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

(P.L. 117-169), a budget reconciliation measure commonly

referred to as the Inflation Reduction Act of 2022 (IRA).

IRA contains eight titles, each with some provisions that

directly or indirectly address issues related to climate

change, including the reduction of U.S. greenhouse gas

(GHG) emissions and the promotion of adaptation and

resilience to climate change impacts.

IRA Section 60103: Greenhouse Gas

Reduction Fund

Section 60103 of IRA (codified at 42 U.S.C. §7434)

amends the Clean Air Act to provide for a Greenhouse Gas

Reduction Fund (GGRF) to be administered by the U.S.

Environmental Protection Agency (EPA). The provision

appropriated $27 billion to EPA for FY2022, out of money

in the Treasury not otherwise appropriated, to remain

available until September 30, 2024, to make grants, on a

competitive basis, as follows:

• $7.0 billion to states, municipalities, tribal governments,

and eligible recipients for the purposes of providing

grants, loans, or other forms of financial assistance, as

well as technical assistance, to enable low-income and

disadvantaged communities to deploy or benefit from

zero-emission technologies;

• $11.97 billion to eligible recipients for financial and

technical assistance for qualified projects;

• $8.0 billion to eligible recipients for financial and

technical assistance for qualified projects in low-income

and disadvantaged communities; and

• $30.0 million for agency administrative costs.

IRA defines “eligible recipient” as a nonprofit organization

that

• is designed to provide capital, leverage private capital,

and provide other forms of financial assistance for the

rapid deployment of low- and zero-emission products,

technologies, and services;

• does not take deposits other than deposits from

repayments and other revenue received from financial

assistance provided using grant funds under IRA;

• is funded by public or charitable contributions; and

• invests in or finances projects alone or in conjunction

with other investors.

IRA defines “qualified projects” to include any project,

activity, or technology that reduces or avoids GHG

emissions and other forms of air pollution in partnership

with, and by leveraging investment from, the private sector.

Eligible recipients that meet the above definition may use

the grant funding for

• direct investments in the form of financial assistance for

a qualified project or

• indirect investments in the form of funding and

technical assistance to support new or existing public,

quasi-public, or nonprofit entities that in turn provide

financial assistance to qualified projects at the state,

local, territorial, or tribal level, including communityand low-income-focused lenders and capital providers.

IRA directs EPA to begin this process not later than 180

calendar days after the date of enactment (i.e., not later than

February 12, 2023). Section 60103 does not explicitly state

additional requirements that would apply to EPA or its

grant recipients, such as general federal requirements for

grants and agreements.

EPA Implementation

Upon enactment of IRA, EPA launched a stakeholder

engagement strategy to help shape implementation of the

GGRF. EPA conducted listening sessions for members of

the public and stakeholder groups on November 1 and

November 9, 2022. EPA published a Request for

Information seeking public comment on core design aspects

of the GGRF. Further, EPA delivered a set of formal charge

questions for expert review and comment at the October 1819, 2022, meeting of the agency’s Environmental Financial

Advisory Board (EFAB). On January 26, 2023, EFAB

submitted guidance and considerations to EPA regarding

the GGRF’s potential objectives, program structure,

execution, reporting, and accountability. In its review,

EFAB assessed the strengths and weaknesses of various

design elements of the fund including financial leverage,

additionality (i.e., whether project proposals would proceed

in the absence of the GGRF), capital recycling, capacity

building, and long-term operability across various recipient

types including states, municipalities, tribes, regional

collectives, sectoral collectives, lender intermediaries, and a

national entity.

On February 14, 2023, EPA reported initial guidance on the

design of the GGRF program. At the time, EPA announced

plans to hold two competitions to distribute the grant

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

implementation framework for the GGRF. The guidance

proposed splitting the majority of the $27 billion between

national and community groups across three competitions: a

$14 billion National Clean Investment Fund; a $6 billion

Clean Communities Investment Accelerator; and a $7

billion Solar for All competition. Each competition would

be administered separately. The guidance also identified

three priority project categories for the competitions beyond

the Solar for All investments: (1) zero-emissions distributed

power generation and storage; (2) retrofits to decarbonize

existing buildings; and (3) transportation pollution

reduction that supports zero-emissions transportation

modes, especially in communities experiencing diesel

pollution and other poor air quality.

EPA stated that the implementation framework was

“intended to provide continued transparency and respond to

stakeholder requests for additional information on EPA’s

anticipated program design and application requirements in

advance of the Notices of Funding Opportunity that will

formally kick off the application process as early as June

2023.” As proposed, the implementation framework steps

away from a conceptualization of the GGRF as a single

national entity—a design supported by some stakeholders

and Members of Congress. EPA announced six public

listening sessions and requested written technical feedback

and comments on the implementation framework by May

12, 2023.

Notices of Funding Opportunities

EPA released the three GGRF Notices of Funding

Opportunities during the summer of 2023.

• On June 28, 2023, EPA released the $7 billion Solar for

All Notice of Funding Opportunity. The competition

aims to award up to 60 grants to states, territories, tribal

governments, municipalities, and eligible nonprofit

recipients to expand the number of low-income and

disadvantaged communities that could be made

available for distributed solar investment. Grantees are

to use the funds to expand existing low-income solar

programs or design and deploy new Solar for All

programs nationwide.

• On July 14, 2023, EPA released the $14 billion National

Clean Investment Fund Notice of Funding Opportunity.

The competition aims to provide grants to 2-3 national

nonprofit clean financing institutions capable of

partnering with the private sector to provide accessible,

affordable financing for clean technology projects

across the country.

• On July 14, 2023, EPA released the $6 billion Clean

Communities Investment Accelerator Notice of Funding

Opportunity. The competition aims to provide grants to

2-7 hub nonprofits that would, in turn, deliver funding

and technical assistance to build the clean financing

capacity of local community lenders working in lowincome and disadvantaged communities.

Announcement of Awards

On April 4, 2024, EPA announced selections for the

National Clean Investment Fund and the Clean

Communities Investment Accelerator. Collectively, EPA

estimates that the selected applicants would mobilize

almost $7 of private capital for every $1 of federal funds

and would dedicate over $14 billion of capital (over 70% of

the selections for awards) toward low-income and

disadvantaged communities. EPA estimates that the funded

projects would ultimately reduce or avoid up to 40 million

metric tons of GHG emissions per year. The National Clean

Investment Fund selectees were Climate United Fund

($6.97 billion award), Coalition for Green Capital ($5

billion award), and Power Forward Communities ($2 billion

award). The Clean Communities Investment Accelerator

selectees were Opportunity Finance Network ($2.29 billion

award), Inclusiv ($1.87 billion award), Justice Climate

Fund ($940 million award), Appalachian Community

Capital ($500 million award), and Native CDFI Network

($400 million award).

On April 22, 2024, EPA announced selections for the Solar

for All program. The 60 selected applications include 49

state-level awards, 6 awards to Tribes, and 5 multistate

awards. EPA estimates that the $7 billion in grant awards

would deliver residential solar projects to over 900,000

households nationwide.

EPA anticipates that awards to the selected applicants

would be finalized by July 2024, and that projects would be

funded by the selected applicants and their partners

thereafter.

Congressional Considerations

Beyond the GGRF’s authorization under IRA, Congress has

looked to oversee EPA’s implementation of the program.

Some Members support the fund’s aims to leverage privatesector actors and their funding toward climate- and

environmental justice-focused initiatives. Other Members

voice concerns over possible conflicts of interest with

funding recipients; the potential for waste, fraud, and abuse

of taxpayer money; the challenges to program

implementation given supply chain challenges in the solar

market; and constitutional law questions regarding the

private nondelegation doctrine and the application of the

Appointments Clause of the Constitution.

Selected bills that include provisions regarding the GGRF

proposed in the 118th Congress include

• H.R. 1, Lower Energy Costs Act, in which section

10015 of the version engrossed in the House would

repeal the GGRF and rescind all unobligated balances;

• H.R. 1023, which would repeal the GGRF and rescind

all unobligated balances; and

• H.R. 2811, Limit, Save, Grow Act of 2023, in which

section 10014 would repeal the GGRF and rescind all

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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