thereof. (d) Exemption and refund The Secretary shall prescribe such rules as are necessary to ensure the fee imposed by this section is not imposed with respect to any nonemitting use, or any sale or transfer for a nonemitting use, including rules providing for the refund of any carbon fee paid under this section with respect to any such use, sale, or transfer. (e) Exemptions (1) Agriculture (A) Fuel If any covered fuel or its derivative is used on a farm for a farming purpose, the Secretary shall pay (without interest) to the ultimate purchaser of such covered fuel or its derivative, the total amount of carbon fees previously paid upon that covered fuel or its derivative, as specified by rule of the Secretary. (B) Farm, farming use, and farming purpose The terms farm , farming use , and farming purpose shall have the respective meanings given such terms under section 6420(c). (C) Other greenhouse gases emissions from agriculture The carbon fee shall not be levied upon non-fossil fuel greenhouse gas emissions which occur on a farm. (2) Armed Forces of the United States If any covered fuel or its derivative is used by the Armed Forces of the United States as supplies for vessels of war, vehicles, or electrical power generation equipment, the Secretary shall pay (without interest) to the ultimate purchaser of such covered fuel or its derivative, the total amount of carbon fees previously paid upon that covered fuel or its derivative, as specified by rule of the Secretary. 9903. Emissions reduction schedule (a) In general An emissions reduction schedule for greenhouse gas emissions from covered fuels is hereby established, as follows: (1) Reference year The greenhouse gas emissions from covered fuels during the year 2016 shall be the reference amount of emissions and shall be determined from the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2016 published by the Environmental Protection Agency in April of 2018. (2) Emissions reduction target The first emission reduction target shall be for the year