Clean Air Program (CAP) Grants

In June 2022, Governor Polis signed Senate Bill 22-193 Air Quality Improvement Investments, which authorizes the Colorado Energy Office (CEO) to provide financial assistance in the form of reimbursement-based grants to eligible applicants for the implementation of voluntary industrial and manufacturing air pollutant emission reduction projects in Colorado. The resulting Clean Air Program (CAP) is a competitive grant program administered by CEO, with a total funding amount not to exceed $25 million over the program’s six-year duration, sunsetting June 30, 2028.

Looking for some assistance in identifying decarbonization opportunities at your facility? Head over to the CAP Technical Assistance Offering webpage to learn more about CEO's dedicated technical assistance offering. Technical assistance can help an applicant meet the CAP grant application's technical requirements for most project types.

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Type: Grant

For: Private entities, Local governments, Public-private partnerships

Amount: $25 million total

Match: Cash match required, amounts may be project and/or applicant-type specific

Program Length: 6 years, sunsetting June 30, 2028

RFA rounds: 2nd round closed; next round expected Summer 2024

Request for Applications (RFA)

The second RFA round closed on March 8. RFA documents from this round are linked below for reference.

View and download all RFA documents

Eligible applicants

  • Private entities, including manufacturing operations, cement plants, steel mills,  energy producers, refineries, meat packing plants, dairies,  mine owners/operators, airline operations, drinking water treatment plants, wastewater treatment plants, landfill operators, coal mine sites, carbon management project developers.
  • Local governments, including statutory or home rule municipalities, counties, city and counties, or special districts
  • Tribal governments
  • Public-private partnerships between a local government and a private entity

Note: Local and Tribal governments may only apply for funding for air pollution reduction projects at drinking and wastewater treatment plants and landfills, and for carbon management and methane capture & destruction projects.

Eligible project costs & types

Funds shall be used for costs directly associated with the purchase and installation of industrial air pollutant emission reduction projects at the site where air pollutant emissions are being generated and released (Scope 1 emissions). Additionally, project costs associated with direct air capture, carbon dioxide (CO2) storage, and CO2 utilization are eligible for CAP funding.

Eligible project types for the second RFA round currently include:

  • Fossil fuel efficiency and fuel switching to lower carbon fuel sources
  • Industrial process changes that reduce air pollutant emissions
  • Converting fossil fuel-powered equipment/processes to an electric fuel source (i.e. strategic electrification)
  • Renewable energy projects, where grid access is unavailable or where renewable energy clearly supports strategic electrification or fulfills some or all processing heating requirements
  • Carbon management projects, specifically:
    • Carbon capture from an industrial point source
    • Carbon sequestration or storage
    • Carbon utilization
    • Direct Air Capture
  • Methane Capture and destruction from landfills and  coal mines (active or inactive).

What is a voluntary project?

CAP considers a voluntary project to be a project submitted by an applicant who, at the time of application submission and award determination, is not subject to applicable state or federal air pollutant or energy reduction law(s), regulation(s) or legally binding mandate(s) that require the applicant to undertake reductions at or above the levels estimated to be achieved through the proposed project. In the event that an applicant is subject to any such requirements, the applicant is required to demonstrate all resulting air pollutant and/or energy reduction benefits are in excess of existing reduction or efficiency requirements, or that the reductions will occur at least one year before the requirements mandate. A voluntary project must also clearly demonstrate that the proposed project would not have been undertaken under a business-as-usual scenario (e.g. replacing of equipment within three years of the end of its useful life).

Note: CAP requires that additionality criteria be met and reserves the right to make final determinations as to whether additionality requirements have been satisfied

CEO currently anticipates making approximately $15 million available to eligible entities in the second funding round. The minimum funding award per application is $100,000. The maximum funding award amount per application is $1.5 million.

Applicants who meet program criteria and eligibility requirements can submit an application and all required supporting documents via email during the RFA cycle. CEO will send an email acknowledging receipt of the application.

Step I: CEO will review applications to determine that the applicant and project type are eligible for CAP funding and the applicant submitted all required information.

Step II: A review committee will score applications based on the following criteria: 

  • Annual estimated air pollutant emissions avoided 
  • Project co-benefits (e.g., health benefits, job creation)
  • Project readiness 
  • Demonstrated funding need & non-CAP resources leveraged 
  • Project innovation 

Scores will be systematically weighted to prioritize funding for projects in disproportionately impacted communities and nonattainment areas and for small disadvantaged businesses.

Projects not meeting additionality requirements outlined in the RFA documents will not be considered. Please refer to the first round RFA documents linked above under Request for Applications (RFA) for more information.

Step III: CEO will make project award determinations and will contact awarded applicants with the next steps to formally execute a grant agreement. CEO will also notify applicants not selected for grant funding via email.

Awarded applicants must enter a formal grant agreement with CEO to receive funds. CEO will issue payment as reimbursements. Work the applicant performs before formally executing a grant agreement with CEO is not eligible for reimbursement.


Federal Grant Opportunities & Resources

CAP highly encourages industry to apply for federal grant funding opportunities for energy & emission reduction projects. CEO is open to providing letters of support for such applications when appropriate and foresees allowing such funding to be stacked with CAP-awarded funding. Please reach out to Wil Mannes with any letter of support requests of the Colorado Energy Office.

Key funding opportunities through the U.S. Department of Energy (DOE) include: