Tradeable Energy Performance Standards Act

This legislation sets up a national, tradable standard to cut carbon pollution from big power plants and large users of steam/heat. Starting in 2028, each covered facility must turn in one “emission allowance” for every metric ton of carbon dioxide it released the year before, due by June 1; one allowance equals one metric ton. Allowances can be bought, sold, or traded, and EPA also gives out some each March based on how much energy a plant produced, with the number given per unit of energy shrinking over time to push cleaner, more efficient power. Facilities may also make an approved payment instead of turning in an allowance, with amounts that step up over time to match the Social Cost of Carbon by 2048 and after. Allowances are only good for the year issued or the next year, and they are not property rights.

The bill adds rules to keep the market fair and cut emissions faster. EPA must track all allowance trades, publish weekly price and volume data, and set limits so no one can corner the market. If a facility falls short, it owes a steep penalty—three times last year’s highest allowance price for each missing allowance—and still has to make up the gap later. The bill also creates a Carbon Mitigation Fund, paid for by alternative payments and penalties, to award grants for cost‑effective projects that lower emissions, like energy‑efficiency upgrades, grid improvements, swapping gas appliances for electric ones, cleaner public fleets, and more EV charging; funds go first to the lowest‑cost proposals each year. Existing plants and newly built low‑emission plants can sign bilateral deals that shift allowances to support new clean projects. Smaller facilities can choose to opt in. EPA must finish the rules within two years, and federal auditors will review progress starting in 2029 and every two years after.

• Who is affected: Large electricity generators and large thermal energy users; smaller facilities may opt in.
• What changes: Turn in allowances for each ton of CO2; trade allowances; or make an approved payment; grants fund local emissions‑cutting projects; strong penalties for noncompliance.
• When: Starts in 2028; allowances given out by March 1 and due by June 1 each year; grant proposals solicited each Feb. 1, awards by Aug. 1; EPA rules due within 24 months; progress reports begin Jan. 1, 2029.