Polluters Pay Climate Fund Act of 2025

This legislation would make the biggest fossil fuel companies pay a large, one-time tax based on how much carbon pollution they caused in the past. The total amount to be collected is $1 trillion. Each company’s share is set by its share of covered carbon dioxide emissions above 1 billion metric tons, compared with the total for all such companies. The money would go into a Polluters Pay Climate Fund. Companies can ask to adjust their amount to avoid double counting when both extractors and refiners are involved. Payment is due by September 30, 2026, but companies may choose to pay in nine annual installments (20% the first year, then 10% each year after). Groups of related companies are treated as one, and all can be held responsible together if they owe. The Treasury must issue rules within 18 months to carry this out .

• Covered companies are those that extracted fossil fuels or refined crude oil and are responsible for more than 1 billion metric tons of covered carbon dioxide emissions during the set period. “Fossil fuels” include coal, crude oil, and natural gas and related gases. The law defines key terms and how emissions are counted for each company .

Key points

• Who is affected: Very large fossil fuel extractors and crude oil refiners with over 1 billion metric tons of covered emissions; related companies are treated as one group .
• What changes: A $1 trillion, one-time tax is split among these companies based on their share of covered emissions above the first 1 billion tons; adjustments are allowed to prevent double counting; a Polluters Pay Climate Fund is established to receive the money .
• When: Payment due September 30, 2026, with an option to pay over nine years; Treasury regulations due within 18 months of enactment .