America's Clean Future Fund Act
America's Clean Future Fund Act would create a new, independent Climate Change Finance Corporation (C2FC) charged with financing clean energy, climate resilience, and decarbonization efforts. The agency would issue grants and loan guarantees, fund research and deployment of new technologies, and focus investments on communities most affected by pollution and economic transitions away from fossil fuels. Separately, the bill would establish a nationwide carbon fee on covered fuels (crude oil, natural gas, coal, and related products) beginning in 2027, with a schedule of escalating rates tied to emissions performance and inflation. The combined approach aims to cut greenhouse gas emissions significantly (a 45% net reduction by 2030 and 100% by 2050 relative to 2018) while channeling funds to disadvantaged communities, supporting workers through the transition, and encouraging private investment in clean tech and resilience. The carbon fee would raise revenue to fund the C2FC and related tools, with protections like wage requirements for labor on funded projects, Buy America rules, and a framework for transparency and public input. The bill also creates mechanisms to adjust the fee over time based on emissions performance, and provides for emissions reporting, periodic reviews, and public updates. In addition, there are provisions for environmental justice prioritization, a structured investment plan, and potential refunds for certain carbon capture, utilization, and sequestration (CCUS) activities. The overall effect would be to shift energy economics toward lower-carbon options while funding deployment, resilience, and transition support, especially in communities most harmed by pollution and energy shifts.
Key Points
- 1Establishment of the Climate Change Finance Corporation (C2FC) to finance clean energy, resilience, and decarbonization projects, with a governance structure including a 7-member Board and dedicated working groups (environmental justice, worker/community transition, and research/innovation) to guide investment plans and grant/loan decisions.
- 2Carbon fee on covered fuels starting in 2027, with a base rate of $75 per ton CO2e in 2027, rising over time (including inflation adjustments) and subject to increases if emissions targets are missed. The rate can be reduced to zero if emissions targets are met and performance thresholds are achieved. The fee applies to use, sale, or transfer of covered fuels, and includes a border adjustment mechanism.
- 3Emissions targets and accountability: annual emissions targets for years 2027 onward, with a schedule that reduces target percentages from 63% of 2018 emissions (for 2027) down to 40% by 2035, then declines by 2 percentage points per year through 2050, and then levels at 10% after 2050. The Administrator (EPA) must report on emissions and determine whether targets were met, with public reporting and a formal review process every two years.
- 4Investment plan and prioritization: the Board, in consultation with the working groups, must develop an investment plan that ensures funding reaches prioritized communities (environmental justice, communities of color, rural and low-income areas, deindustrialized regions, etc.). At least 40% of grant funds must be directed to investments that benefit prioritized communities, with ongoing public input and transparent reporting.
- 5Investment tools and conditions: the C2FC can provide grants and loan guarantees (guarantees cover 75% of the loan balance, with set maximum interest, and borrower charges capped by specific percentages). The mix includes other tools such as warehousing/aggregation credit facilities, zero-interest loans, credit enhancements, and construction financing. There are Buy America requirements for domestic production of iron, steel, and manufactured goods, with certain waivers allowed under specific public-interest or cost-inefficiency conditions.