HOPE Partners Submit Comment on the EPA’s Greenhouse Gas Reduction Fund Implementation Framework

May 26th, 2023

By Sara Miller, Senior Policy Analyst

The Environmental Protection Agency (EPA) recently released new guidance outlining implementation plans for the Greenhouse Gas Reduction Fund (GGRF). The GGRF was enacted in 2022 as part of the Inflation Reduction Act. The GGRF includes funding programs totaling $27 billion to mobilize financing for projects that reduce greenhouse gases and air pollution in low-income and disadvantaged communities. The program will direct funds through community lenders like Community Development Finance Institutions (CDFI), nonprofit organizations, and state and local governments.

The Community Builders of Color Coalition, a national network of financial institutions and advocacy organizations primarily led by people of color and with whom HOPE works closely, submitted comments to the EPA on the recently released guidance. The Coalition’s mission is to help eradicate the disproportionate impact of climate change on low-income and disadvantaged communities by sufficiently capitalizing and equipping BIPOC-led and other organizations that are deeply rooted in and serving disenfranchised populations.

As outlined in the EPA guidance, the GGRF will be implemented through three competitive grant programs. Those programs include the following:

National Clean Investment Fund (NCIF)

The NCIF will distribute $14 billion to 2-3 national nonprofit awardees who will use the funds along with private investments to finance clean technology projects focused on energy independence and a net zero economy.

Clean Communities Investment Accelerator (CCIA)

The CCIA will distribute $6 billion to 2-7 nonprofit awardees that will provide financial support and technical assistance to build the capacity of community lenders like CDFIs, credit unions, minority depository institutions, and others to provide financing for cost-saving and pollution-reducing clean energy projects for households, small businesses, and community institutions like schools.

Solar for All

The Solar for All program will distribute $7 billion to fund up to 60 grants (at least one in each state) to local and state governments and nonprofits to develop or expand residential and community solar projects for low-income and disadvantaged communities.

Some of the recommendations made by the Community Builders of Color Coalition in their public comment include the following:

Ensuring that Minority Depository Institutions and Community Development Finance Institutions are considered community lenders and are able to participate in the CCIA program.

Including technical assistance as an eligible use of the NCIF funds and ensuring that the GGRF has a “comprehensive, coordinated and user-friendly structure for the funded technical assistance strategy.” Allowable technical assistance should include resources for capacity building, training, predevelopment and development activities, community engagement processes and IT support.

Eliminate the $5 million funding cap per Community Lender proposed for the CCIA program and allow flexibility by grantees to deploy funds through their own data-informed and transparent allocation methodology. Awards could be based on historical lending activity, balance sheet size, or green activity market opportunity, the actual number of community lender awards or others depending on “the strategy that best fits their regional, utility, and community-specific needs.”

Increase the maximum allowable amount of awards that can be used for technical assistance in the CCIA. To do this and to increase the funding cap (see recommendation 3) the total funding for the CCIA competition should be increased by $3 billion, and the NCIF competition funding should be decreased accordingly.

Include a mechanism like the Community Development Financial Institutions Fund (CDFI Fund) Low-Income Targeted Population (LITP) definition when defining Low-income and disadvantaged communities for the purpose of the GGRF competitions in order to include eligible populations that may be outside of the geographies targeted through the he Climate and Economic Justice Screening Tool (CEJST) and the Environmental Justice Screening and Mapping Tools as is currently proposed.

Clarify the way the GGRF programs will measure that amount of benefits that flow to low-income communities and communities of color in order to align with the Justice40 initiative. The current proposed guidance looks at the designation of low-income and disadvantaged communities by geography but not by the eligibility of the eventual recipients of the program benefits.

See the remaining recommendations and the full comment submitted by the Community Builders of Color Coalition here.