EPA’s Greenhouse Gas Reduction Fund (GGRF)

EPA’s Greenhouse Gas Reduction Fund (GGRF)

Updated May 21, 2024
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 money
local, territorial, or tribal level, including community-
in the Treasury not otherwise appropriated, to remain
and low-income-focused lenders and capital providers.
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 state
and eligible recipients for the purposes of providing
additional requirements that would 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 financial and
engagement strategy to help shape implementation of the
technical assistance for qualified projects;
GGRF. EPA conducted listening sessions for members of
the public and stakeholder groups on November 1 and
• $8.0 billion to eligible recipients for financial and
November 9, 2022. EPA published a Request for
technical assistance for qualified projects in low-income
Information seeking public comment on core design aspects
and disadvantaged communities; and
of the GGRF. Further, EPA delivered a set of formal charge
questions for expert review and comment at the October 18-
• $30.0 million for agency administrative costs.
19, 2022, meeting of the agency’s Environmental Financial
Advisory Board (EFAB). On January 26, 2023, EFAB
IRA defines “eligible recipient” as a nonprofit organization
submitted guidance and considerations to EPA regarding
that
the GGRF’s potential objectives, program structure,
execution, reporting, and accountability. In its review,
• is designed to provide capital, leverage private capital,
EFAB assessed the strengths and weaknesses of various
and provide other forms of financial assistance for the
design elements of the fund including financial leverage,
rapid deployment of low- and zero-emission products,
additionality (i.e., whether project proposals would proceed
technologies, and services;
in the absence of the GGRF), capital recycling, capacity
building, and long-term operability across various recipient
• does not take deposits other than deposits from
types including states, municipalities, tribes, regional
repayments and other revenue received from financial
collectives, sectoral collectives, lender intermediaries, and a
assistance provided using grant funds under IRA;
national entity.
• is funded by public or charitable contributions; and
On February 14, 2023, EPA reported initial guidance on the
design of the GGRF program. At the time, EPA announced
• invests in or finances projects alone or in conjunction
plans to hold two competitions to distribute the grant
with other investors.
funding: a $20 billion General and Low-Income Assistance
Competition and a $7 billion Zero-Emissions Technology
Fund Competition.
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EPA’s Greenhouse Gas Reduction Fund (GGRF)
On April 19, 2023, EPA released additional guidance on the
Announcement of Awards
implementation framework for the GGRF. The guidance
On April 4, 2024, EPA announced selections for the
proposed splitting the majority of the $27 billion between
National Clean Investment Fund and the Clean
national and community groups across three competitions: a
Communities Investment Accelerator. Collectively, EPA
$14 billion National Clean Investment Fund; a $6 billion
estimates that the selected applicants would mobilize
Clean Communities Investment Accelerator; and a $7
almost $7 of private capital for every $1 of federal funds
billion Solar for All competition. Each competition would
and would dedicate over $14 billion of capital (over 70% of
be administered separately. The guidance also identified
the selections for awards) toward low-income and
three priority project categories for the competitions beyond
disadvantaged communities. EPA estimates that the funded
the Solar for All investments: (1) zero-emissions distributed
projects would ultimately reduce or avoid up to 40 million
power generation and storage; (2) retrofits to decarbonize
metric tons of GHG emissions per year. The National Clean
existing buildings; and (3) transportation pollution
Investment Fund selectees were Climate United Fund
reduction that supports zero-emissions transportation
($6.97 billion award), Coalition for Green Capital ($5
modes, especially in communities experiencing diesel
billion award), and Power Forward Communities ($2 billion
pollution and other poor air quality.
award). The Clean Communities Investment Accelerator
selectees were Opportunity Finance Network ($2.29 billion
EPA stated that the implementation framework was
award), Inclusiv ($1.87 billion award), Justice Climate
“intended to provide continued transparency and respond to
Fund ($940 million award), Appalachian Community
stakeholder requests for additional information on EPA’s
Capital ($500 million award), and Native CDFI Network
anticipated program design and application requirements in
($400 million award).
advance of the Notices of Funding Opportunity that will
formally kick off the application process as early as June
On April 22, 2024, EPA announced selections for the Solar
2023.” As proposed, the implementation framework steps
for All program. The 60 selected applications include 49
away from a conceptualization of the GGRF as a single
state-level awards, 6 awards to Tribes, and 5 multistate
national entity—a design supported by some stakeholders
awards. EPA estimates that the $7 billion in grant awards
and Members of Congress. EPA announced six public
would deliver residential solar projects to over 900,000
listening sessions and requested written technical feedback
households nationwide.
and comments on the implementation framework by May
12, 2023.
EPA anticipates that awards to the selected applicants
would be finalized by July 2024, and that projects would be
Notices of Funding Opportunities
funded by the selected applicants and their partners
EPA released the three GGRF Notices of Funding
thereafter.
Opportunities during the summer of 2023.
Congressional Considerations
• On June 28, 2023, EPA released the $7 billion Solar for
Beyond the GGRF’s authorization under IRA, Congress has
All Notice of Funding Opportunity. The competition
looked to oversee EPA’s implementation of the program.
aims to award up to 60 grants to states, territories, tribal
Some Members support the fund’s aims to leverage private-
governments, municipalities, and eligible nonprofit
sector actors and their funding toward climate- and
recipients to expand the number of low-income and
environmental justice-focused initiatives. Other Members
disadvantaged communities that could be made
voice concerns over possible conflicts of interest with
available for distributed solar investment. Grantees are
funding recipients; the potential for waste, fraud, and abuse
to use the funds to expand existing low-income solar
of taxpayer money; the challenges to program
programs or design and deploy new Solar for All
implementation given supply chain challenges in the solar
programs nationwide.
market; and constitutional law questions regarding the
private nondelegation doctrine and the application of the
• On July 14, 2023, EPA released the $14 billion National
Appointments Clause of the Constitution.
Clean Investment Fund Notice of Funding Opportunity.
The competition aims to provide grants to 2-3 national
Selected bills that include provisions regarding the GGRF
nonprofit clean financing institutions capable of
proposed in the 118th Congress include
partnering with the private sector to provide accessible,
affordable financing for clean technology projects
• H.R. 1, Lower Energy Costs Act, in which section
across the country.
10015 of the version engrossed in the House would
repeal the GGRF and rescind all unobligated balances;
• On July 14, 2023, EPA released the $6 billion Clean
Communities Investment Accelerator Notice of Funding
• H.R. 1023, which would repeal the GGRF and rescind
Opportunity. The competition aims to provide grants to
all unobligated balances; and
2-7 hub nonprofits that would, in turn, deliver funding
and technical assistance to build the clean financing
• H.R. 2811, Limit, Save, Grow Act of 2023, in which
capacity of local community lenders working in low-
section 10014 would repeal the GGRF and rescind all
income and disadvantaged communities.
unobligated balances.
Richard K. Lattanzio, Specialist in Environmental Policy
IF12387
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EPA’s Greenhouse Gas Reduction Fund (GGRF)

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https://crsreports.congress.gov | IF12387 · VERSION 4 · UPDATED