The PCAPs are an impressive exercise in identifying each state’s needs and priorities for reducing greenhouse gas pollution and give insight into what could be funded by the competitive CPRG Implementation Grants, ranging from $2 million to $500 million each. These Implementation Grants can fund a part of the state’s plan or the entire plan, and states were able to submit plans in coalition to address a sector together. With $4.3 billion available to state and local governments for the Implementation Grants, states can make real headway on their climate pollution reduction goals. 

What Do Strong State Plans Look Like?

The strongest state plans:

• Addressed the biggest sources of pollution within their state (which for most states includes transportation, buildings, and electricity generation), and tackled sectors that have historically received less attention, like industry and agriculture. (California, Maryland, Nevada, and Virginia). 
• Aligned their state plans with existing policies and processes, making their holistic planning efforts more achievable and potentially accelerating existing pollution reduction targets. (New York and Minnesota)
• Intend to use their plans to implement standards for vehicle or building pollution reductions. (New Jersey, Maryland)
• Used the plan to indicate where legislation is needed to better regulate industry actions (Minnesota)
• Thoroughly identified additional federal resources that could be used to accelerate climate pollution reductions. 

These state plans each rise to the top for their comprehensive approach to addressing pollution reductions across a variety of industries and using the planning process to identify standards, legislation, and coordination with other federal funds and existing state policies. 

What Should EPA Consider When Awarding Grants to States?

Submitting PCAPs was step one—the Implementation Grants get these ideas off the ground by putting money behind the plans and empowering states to drive pollution reduction. The two are further linked: Implementation Grant applications must include actions proposed in the PCAPs. This funding opportunity can be especially impactful for states that developed climate plans for the first time through the PCAP process. Some states and multi-state coalitions have already made their Implementation Grant applications public. 

Given the incredible opportunity to cut emissions through this one-time federal funding opportunity, all indications are that the competitive Implementation Grants are heavily oversubscribed. The total funds requested in grant applications by the many states, multi-state coalitions, and local and Tribal governments that applied is much more than the amount of funding available. EPA provided its evaluation criteria for assessing these applications and with such a high volume of applications, it will need to be especially rigorous in selecting the best proposals. 

Recommended Funding Criteria

The agency can ensure that funds lead to significant near-term pollution reduction and prioritize equitable outcomes across states and regions by focusing on funding Implementation Grants that align with these six criteria: 

1. 1. Select proposals that lead to the greatest possible near-term pollution reduction within states and across regions
   2. Fund Tier 1 single-state proposals in high-emission states that would not have the resources to implement their programs without significant new federal funding or would likely face political constraints in securing new funding
   3. Fund programs that pilot or scale innovative programs and strategies
   4. Use Implementation Grants to facilitate multi-state collaborations 
   5. Fund implementation of state-driven clean energy and pollution reduction standards
   6. Ensure that funds provide significant benefits to low-income and historically disadvantaged communities

The CPRG funds can have an even greater impact if EPA prioritizes the highest grant tier, awards up to $500 million, on fewer large grants that will shift sectors or regions. In doing so, EPA can reserve a few awards for smaller grants in states that could not move forward without federal funding. 

EPA should also prioritize applications with statewide impact above those that focus only on local outcomes. Similarly, funds should be awarded to applications that will decarbonize entire regions through coalition approaches. EPA should also harmonize CPRG award funds with other federal funding opportunities, ensure that states are able to readily implement federal standards, and fund applications designed to help states achieve their own standards for highly polluting sectors.

Turning Impactful Plans into Action with Implementation Grants

Tackling the Largest Sources of Pollution: Virginia, Maine, and Montana

Several states submitted Implementation Grants that focus on reducing the largest sources of pollution within their borders. 

In Virginia, transportation contributes to almost half of the state’s pollution, and the Implementation Grant submitted by the state is a “Comprehensive Decarbonization of Virginia’s Transportation Systems.” This plan includes four transportation projects that will support the electrification of light-duty fleets, rail and public transportation, public fleets, and port operations. 

In Maine, residential and commercial buildings combined make up the second largest source of pollution. The state proposed an Implementation Grant with a focus on buildings that would reduce pollution in public schools and municipal buildings in low-income and disadvantaged communities. 

In Montana, energy generation from fossil fuels is the largest source of pollution. The state submitted an Implementation Grant that would improve the electric grid, enabling more variable renewable energy sources to come online and improve the integration of new energy onto the grid—including by deploying energy storage and microgrids. 

By focusing their Implementation Grants on their largest emitting sectors, each of these states could make significant progress in pollution reduction if awarded funds. 

Decarbonizing Industry: Pennsylvania and Indiana

Though the largest sources of climate pollution nationwide are transportation and energy generation, industrial pollution currently accounts for over 20 percent of U.S. emissions and is expected to become the largest polluting sector by 2030. Consequently, addressing industrial sources will be critical to state and national climate plans, especially in rustbelt states such as Pennsylvania and Indiana, where industry accounts for the first and second largest source of state pollution, respectively.

It’s encouraging then, that Pennsylvania’s Implementation Grant application focuses entirely on cutting pollution from the industrial sector by investing in emission-reduction technologies at industrial facilities of all sizes. This proposal would cut 5.2 million metric tons of carbon pollution between 2025 and 2030, rapidly transforming the state's largest emitting sector while also creating 6,000 jobs. 

Indiana also applied for an Implementation Grant to reduce industrial pollution through energy efficiency improvements at industrial facilities that would reduce overall energy demand and fuel usage.

Deploying Clean Energy: Michigan

The best way to lock in pollution reduction measures is by setting standards to require polluting industries to reduce emissions on a defined timeline. Michigan addressed this challenge head-on by applying for an Implementation Grant to fund the implementation of the state’s landmark clean energy law, passed in their last legislative session. Through a combination of incentives, technical assistance, strategic plan development, and workforce development programs, Michigan can remove barriers to renewable energy siting to deploy more renewable energy. Funding this proposal would allow the state to meet its renewable energy targets by 2030. 

States Working Together to Maximize Pollution Reductions

In addition to individual applications for Implementation Grants, states were encouraged to work together to tackle pollution reduction on a regional scale. Several states collaborated to submit Implementation Grants that would address transportation and clean energy together. These regional approaches can be particularly impactful for accelerating pollution reduction and addressing an entire sector more comprehensively than a single state could. 

Multi-State Coalitions

States in the Midwest submitted a proposal to develop a heavy-duty vehicle charging corridor, which is expected to include Minnesota, Michigan, and Wisconsin. This would be impactful in decreasing transportation pollution while continuing to support the high volume of goods moving throughout the Midwest shipping routes.

A similar electric vehicle charging corridor for medium- and heavy-duty vehicles was proposed in the Northeast with New Jersey leading a multi-state coalition, including Maryland, Connecticut, and Delaware. Many of these Northeastern states are already working towards heavy- and medium-duty fleet electrification through the adoption of California’s vehicle waivers, and this charging corridor would fast-track that progress. 

The Southwest states of New Mexico, Arizona, and Oklahoma also submitted an application for a medium and heavy-duty charging corridor to reduce pollution on Interstate 40. This program, if funded, would help accelerate the transition to electric heavy-duty vehicles by providing financial incentives to reduce the cost of the vehicles. This program would make electric vehicles more accessible even for states that do not currently have electric vehicle mandates. 

Sharing Resources

In order to deploy more clean energy and storage, 15 states are working together to invest in zero-emission technologies that would be placed on municipal buildings. Hawai’i will lead this multi-state effort to increase renewable energy capacity through the CPRG Implementation Grants, while also using direct pay tax credits to support the overall cost of the project. This effort aligns with EPA’s goal in the PCAP process to encourage states to collaborate with local governments, while also allowing local governments to share resources about how to make good use of the direct pay tax credits to increase renewable energy generation and storage capacity. 

CPRG: Once-In-A-Generation Funding to Transform the Nation

The $4.3 billion dollars available to state and local governments through the Implementation Grants will shortly translate to tangible investments in programs and infrastructure that can radically reduce emissions and provide community benefits. The majority of states have developed plans that will serve as the stepping stones for climate action in the years to come. Now that states have a road map and identified a wealth of federal funding options, states that are not funded through CPRG can still take action. 

EPA now has the responsibility of selecting the most impactful and transformational proposals that will propel the nation into a clean energy future. Award decisions on the Implementation Grants are expected to be announced in August 2024, and we are excited to see which states receive this once-in-a-generation funding later this year.