Is there a plastic exemption in the Energy Innovation Act?

Is there a plastic exemption in the Energy Innovation Act? I hope not…..

16 Replies

Hi @Elaine Salinger. The answer is basically yes. The Energy Innovation Act exempts a source of carbon dioxide from the fee if it's captured and sequestered or utilized, such that it doesn't enter the atmosphere. Plastics are an example of a fossil fuel use that utilizes the carbon, since it remains stored in the plastic material. The bill notes that the government:

shall establish regulations providing for the methods and processes by which qualified carbon dioxide may be utilized so as to exclude that qualified carbon dioxide safely and permanently from the atmosphere. Utilization may include the production of substances such as but not limited to plastics and chemicals. Such regulations shall minimize the escape or further emission of the qualified carbon dioxide into the atmosphere.

Basically, plastic is an environmental problem but not a climate problem, so it needs to be addressed in separate legislation.

Scott Endler
172 Posts

Where is the Carbon fee assessed? How would crude oil that was originally assessed a fee, be reimbursed for a tally of a downstream fraction that was processed into a plastic. Or a fraction of coking coal that was taken up by the Iron in a steel making process. Aren't we overcomplicating it? Carbon out of the ground, is Carbon out of the ground. what makes it into the air is only one of many concerns. We should be working toward restraining all of the wasteful aspects our Carbon consumption. Save some for later. They are going to need it to grow food with (mined Phosphorous and Potassium and Haber-Bosch Nitrogen) for 10 billion people.

Hi @Scott Endler. The carbon fee is applied when the fossil fuel is extracted from the well or mine or crosses the border, but can be refunded if the carbon is demonstrated to have been captured and sequestered or utilized as in this example.

Jeff Green
61 Posts
UN Development Programme:,Plastics%20result%20in%20greenhouse%20gas%20emissions%20at%20every%20stage%20of,or%20leakage%20into%20the%20environment 

"The plastics industry is actually the fastest-growing source of industrial greenhouse gases in the world. The UN Environment Programme estimates that the greenhouse gas emissions from plastic production, use and disposal could account for 19 percent of the total global carbon budget by 2040." "Plastics result in greenhouse gas emissions at every stage of their lifecycle – from the extraction and transport of fossil fuels to energy- and emissions-intensive refining processes to plastic waste management or leakage into the environment. In 2019, plastic production and incineration resulted in greenhouse gas emissions equal to the emissions from 189 five hundred-megawatt coal power plants.  Quite simply, emissions from the plastic lifecycle threaten our ability to meet global climate targets."

Hi @Jeff Green. Those processes that create climate pollution that ends up in the atmosphere wouldn't qualify for the exemption. Only the carbon that remains embodied in the product would qualify.

Scott Endler
172 Posts

These carve outs get very fuzzy and overcomplicated. Every lumber company will want some kind of refund or trade payment.

Jeff Green
61 Posts

@Dana Nuccitelli

Unfortunately, the GHGs don't remain embedded in the plastic.  For example: “Production of methane and ethylene from plastic in the environment.”  “we show that the most commonly used plastics produce two greenhouse gases, methane and ethylene, when exposed to ambient solar radiation. Polyethylene, which is the most produced and discarded synthetic polymer globally, is the most prolific emitter of both gases. We demonstrate that the production of trace gases from virgin low- density polyethylene increase with time, with rates at the end of a 212-day incubation of 5.8 nmol g-1 d-1 of methane, 14.5 nmol g-1 d-1 of ethylene, 3.9 nmol g-1 d-1 of ethane and 9.7 nmol g-1 d-1 of propylene. Environmentally aged plastics incubated in water for at least 152 days also produced hydrocarbon gases. In addition, low-density polyethylene emits these gases when incubated in air at rates ~2 times and ~76 times higher than when incubated in water for methane and ethylene, respectively. Our results show that plastics represent a heretofore unrecognized source of climate-relevant trace gases that are expected to increase as more plastic is produced and accumulated in the environment.”   


Tony Sirna
759 Posts

@Jeff Green - That paper also says “Based on the rates measured in this study and the amount of plastic produced worldwide CH4 production by plastics is likely to be an insignificant component of the global CH4 budget.” So, while plastics do produce GHGs while breaking down, that process does not seem to be a significant source of GHGs.

Also, I 100% agree with everything Dana said, but I would express it as “No. There is no specific exemption for plastics in the Energy Innovation Act. There is a general exemption for all products that use petroleum, natural gas, or other fossil carbon as a feedstock as long as the carbon in those products is not emitted as a GHG during their lifecycle. This could include plastics, pharmaceuticals, carbon fibers, waxes, lubricants, etc."

You might also want to see our Handling Challenging Questions document which contains this.


The vast majority of oil used globally is burned. Only 4% is used to produce plastics and another 9% for chemicals and other purposes (carbon fibers, asphalt, petroleum jelly, etc.). For uses of fossil fuels that will not result in greenhouse gas emissions, any carbon fees put on that unburned feedstock would be refunded to the manufacturer of the non-emitting product. Any fossil-based energy used or fuel combusted in the manufacturing process would not receive a refund.

For the most part, fossil fuel-based carbon in plastic does not turn into greenhouse gases, unless the plastic is incinerated.

What you might say

Consider asking a question to find out more about their underlying concern.

While there are many people concerned about the impacts from the production, use, and disposal of plastics and other petrochemicals, this policy is focused only on the climate impacts from fossil fuels. All greenhouse gas emissions from burning fossil fuels would be subject to the fee.

Other environmental impacts can be addressed through other policies.



Jeff Green
61 Posts

@Tony Sirna

It seems that research has produced a number of findings:

  • The production of plastics results in creation/leakage of GHGs from beginning to end;
  • Plastics, when discarded, produce GHGs as they degrade/decompose;
  • Further, we know that plastics are the fossil fuel industry's “plan B” as it is forced to reduce the burning of its primary products.

In sum, plastics don't deserve an exemption based on the science.  The real answer is that this is a political process, and the EICDA represents a compromise.  Nothing wrong with that, but we need to plan on going after plastics for both their environmental and climate impacts.

Tony Sirna
759 Posts

@Jeff Green

CCL is focused on policies that will drive net GHG emissions to zero and lead to a stable and healthy climate. That includes eliminating GHG emissions from fossil fuel production and use, whether that is to produce plastics or other products. A carbon price should drive us towards that elimination in GHGs from the production of plastics and all other products.

Plastics, when discarded produce small amounts of GHGs. That is likely not the biggest problem with discarded plastics and not a major source of GHGs. In my persoanl opinion, plastic pollution is an important issue that needs to be addressed, but it is not CCL's focus and it is best for us to leave other organizations to focus on those issues. 

CCL's focus is on GHGs. It is not on eliminating the extraction of hydro-carbons for any purpose, or to eliminate the "fossil fuel industry". If there are non-GHG-emitting uses of fossil hydro-carbons that the industry continues  to pursue, that is generally outside the scope of the climate mitigation we are focused on. It would still be best to have policies that reduce pollution from hydro-carbon extraction and from the waste from any products created, but a price on carbon emissions is not the way to address those problems. 

Carbon Fee and Dividend is intended to tax GHG emissions from fossil fuels, not to tax any fossil hydro-carbon extracted from the ground. Fees are assessed upstream for simplicity's sake. Refunding the carbon fee for non-emitting uses of fossil hydro carbons is not an exemption or a compromise but a reflection of the original intent of the policy. 

Ron Reilly
70 Posts

@Tony Sirna
Appreciate the discussion on this thread. To clarify…Since a plastic manufacturer uses a certain amount of FF, in a life cycle analysis, that would include FF used in extraction and transport, and in refining and manufacturing, does the EIA exception include this lead up FF,  or is the EIA exemption for only the amount of carbon that is sequestered within the final out-the-door plastic itself?  

@Ron Reilly, the bill provides for a refund (not the same as exemption) of previously paid carbon fees for the carbon in the plastic. The bill text is not specific, but CCL's advice is to pay this refund to the final producer of the plastic item, assuming it remains sequestered in the object. 

Although it's a little tricky to find in the bill, the carbon fee should also be imposed on plastic waste that is burned for energy. This is supported by language in Sections 9901(f)(4) and 9901(j), where plastic is a “petroleum product” that is used so as to “emit a greenhouse gas to the atmosphere.”

Despite the current widespread concern about “plastic," that concern is really about single-use plastic such as bags, straws, packaging, etc. that finds its way into the biosphere. Most polymers are embedded in relatively permanent objects such as furniture, textiles, computers, building materials, vehicles, etc. The question of single-use plastics contaminating the environment should be addressed separately, by – for example – imposing a rising tax on those products.

As for GHG emissions from degradation of plastics, I thought one of the objections to plastics in the environment is largely that they don't degrade – isn't that why critics argue in favor of biodegradable substitutes? In fact, as Tony notes, GHG emissions from plastic degradation is very, very slow and thus those emissions are essentially insignificant compared to those from other sources.  

So I think the approach spelled out in the Energy Innovation Act for dealing with fossil-based plastics is well-balanced and rational from a climate perspective. 

Lisa Danz
211 Posts

@Richard Knight

I used to agree that single-use plastics were the problem and that long-term-use plastics were fine.  And I still agree that single-use plastics are a bigger problem.

However, I've started to realize that even long-term-use plastics worsen the impact of climate change on health.  That's because, when there are wildfires (which of course have increased due to climate change), the plastics in the homes that burn down make the smoke more gross-smelling and more harmful.  (

While I certainly hope to never have my home burn down, realizing this problem makes me think twice about even introducing long-term use plastics into my home.  (I'm not perfect; I use plastic every day and don't plan to stop using the plastic things that I already have.  But I've been slowly finding ways to avoid introducing new plastics into my home when I can.)

Since only a small percentage of plastic burns in home fires, trying to calculate that percentage and discount it when calculating the refund would mostly likely result in a negligible change that wouldn't be worth the effort.  So, I think you'd have to calculate it another way if you wanted to account for the harm to health and the public nuisance of plastic smoke.  If it's out of scope for the Energy Innovation Act, so be it, but I think there's an argument to be made that activities that worsen the health impacts of climate change are not entirely out of scope for climate mitigation overall.

This is a tough problem, because virtually everything in our homes today qualifies at least partially as "plastic" -- meaning polymer substances -- right down to the paint on the wall. Anything made of wood is coated with a polymer coating. Carpeting, most clothing, plumbing, the innards of appliances, etc. are largely made from PVC, nylon, other polymers. The reason they are so widely used is that they don't rot, they don't corrode, they are lighter and/or stronger than alternatives, bugs don't want to eat them, and they don't conduct electricity. The reason they even exist is that the alternatives are mostly worse. Glass, steel, aluminum, cement, ceramics, copper -- all have huge carbon footprints, are very heavy to transport, and subject to corrosion. Wood is great stuff, but it burns too readily (although "engineered wood" is great and less flammable than normal wood, but -- it requires polymers to bind it together!). Paper has very limited uses and is highly flammable. What am I missing? 
I hear your concerns and I am open to ideas, but I think we're kind of stuck.

@Lisa Danz, another item I just came across (working my way through a pile of magazines) talks about what the EPA is trying to do on plastic waste. Naturally, environmental groups say EPA is not doing enough, and industry lobbyists don't want them to do anything at all. 

Unfortunately, EPA officials concede that it will take a long time for a final regulation to emerge. But it's good to have a handle on what they are trying to do and the multiple lines of attack they have to contend with.

John Gage
144 Posts

@Dana Nuccitelli  what if the plastic is burned to generate energy, as I've heard happens in the “Advanced Recycling” process?  Thanks, John
 @Richard Knight 

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