Superfund excise tax: Implications across the ethylene value chain

As of 1 July 2022, the Infrastructure Investment and Jobs Act (IIJA, Public Law 117-58) reinstated the Superfund excise tax imposed on the production and imports of certain chemicals under the Internal Revenue Code sections 4661 through 4672. Reinstatement of this excise tax is expected to generate an estimated 14.5 billion dollars in revenue over the next decade per the Joint Committee on Taxation, and will be primarily used toward environmental remediation. In this Insight, we aim to explore implications the Superfund excise tax will have for the ethylene value chain, with specific focus on the top two derivatives by consumption volume and excise tax rate i.e. polyethylene and EO/EG.