EPA Moves Ahead on Green Bank: Opportunity to Weigh In Is Now

The Inflation Reduction Act (IRA) authorized the Greenhouse Gas Reduction Fund (GGRF), a $27 billion clean energy deployment bank housed at the Environmental Protection Agency (EPA). The GGRF is the largest single pot of funding enacted in the IRA, which gave EPA broad discretion to invest in clean energy technologies via green banking, offering federal financing for projects without the requirements associated with direct federal investment.

This is the first time such a bank or fund has been federally authorized; however, there are several states and cities that have their own "green banks." In fact, there are 21 green banks in the U.S., and since 2011, they have leveraged more than $7 billion in clean energy investments around the country.

GGRF Background

The EPA announced on Oct. 21, 2022, that it is moving forward to advance the creation of the GGRF, which includes: 

• $7 billion for competitive grants to enable low-income and disadvantaged communities to deploy or benefit from zero-emission technologies, including distributed technologies on residential rooftops
• nearly $12 billion for competitive grants to eligible entities to provide financial and technical assistance to projects that reduce or avoid greenhouse gas (GHG) emissions
• $8 billion for competitive grants to eligible entities to provide financial and technical assistance to projects that reduce or avoid GHG emissions in low-income and disadvantaged communities 

Projects funded under this program must reduce air pollution by reduction or avoidance of GHG emissions. The IRA applies across numerous EPA programs a specific definition of "greenhouse gas" that includes air pollutants, carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons and sulfur hexafluoride.

Given that this is a first-of-its-kind initiative at the EPA, the agency is looking for stakeholder engagement and has provided a variety of options to engage.

Request for Information

EPA opened a 45-day comment period to hear from stakeholders, communities and the public on GGRF's design and implementation. Comments are due by Dec. 5, 2022.

National Listening Session Series

The EPA will hold two listening sessions to enable key stakeholders – including green banks, community finance institutions, environmental justice communities, state and local governments, clean energy advocates, labor and others – to provide input directly to EPA staff on the GGRF's implementation. Interested participants should register for Listening Session 1 on Nov. 1, 2022, or Listening Session 2 on Nov. 9, 2022. Each session will be held from 7 p.m. to 9 p.m. ET.

Expert Input

The Environmental Financial Advisory Board (EFAB) is soliciting expert input on key program design questions. The board issued a set of formal charge questions for expert review and comment at its Oct. 18-19 meeting. The EFAB will deliver its recommendations to the EPA by Dec. 15, 2022.

Next Steps

While it will take some time for the EPA to review the request for information (RFI) responses and other solicited feedback, the agency will have to pivot and move quickly to set up this $27 billion program, as it only has until Sept. 30, 2024, to make awards under the authorization provided in the IRA. As such, the program is expected to be up and running in the first or second quarter of 2023, giving the GGRF just over a year to dole out $27 billion.

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