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.
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 is anticipated to open in late fall (2023) or early winter (2024)
Request for Applications (RFA)
The initial RFA has closed. CEO is currently working on formal grant agreements with applicants initially approved via a notice of intent to award.
CEO has started preparing the second RFA funding round and highly encourages potential applicants to review the first funding round RFA documents to get a sense of the application requirements for non-carbon management projects.
- Private entities, including manufacturing operations, cement plants, steel mills, energy producers, refineries, meat packing plants, dairies, mining operations, airline operations, wastewater treatment plants, landfill operators, abandoned coal mine sites. Note: energy-as-a-service companies are currently be examined for potential inclusion.
- Local governments, including statutory or home rule municipalities, counties, city and counties, or special districts
- Public-private partnerships between a local government and a private entity
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)
- Where grid access is unavailable, renewable energy projects supporting strategic electrification or fulfilling 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
CEO is still determining whether certain additional project types will be eligible for funding in the second RFA round, including:
- Transportation projects
- Methane capture from landfills, sewage treatment plants, active or inactive coal mines, or agricultural operations
- Projects producing or utilizing clean hydrogen: Green hydrogen projects via electrolysis powered entirely by renewable energy will be prioritized over clean hydrogen projects utilizing any other clean hydrogen production technology. Other clean hydrogen projects, if awarded, must comply with section 42 U.S.C. sec. 16152 (1)
What is a voluntary/additional 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/additional 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 reserves the right to make final determinations as to whether a project's 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. CEO is still determining the maximum funding award per application for the second funding round.
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.
You can find a running list of the U.S. Department of Energy's Financial Opportunity Announcements through its Office of Clean Energy Demonstrations.