EPA Begins Designing a Federal Green Bank

By Christian Roselund

The U.S. Environmental Protection Agency (EPA) has begun designing a new federal green bank to provide grants and mobilize capital for projects that reduce or avoid greenhouse gas emissions, with an emphasis on projects that benefit low-income and disadvantaged communities. The Greenhouse Gas Reduction Fund (GGRF) was authorized by the Inflation Reduction Act (IRA), and with $27 billion in funding represents the single largest pot of money awarded by the IRA.

GGRF represents a scaling up of the model of 21 green banks that are located across the United States and operate at the state and local government level. According to the law firm of Holland & Knight, these banks have leveraged more than $7 billion in clean energy investments to date.

GGRF includes three separate pots of funding:

Projects funded by the GGRF must reduce or avoid greenhouse gases, which the EPA defines to include CO2, hydrofluorocarbons (HFCs), methane, nitrous oxide, and other pollutants.

As its first step in designing the bank, EPA has begun to seek public input on the fund’s implementation. The agency has opened a 45-day public comment period to hear from stakeholders, communities, and the public, including listening sessions on 1 November and 9 November 2022. Additionally, the Environmental Financial Advisory Board is soliciting expert input on key program design questions and will deliver recommendations to the EPA.

EPA must make awards under the program by 30 September 2024. Given the tight timeline, Holland & Knight expect the program to be up and running in the first or second quarter of 2023.

Analysis: EPA Moves Ahead on Green Bank: Opportunity to Weigh In Is Now (JD Supra)