Updated October 27, 2023
EPA’s Greenhouse Gas Reduction Fund (GGRF)
On August 16, 2022, President Biden signed H.R. 5376
IRA defines “qualified projects” to include any project,
(P.L. 117-169), a budget reconciliation measure commonly
activity, or technology that reduces or avoids GHG
referred to as the Inflation Reduction Act of 2022 (IRA).
emissions and other forms of air pollution in partnership
IRA contains eight titles, each with some provisions that
with, and by leveraging investment from, the private sector.
directly or indirectly address issues related to climate
change, including the reduction of U.S. greenhouse gas
Eligible recipients that meet the above definition may use
(GHG) emissions and the promotion of adaptation and
the grant funding for
resilience to climate change impacts.
• direct investments in the form of financial assistance for
IRA Section 60103: Greenhouse Gas
a qualified project or
Reduction Fund
Section 60103 of IRA (codified at 42 U.S.C. §7434)
• indirect investments in the form of funding and
amends the Clean Air Act to provide for a Greenhouse Gas
technical assistance to support new or existing public,
Reduction Fund (GGRF) to be administered by the U.S.
quasi-public, or nonprofit entities that in turn provide
Environmental Protection Agency (EPA). The provision
financial assistance to qualified projects at the state,
appropriated $27 billion to EPA for FY2022, out of any
local, territorial, or tribal level, including community-
money in the Treasury not otherwise appropriated, to
and low-income-focused lenders and capital providers.
remain available until September 30, 2024, to make grants,
on a competitive basis, as follows:
IRA directs EPA to begin this process not later than 180
calendar days after the date of enactment (i.e., not later than
• $7.0 billion to states, municipalities, tribal governments,
February 12, 2023). Section 60103 does not explicitly
and eligible recipients for the purposes of providing
clarify which additional requirements apply to EPA or its
grants, loans, or other forms of financial assistance, as
grant recipients, such as general federal requirements for
well as technical assistance, to enable low-income and
grants and agreements.
disadvantaged communities to deploy or benefit from
zero-emission technologies;
EPA Implementation
Upon enactment of IRA, EPA launched a stakeholder
• $11.97 billion to eligible recipients for the purpose of
engagement strategy to help shape implementation of the
providing financial and technical assistance for qualified
GGRF. EPA conducted listening sessions for members of
projects;
the public and stakeholder groups on November 1 and
November 9, 2022. EPA published a Request for
• $8.0 billion to eligible recipients for the purpose of
Information seeking public comment on core design aspects
providing financial and technical assistance for qualified
of the GGRF. Further, EPA delivered a set of formal charge
projects in low-income and disadvantaged communities;
questions for expert review and comment at the October 18-
and
19, 2022, meeting of the agency’s Environmental Financial
Advisory Board (EFAB). On January 26, 2023, EFAB
• $30.0 million for agency administrative costs.
submitted guidance and considerations to EPA regarding
the GGRF’s potential objectives, program structure,
IRA defines “eligible recipient” as a nonprofit organization
execution, reporting, and accountability. In its review,
that
EFAB assessed the strengths and weaknesses of various
design elements of the fund including financial leverage,
• is designed to provide capital, leverage private capital,
additionality (i.e., whether project proposals would proceed
and provide other forms of financial assistance for the
in the absence of the GGRF), capital recycling, capacity
rapid deployment of low- and zero-emission products,
building, and long-term operability across various recipient
technologies, and services;
types including states, municipalities, tribes, regional
collectives, sectoral collectives, lender intermediaries, and a
• does not take deposits other than deposits from
national entity.
repayments and other revenue received from financial
assistance provided using grant funds under IRA;
On February 14, 2023, EPA reported initial guidance on the
design of the GGRF program. At the time, EPA announced
• is funded by public or charitable contributions; and
plans to hold two competitions to distribute the grant
funding: a $20 billion General and Low-Income Assistance
• invests in or finances projects alone or in conjunction
Competition and a $7 billion Zero-Emissions Technology
with other investors.
Fund Competition.
https://crsreports.congress.gov

---

EPA’s Greenhouse Gas Reduction Fund (GGRF)
On April 19, 2023, EPA released additional guidance on the
Green Banks
implementation framework for the GGRF. The guidance
Statutory provisions for the GGRF reflect the
proposed splitting the majority of the $27 billion between
characteristics of entities commonly referred to as “green
national and community groups across three competitions: a
banks.” Green banks are relatively new types of financial
$14 billion National Clean Investment Fund; a $6 billion
institutions aimed at overcoming market barriers and
Clean Communities Investment Accelerator; and a $7
scaling up investment in low-carbon technologies and
billion Solar for All competition. Each competition would
climate-resilient infrastructure. In general, green banks may
be administered separately. The guidance also identified
be public, quasi-public, or nonprofit institutions that are
three priority project categories for the competitions beyond
publicly capitalized to facilitate private investment and
the Solar for All investments: (1) zero-emissions distributed
produce revenue to be used for further investments. Green
power generation and storage; (2) retrofits to decarbonize
banks typically do not exist to make a profit and as such
existing buildings; and (3) transportation pollution
may be able to help reduce the cost of capital, mitigate risk,
reduction that supports zero-emissions transportation
and provide more favorable lending rates to incentivize
modes, especially in communities experiencing diesel
investments. They can offer loans, leases, credit
pollution and other poor air quality.
enhancements, and other financing services either directly
to project management entities or through financial
EPA stated that the implementation framework was
intermediaries.
“intended to provide continued transparency and respond to
stakeholder requests for additional information on EPA’s
Governments have created green banks in various national
anticipated program design and application requirements in
and local contexts to achieve a range of goals, including
advance of the Notices of Funding Opportunity that will
meeting GHG emissions targets, supporting local
formally kick off the application process as early as June
community development, lowering energy costs,
2023.” As proposed, the implementation framework steps
developing low-carbon and climate-resilient technology
away from a conceptualization of the GGRF as a single
markets, creating jobs, and lowering the cost of capital for
national entity—a design supported by some stakeholders
specified investments. Governments have established green
and Members of Congress. EPA announced six public
banks at the national level (e.g., Australia, New Zealand,
listening sessions and requested written technical feedback
Malaysia, Switzerland, and the United Kingdom), at the
and comments on the implementation framework by May
state or district level (e.g., California, Connecticut, Hawaii,
12, 2023.
New York, Rhode Island, and the District of Columbia),
and at the county level (e.g., Montgomery County, MD).
Notice of Funding Opportunities
Some of the above-listed green banks—as well as some
EPA released the three GGRF Notice of Funding
other financial institutions—may meet the definition of
Opportunities during the summer of 2023.
eligible recipient under Section 60103 of IRA, whereas
others may qualify to receive indirect investments.
• On June 28, 2023, EPA released the $7 billion Solar for
All Notice of Funding Opportunity. The competition
Past Congressional Proposals
aims to award up to 60 grants to states, territories, Tribal
Proposals for a national-level green bank in the United
governments, municipalities, and eligible nonprofit
States reach back at least to the 110th Congress (e.g., H.R.
recipients to expand the number of low-income and
6078 and H.R. 6899). In the 117th Congress, at least four
disadvantaged communities that could be made
bills were introduced on green banks, including H.R. 806,
available for distributed solar investment. Grantees are
“Clean Energy and Sustainability Accelerator Act”; S. 283,
to use the funds to expand existing low-income solar
“National Climate Bank Act”; H.R. 2451/S. 685,
programs or design and deploy new Solar for All
“America’s Clean Future Fund Act”; H.R. 2656/S. 1208,
programs nationwide.
“A bill to amend title 31, United States Code, to provide for
the issuance of Green Bonds and to establish the United
• On July 14, 2023, EPA released the $14 billion National
States Green Bank, and for other purposes.”
Clean Investment Fund Notice of Funding Opportunity.
The competition aims to provide grants to 2–3 national
Past congressional proposals for a national green bank have
nonprofit clean financing institutions capable of
differed among themselves and from existing entities in
partnering with the private sector to provide accessible,
significant ways, including, but not limited to (1) whether
affordable financing for clean technology projects
the proposal is freestanding or amendatory of existing
across the country.
statute; (2) the legal status of the bank and its relationship
to the U.S. government; (3) specific project or recipient
• On July 14, 2023, EPA released the $6 billion Clean
eligibility; (4) project prioritization; (5) means of
Communities Investment Accelerator Notice of Funding
capitalization; and (6) governance, administrative, and audit
Opportunity. The competition aims to provide grants to
structure. The establishment of a national green bank would
2–7 hub nonprofits that would, in turn, deliver funding
likely require resolving policy specificities within these
and technical assistance to build the clean financing
items.
capacity of local community lenders working in low-
income and disadvantaged communities.
Richard K. Lattanzio, Specialist in Environmental Policy
IF12387


https://crsreports.congress.gov

---

EPA’s Greenhouse Gas Reduction Fund (GGRF)


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF12387 · VERSION 3 · UPDATED

---