and steel. The primary goal is to incentivize manufacturers to reduce their carbon footprint and level the playing field for domestic industries that invest in cleaner production methods.

The bill mandates annual reporting of greenhouse gas emissions and electricity usage for eligible domestic facilities to calculate their carbon intensity. For imported goods, carbon intensity is determined using a tiered approach, starting with an economy-wide default based on the country of origin, then potentially using industry-specific data if available and verifiable, or manufacturer-specific data upon petition. The Secretary, in coordination with relevant agencies, is responsible for publishing these carbon intensity determinations and lists of covered goods.

A carbon intensity charge is levied on imported primary and finished goods, and on domestically produced primary goods, if their carbon intensity exceeds a specified baseline. This baseline is adjusted by an "applicable percentage" that decreases over time, and the charge itself is calculated using a rising "cost of pollution." The bill also provides for reductions in the charge for verified carbon removal activities and allows for waivers if foreign countries impose equivalent carbon pricing policies that are not rebated.

To support trade and global decarbonization, the bill includes provisions for rebates on exported goods that have incurred a carbon intensity charge. Furthermore, it empowers the President to negotiate "carbon club" agreements with foreign countries. These agreements require partners to adopt interoperable carbon measurement methodologies, uphold international labor rights, and implement policies that reduce carbon intensity and prevent transshipment, offering benefits like charge waivers for compliant countries.

Beyond the direct charges, the legislation establishes two key investment programs within the Department of Energy. One program offers grants, rebates, or low-interest loans to eligible entities for investments in advanced industrial technology to reduce carbon intensity in existing facilities or ensure best-in-class performance in new ones. The second program uses "contracts for difference" to support the production of low-carbon goods, ensuring price stability for manufacturers investing in cleaner processes.

These investment programs, along with an Economic Support Fund managed by the Department of State for climate and clean energy assistance, are funded by a portion of the revenue generated from the carbon intensity charges. This funding mechanism prioritizes facilitating carbon club negotiations, assisting developing countries, and maximizing global greenhouse gas emissions reductions, thereby linking the revenue from the carbon charge directly to climate action and industrial competitiveness initiatives.