U.S. Environmental Protection Agency
Environmental Financial Advisory Board
Public Meeting Minutes
Sept. 20, 2022
Location: Virtual
Respectfully submitted by Edward H. Chu, EPA Designated Federal Officer
Certified as accurate by Kerry E. O'Neill, Chair, Environmental Financial Advisory Board
NOTE AND DISCLAIMER: The minutes that follow reflect a summary of remarks and conversation during the meeting. Such
ideas, suggestions, and deliberations do not necessarily reflect consensus advice from the Board. Formal advice and
recommendations may be found in the final advisory reports or letters prepared and transmitted to the agency following the
public meetings. Moreover, the Board advises that additional information sources be consulted in cases where any concern
may exist about statistics or any other information contained within the minutes.
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Contents
Purpose 1
Welcome, Member Roll Call, and Greenhouse Gas Reduction Fund 1
Opportunity Zones Workgroup Presentation and Discussion 2
Pollution Prevention Finance Workgroup Presentation and Discussion 3
Recap and Wrap Up 6
Adjourn 6
Appendix 1. Federal Register Announcement 7
Appendix 2. Agenda 8
Appendix 3. EFAB Members 9
Appendix 4. Draft Opportunity Zones Recommendations 10
Appendix 5. P2 Presentation 18
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 1
Purpose
The U.S. Environmental Protection Agency (EPA) Financial Advisory Board (EFAB or Board) is an advisory
committee chartered under the Federal Advisory Committee Act (FACA) to provide advice and
recommendations to EPA on creative approaches to funding environmental programs, projects, and
activities. The purpose of the meeting is for the Opportunity Zones and Pollution Prevention
Workgroups to present their draft deliverables to EFAB and solicit feedback on the drafts.
The meeting was announced in the Federal Register (see appendix 1). Please see appendix 2 for the
agenda.
Welcome, Member Roll Call, and Review of Agenda
Welcome
Designated Federal Officer (DFO) Edward (Ed) H. Chu welcomed attendees and reminded everyone that
the EFAB's meeting and materials are open to the public and all its materials are available online. He
noted the purpose of the meeting is to hear from the EFAB's Opportunity Zones workgroup and
Pollution Prevention workgroup and to offer feedback on their work products. He said there will be no
public comment period at this meeting and noted there were no written comments submitted. He
thanked EFAB members, EPA staff, and all others who made the meeting possible.
Ed Chu formally opened the meeting and turned the meeting over to the EFAB Chair, Kerry O'Neill, for
the roll call.
Roll Call
Members present
Members not present
Kerry E. O'Neill, Chair
Steven J. Bonafonte
Ashley Allen Jones
Angela Montoya Bricmont
Courtney Black
Janet Clements
Matt Brown
Zachary Davidson
Stacy D. Brown
Jeffrey R. Diehl
Theodore Chapman
Eric Hangen
Albert Cho
Edward Henifin
Lori Collins
Craig Holland
Sonja B. Favors
Cynthia Koehler
Phyllis R. Garcia
Joanne Landau
Barry Hersch
Lawrence Lujan
Craig Hrinkevich
Eric Rothstein
Margot M. Kane
Sanjiv Sinha
Tom Karol
Marilyn Waite
George W. Kelly
Gwen Yamamoto Lau
Gwen Keys Fleming
Colleen Kokas
MaryAnna H. Peavey
Dennis A. Randolph
William Stannard
Dave Wegner
David Zimmer
Tara Johnson, alternate DFO, confirmed a quorum.
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 2
Greenhouse Gas Reduction Fund
Ed Chu requested some time before moving into the agenda items. He noted that the Inflation
Reduction Act (IRA) allocated $27 billion to the Greenhouse Gas Reduction Fund and has an
implementation period of 180 days. He said EPA is very interested in leveraging these taxpayer dollars to
maximize greenhouse gas reductions. He noted that about $15 billion should target low-income and
disadvantaged communities with zero-emission technologies and other clean energy initiatives. The
agency is interested in EFAB's help with this challenge. Ed Chu said he would like to gauge EFAB member
interest in developing a charge related to this. If so, because of time constraints, he would like the EFAB
to form a small exploratory workgroup to begin working with the agency this week. Ed Chu opened the
matter to an expedient discussion and vote. He said that this would likely mean very intense work by the
new workgroup members and at least one, possibly two meetings, before the end of the calendar year.
Kerry O'Neill said some members have already expressed interest, and she iterated the intensity of work
required.
Ed Chu clarified that the group he is asking the Board to convene today would explore with the EPA
what the charge would look like. They would then come back to the full board for a vote on the draft
charge.
Ed Chu said that background information will be shared with the EFAB in the coming weeks. Kerry
O'Neill asked members who would like to be involved to reach out to Ed Chu or Kerry O'Neill. She asked
if members would be willing to vote now on forming the charge committee. Members voted by using
the Raise Hand feature or by voice; Tara Johnson counted the votes and announced that members voted
to form the workgroup.
Given the tight timeframe in which the funds need to reach communities, MaryAnna Peaway asked
workgroup members to consider existing programs, which already have the infrastructure in place to
administer funds efficiently and quickly.
Opportunity Zones Workgroup Presentation and Discussion
Margot Kane and William Stannard, workgroup co-chairs
This discussion concerned the draft recommendations prepared by the Opportunity Zones (OZ)
workgroup (see appendix 4), which was shared with members in advance of the meeting. Margot Kane
said the charge has evolved over the years and she is excited about its expanded scope on how EPA can
help communities with environmental justice (EJ) concerns leverage other investments in addition to the
OZ mechanism. She invited comments from Michelle Madeley or Jon Grosshans at EPA. Michelle
Madeley said the charge was formulated when there was a lot of discussion at EPA about OZ, and they
are excited about the way the charge morphed into thinking about EPA's role is supporting community
access to OZ funding and more. Jon Grosshans concurred, saying that takeaways from this work can be
applied to new opportunities coming up, such as those presented by the IRA discussion that opened this
meeting. Margot Kane said that recent EPA initiatives have dovetailed nicely with some of the
workgroup's recommendations, and she invited EPA and EFAB members to continue to send examples.
Margot Kane said the workgroup focused on EPA's unique role in supporting high-priority communities
(EJ communities, low-income communities, and communities of color) by setting preconditions and
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 3
seeding the ground for communities to determine what sources of private and public capital are best
suited for their initiatives. In this role, EPA can help these communities get to the point at which they
can access multiple sources of funding in addition to OZ capital. She thanked the expert panel, the
workgroup, and EPA for their input and examples, and she iterated that examples at the state and local
levels are especially welcome, as the workgroup had focused primarily on the federal level.
Bill Stannard highlighted EPA's role facilitating the development of community capacity to reach beyond
OZ funding opportunities. The ability of these communities to secure funding and reinvest in their
infrastructure will result in more resilient and sustainable environmental services to community
members. He opened the floor for questions and comments.
Dave Zimmer mentioned the State Revolving Fund (SRF) Program and said that, although state's have
the same authority, they don't all implement the program the same because of differing legal
frameworks as so on. He said his state (New Jersey) is already financing components of redevelopment
projects and it's not a stretch to expand the concept to apply to OZs and EJ communities. He added that,
in an enabling role, EPA can play a part decreasing risks for developers or increasing their return. He
added that, in New Jerseyin part because of the Bipartisan Infrastructure Lawfinancing through the
SRF can save up to 86% compared with financing through other mechanisms.
Dave Zimmer also noted the importance of bringing technical assistance (TA) to communities,
particularly EJ communities who may never have gone through a SRF process in the past. How do we
reach them? EPA can spearhead this on the federal level.
Margot Kane agreed that getting that early TA to communities that haven't benefitted from funding
opportunities in the past is crucial, and the federal government must leverage the networks and build
relationships to reach target communities and get them in the funding pipeline. This is behind the
workgroup's recommendation for EPA to work with intermediaries such as Environmental Finance
Centers (EFCs).
Bill Stannard added that the SRF processes are essential, and EFCs can help build community capacity
through pre-development TA as well as through other processes.
Kerry O'Neill reminded members that the draft is the near final version and in October the board will
vote on the final recommendations. Ed Chu urged members to review the draft and to be ready for a
vote on the draft at the October meeting.
Kerry O'Neill asked EFAB members to send any examples they want to share in writing so that the
workgroup can quickly incorporate them into to draft.
Poiiution Prevention Finance Workgroup Presentation and Discussion
Ashley Allen Jones, workgroup chair
Kerry O'Neill said a draft recommendation letter will be ready for the next meeting, but for now, the
workgroup will walk through the approach the Pollution Prevention (P2) workgroup used to get
information and feedback. (See appendix 5 for slides.)
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 4
For the benefit of EFAB's several new members, Ashley Allen Jones and EPA sponsor David Widawsky
reviewed the charge and the workgroup's approach. Ashley Allen Jones said the workgroup focused on
gaps in funding for pollution prevention projects in key sectors. She explained that the workgroup
grappled with four key questions pertaining to this issue and put together series of workshops that
allowed the workgroup to explore the questions with outside experts (see appendix 5, slide 3 for
details). She said the EFAB and EPA teams have been deeply engaged, which allowed the workgroup to
move quickly through the charge.
David Widawsky provided some background on EPA constructs and P2 program (see slide 4). He
explained that P2 is focusing on five industrial sectors because of their potential for impact. These
sectors are food and beverage; auto; aerospace, fabricated metals; and chemical processing and
manufacturing. Challenges include: how does EPA help companies identify pollution prevention
opportunities within their sectors, and how does it make sense from a business standpoint for
companies to take advantage of pollution prevention opportunities? Beyond cost questions, how do
companies successfully finance these opportunities?
David Widawsky noted that the timing for the P2 workgroup's recommendations is optimal because 71
pollution prevention grants are becoming active over the next couple of months. There will be a
workshop with grantees in December on how to support them. He said EFAB's recommendations will be
immediately applicable and valuable to the whole pollution prevention program at EPA.
Ashley Allen Jones shared that the workgroup looked at projects that had been funded through
community finance institutions, projects funded through collaboration with state programs and through
commercial enterprises, and they looked at qualities that allowed the projects to be funded. They
looked for cost efficiencies as well as performance enhancements. She iterated that they focused on
industries with big environmental footprints related to energy, water, and toxics because interventions
in these areas will have the highest return. When looking at the projects that would qualify for P2
funding, the workgroup observed that these often involved process management, materials
substitutions, manufacturing modifications, and resource recovery. Pollution prevention often means
replacing a process or technology at the manufacturing level.
Ashley Allen Jones then gave an overview the series of subject matter expert panels that the workgroup
convened and said that as a part of their deliverable she will share links to these workshops.
Based on the groundwork and EPA's current capacity to execute, the workgroup proposed the following
recommendations categorized as P2 grant program, education and training, and risk-reduction
mechanisms.
P2 Grant Program
Focus next round of P2 grants on grantees with expertise in relevant sectors for primary P2
finance opportunities and relevant capacities to advance P2 finance efforts [single industry or
group of industries with similar P2 issues]
Identify and support a cohort of regional P2 pilots that demonstrate robust partnerships for pre-
development support (technical assistance) and innovative funding relationships to serve as P2
"demonstration projects"
Ashley Allen Jones said although P2 is already a robust program, there is an opportunity to focus the
next round of grant on those with expertise in the sectors that have advanced some level of case studies
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 5
financial capacity and made some inroads into accessing capital. That could lead to a strategy that funds
cohorts, such as a strategy successfully deployed by USDA. Such a strategy could lead to cross-sector
collaboration.
Education/Training
Develop sector-based use cases for P2 financing (through grantees or consultants)
Develop a series of webinars on P2 success cases and factors contributing to success
(referencing workshop learnings)
EPA is already doing this, Ashley Allen Jones said, but also said there is an opportunity for EPA to fund
concrete, robust sector-specific case studies, which will be a large undertaking. Webinars could be a way
to convey P2 success stories so they understand what challenges exist and also how they can be
overcome.
Risk-Reduction Mechanisms
Launch technology certification program around priority interventions in one or two focus
sectors
Develop underwriting standards for P2 on specific waste streams within specific industries, in
conjunction with trade groups and technical experts
Explore use of existing and new credit enhancements/guarantee programs (e.g., EPA SRF, Small
Business Administration, U.S. Department of Agriculture, state-level programs, U.S. Department
of Education, etc.)
Ashley Allen Jones said that the next steps are to develop the formal letter. The workgroup will also
share its webinar recording, a resource package, and PowerPoint presentation.
Ed Chu expressed his appreciation for the expert webinars as an innovation to bring in perspectives from
outside the EFAB. He also thanked the EPA clients for their committed engagement.
Kerry O'Neill asked for any feedback for the workgroup before they draft the letter. Ed Chu noted they
could also take feedback offline. Kerry O'Neill said a draft letter will be shared with the full board before
the next meeting so there will be an opportunity to offer feedback then, as well.
Angela Bricmont thanked the committee for their work and said their work is foundational for other
charges.
Margot Kane suggested looking at value-chain work around financing solutions in food waste that ReFED
has created in conjunction with the private-, nonprofit-, and government-sectors for an ecosystem
approach.
Kerry O'Neill raised the need for specific ideas on where P2 grant dollars should go; the models could
then be promoted and replicated across sectors or geographies. EPA could be a funding partner for
some of these models.
Stacy Brown added that being more sector focused and ensuring that some standardization is in place
will make this easier to go forward. It's a broad topic, so narrowing down the focus will be essential to
making it a successful charge. If one sector can nail it down, other sectors can replicate.
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 6
George Kelly mentioned trying to understand embedded carbon savings and linkages with monies. He
asked if there is an opportunity link potential funding that aspect.
Ashley Allen Jones replied that the issue came up repeatedly, and that Martin Silcott (founder of
Manufacturer 2030) discussed how, in the automotive sector, original equipment manufacturers (OEMs)
are driving preferential supplier financing and treatment. Carbon Is a big opportunity.
Ed Chu said, with respect to greenhouse gas reduction fund, that will be a significant issue. In addition to
accountability for spending, we'll have to demonstrate that the billions in spending are reducing
greenhouse gases.
Kerry O'Neill thanked the workgroups for their efforts.
Recap and Wrap Up
Ed Chu reminded members to get back to them about the greenhouse gas exploratory workgroup.
Secondly, he said they are planning to hold a hybrid meeting in Denver in October.
Adjourn
Ed Chu closed the meeting.
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 7
Appendix 1. Federal Register Announcement
8?
Federal Register/Vol. 87, No. 169/Thursday, September 1, 2022/Notices 53743
Description: § 205(d) Rate Filing:
Decommissioning Cost Reimbursement
Agreement with Pawtucket to be
effective 7/26/2022.
Filed Date: 8/26/22.
ylccession Number: 20220826-5143.
Comment Date: 5 p.m. ET 9/16/22.
Docket Numbers: ER22-2733-000.
Applicants: Black Mesa
Interconnection, LLC.
Description: Baseline eTariff Filing:
Amended and Restated Shared Facilities
Agreement to be effective 10/26/2022.
Filed Date: 8/26/22.
Accession Number: 20220826-5146.
Comment Date: 5 p.m. ET 9/16/22.
The filings are accessible in the
Commission's eLibrary system [https://
elibrary.ferc.gov/idmws/search/
fercgensearcb .asp) by querying the
docket number.
Any person desiring to intervene or
protest in any of the above proceedings
must file in accordance with Rules 211
and 214 of the Commission's
Regulations (18 CFR 385.211 and
385.214) on or before 5:00 p.m. Eastern
time on the specified comment date.
Protests may be considered, but
intervention is necessary to become a
party to the proceeding.
eFiling is encouraged. More detailed
information relating to filing
requirements, interventions, protests,
service, and qualifying facilities filings
can be found at:http://www.ferc.gov/
docs-filing/efiling/filing-req.pdf. For
other information, call (866) 2083676
(toll free). For TTY, call (202) 502-8659.
Dated: August 26, 2022.
Kimberly D. Bose,
Secretary.
[FR Doc. 2022-18949 Filed 8-31-22; 8:45 am]
BILLING CODE 6717-01-P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[P-14803-001]
Klamath River Renewal Corporation;
PacifiCorp; Notice of Availability of the
Final Environmental Impact Statement
for the Surrender, Decommissioning,
and Removal of the Lower Klamath
Hydroelectric Project
In accordance with the National
Environmental Policy Act of 1969 and
the Federal Energy Regulatory
Commission's (Commission)
regulations, 18 CFR part 380, the Office
of Energy Projects has reviewed the
application for surrender of license and
removal of project works for the Lower
Klamath Hydroelectric Project No.
14803 and has prepared a final
environmental impact statement (EIS).1
The project is located on the Klamath
River in Klamath County, Oregon, and
in Siskiyou County, California. The
project occupies approximately 400
acres of federal lands. These federal
lands are administered by the U.S.
Department of the Interior, Bureau of
Land Management (BLM).
The final EIS contains staff
evaluations of the applicant's proposal
and the alternatives for surrender of the
Lower Klamath Project. The final EIS
documents the views of governmental
agencies, non-governmental
organizations, affected Indian Tribes,
the public, the applicants, and
Commission staff.
In this notice, we acknowledge the
number of pages in this final EIS
exceeds the final EIS page limits set
forth in CEQ's Final Rule for proposals
of unusual scope or complexity. Noting
the scope and complexity of this
proposal, the Director of the Office of
Energy Projects, as our senior agency
official, has authorized this page limit
exceedance for the final EIS.
In addition to publishing the full text
of this document in the Federal
Register, the Commission provides all
interested persons with an opportunity
to view and/or print the final EIS via the
internet through the Commission's
Home Page [http://www.ferc.gov/], using
the "eLibrary" link. Enter the docket
number, excluding the last three digits
in the docket number field, to access the
document. At this time, the Commission
has suspended access to the
Commission's Public Reference Room,
due to the proclamation declaring a
National Emergency concerning the
Novel Coronavirus Disease (COVID19),
in a Presidential proclamation issued on
March 13, 2020. For assistance, contact
FERC Online Support at
FERCOnlineSupport@ferc.gov, or toll-
free at (866) 208-3676, or for TTY, (202)
502-8659.
Additional information about the
project is available from the
Commission's Office of External Affairs,
at (866) 208FERC, or on the FERC
website (www.ferc.gov) using the
eLibrary link. The eLibrary link also
provides access to the texts of all formal
documents issued by the Commission,
such as orders, notices, and
rulemakings.
1 On April 20, 2022, the Council on
Environmental Quality (CEQ) issued a final rule,
National Environmental Policy Act Implementing
Regulations Revisions (Final Rule, 87 FR 23453),
which was effective as of May 20, 2022.
Accordingly, Commission staff prepared this EIS in
accordance with CEQ's new regulations.
In addition, the Commission offers a
free service called eSubscription that
allows you to keep track of all formal
issuances and submittals in specific
dockets. This can reduce the amount of
time you spend researching proceedings
by automatically providing you with
notification of these filings, document
summaries, and direct links to the
documents. Go to https://www.ferc.gov/
ferc-online/overview to register for
eSubscription.
Dated: August 26, 2022.
Kimberly D. Bose,
Secretary.
[FR Doc. 2022-18945 Filed 8-31-22; 8:45 am]
BILLING CODE 6717-01-P
ENVIRONMENTAL PROTECTION
AGENCY
[FRL-10175-01-OW]
Notice of Public Meeting Webinar of
the Environmental Financial Advisory
Board (EFAB)
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Notice of public meeting
webinar.
SUMMARY: The Environmental Protection
Agency's (EPA) Environmental
Financial Advisory Board (EFAB) will
hold a public meeting webinar. The
purpose of the webinar will be for the
Opportunity Zones and Pollution
Prevention Workgroups to present their
draft deliverables to EFAB and solicit
feedback on the drafts. The meeting will
be shared in real-time via webinar and
public comments may be provided in
writing in advance.
DATES: The webinar will be held on
Tuesday, September 20, 2022 from 1
p.m. to 2:30 p.m. (Eastern Time).
ADDRESSES: The meeting will be
conducted via webinar only and is open
to the public. Interested persons must
register in advance at the weblink below
to access the meeting.
FOR FURTHER INFORMATION CONTACT: Ed
Chu, the Designated Federal Officer, via
telephone/voice mail at (913) 551-7333
or email to efab@epa.gov. General
information concerning the EFAB is
available at https://www.epa.gov/
waterfinancecenter/efab.
SUPPLEMENTARY INFORMATION:
Background: The EFAB is an EPA
advisory committee chartered under the
Federal Advisory Committee Act
(FACA), 5 U.S.C. app. 2, to provide
advice and recommendations to EPA on
innovative approaches to funding
environmental programs, projects, and
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 8
Appendix 2. Agenda
U.S. Environmental Protection Agency
Environmental Financial Advisory Board
Public Webinar
Location: Virtual via Zoom
September 20, 2022
1:00-2:30 pm Eastern Time
1:00 pm
WELCOME, MEMBER ROLL CALL, & REVIEW OF AGENDA
Edward H. Chu - EFAB Designated Federal Officer
Kerry O'Neill - EFAB Chair
1:15 pm
OPPORTUNITY ZONES WORKGROUP PRESENTATION
Margot Kane and William Stannard, workgroup co-chairs
1:30 pm
OPPORTUNITY ZONES QUESTIONS AND DISCUSSION
1:50 pm
POLLUTION PREVENTION FINANCE WORKGROUP PRESENTATION
Ashley Allen Jones, workgroup chair
2:05 pm
POLLUTION PREVENTION FINANCE QUESTIONS AND DISCUSSION
2:25 pm
RECAP & WRAP-UP
Edward H. Chu - EFAB Designated Federal Officer
Kerry O'Neill-EFAB Chair
2:30 pm
ADJOURN
*Discussion and Q&A with the Board will take place after each guest presentation
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 9
Appendix 3. EFAB Members
U.S. ENVIRONMENTAL PROTECTION AGENCY ENVIRONMENTAL
FINANCIAL ADVISORY BOARD
Edward H. Chu, Designated Federal Officer
Kerry E. O'Neill (Chairperson), Inclusive Prosperity Capital, Inc., Stamford, Connecticut
Ashley Allen Jones, \2 Capital, Washington, D.C.
Courtney L. Black, City of Kent, Kent, Washington
Steven J. Bonafonte, The Metropolitan District of Hartford, Hartford, Connecticut
Angela Montoya Bricmont, Denver Water, Denver, Colorado
Matthew T. Brown, District of Columbia Water and Sewer Authority, Washington, D.C.
Stacy D. Brown, Freberg Environmental, Inc., Denver, Colorado
Theodore Chapman, Hilltop Securities Inc., Dallas, Texas
Albert Cho, Xylem Inc., Washington, D.C.
Janet Clements, One Water Econ, Loveland, Colorado
Lori Collins, Collins Climate Consulting, Charlotte, North Carolina
Zachary Davidson, Ecosystem Investment Partners, Baltimore, Maryland
Jeffrey R. Diehl, Rhode Island Infrastructure Bank, Providence, Rhode Island
Sonja B. Favors, Alabama Department of Environmental Management, Montgomery, Alabama
Phyllis R. Garcia, San Antonio Water System, San Antonio, Texas
Eric Hangen, Center for Impact Finance at the Carsey School of Public Policy, University of New
Hampshire, Danby, Vermont
Edward Henifin, Hampton Roads Sanitation District (retired), Virginia Beach, Virginia
Barry Hersh, New York University, New York, New York
Craig Holland, The Nature Conservancy, Arlington, Virginia
Craig A. Hrinkevich, Robert W. Baird & Company Inc., Red Bank, New Jersey
Margot M. Kane, Spring Point Partners LLC, Philadelphia, Pennsylvania
Thomas Karol, National Association of Mutual Insurance Companies, Washington, D.C.
George W. Kelly, Earth & Water Strategies, Denver, Colorado
Gwen Keyes Fleming, DLA Piper LLP, Washington, D.C.
Cynthia Koehler, WaterNow Alliance, San Francisco, California
Colleen Kokas, Environmental Liability Transfer, Inc., Lahaska, Pennsylvania
Joanne Landau, Kurtsam Realty Corp., Croton-on-Hudson, New York
Lawrence Lujan, Taos Pueblo Utility Service, Taos, New Mexico
MaryAnna H. Peavey, Idaho Department of Environmental Quality, Boise, Idaho
Dennis A. Randolph, City of Kalamazoo, Kalamazoo, Michigan
Eric Rothstein, Galardi Rothstein Group, Chicago, Illinois
Sanjiv Sinha, Environmental Consulting & Technology Inc., Ann Arbor, Michigan
William Stannard, RAFTELIS, Kansas City, Missouri
Marilyn Waite, Climate Finance Fund, Washington, D.C.
David Wegner, National Academy of Sciences, Tucson, Arizona
Gwen Yamamoto Lau, Hawaii Green Infrastructure Authority, Honolulu, Hawaii
David Zimmer, New Jersey Infrastructure Bank, Lawrenceville, New Jersey
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 |
Appendix 4. Draft Opportunity Zones Recommendations
DRAFT Page 1 of 8
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
Members
Keriy O'Neill, Chair
Ashley Allen Jones
Courtney L. Black
Steven J. Bonafonte
Angela Montoya Bricmont
Matthew T. Brown
Stacy Brown
Theodore Chapman
Albert Cho
Janet Clements
Lori Collins
Zachary Davidson
Jeffrey R. Diehl
Sonja B. Favors
Phyllis Garcia
Eric Hangen
Edward Henifin
Barry Hersh
Craig Holland
Craig A. Hrinkevich
Margot Kane
Thomas Karol
George W. Kelly
Gwendolyn Keyes Fleming
Cynthia Koehler
Colleen Kokas
Joanne V. Landau
Lawrence Lujan
MaryAnna H. Peavey
Dennis A. Randolph
Eric Rothstein
Sanjiv Sinha
William Stannard
Marilyn Waite
David L Wegner
Gwen Yamamoto Lau
David Zimmer
Designated Federal
Officer
Edward H. Chu
September 16,2022
The Honorable Michael S. Regan
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, D.C. 20460
Dear Administrator Regan:
The Environmental Financial Advisory Board ("EFAB") was engaged by the Office of Policy on the
topic of potential roles for EPA in attracting private investment to Opportunity Zones. EFAB took
up a Charge on this topic at its February 11-13,2020 meeting and further refined the Charge at its
April 20-20, 2021 meeting. EFAB's scope of work for the Charge included:
Facilitating Investment (Marketplace/Matchmaking): Advise EPA on how to enhance the
Agency's approach to encourage increased Opportunity Zone ("OZ") funds investment
into both rural and urban communities alongside existing EPA funding tools, programs,
regulatory/permitting flexibility and federal and state partners.
Provide examples and advice and support to communities, including ways to minimize risk
for investors, and to investors seeking to direct OZ Fund investment into low-income,
minority, and/or otherwise vulnerable communities, reflecting environmental justice
principles. Note where community benefits standards and guidance have been developed
[or are so far lacking] that may be relevant to OZ-funded projects in these communities
and the value of such community benefits can be achieved.
Provide recommendations on where EPA may uniquely be situated to coordinate with
investors and other agencies in encouraging/identifying OZ investment opportunities in
high-priority communities from an environmental justice standpoint, including low-
income, minority, tribal, and indigenous communities that bear disproportionate
environmental risks and damages.
This letter provides advice, examples and recommendations on how EPA can facilitate attracting
more private investment to communities that qualify for investment under the OZ program.
Executive Summary
By definition, communities designated as OZs have a high degree of overlap with people of color,
low-income, and indigenous communities as well as communities with Environmental Justice
("EJ") concerns, and as such these communities are eligible for a range of public funds from
various agencies, particularly HUD, and subsidized private capital enabled programs such as NMTC
investment and USDA and SBA guarantees.
Many of our communities encounter barriers to accessing all of these sources of capital, inclusive
of OZ capital. Frequently, these barriers are non-financial, such as staff capacity, planning
resources, access to technical vendors (particularly for smaller projects), and underdeveloped
Creative Approaches to Funding Environmental Programs, Projects, and Activities
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 11
DRAFT Page 2 of 8
networks. These barriers exacerbate challenges already present as financial barriers for many
communities, such as limited borrowing capacities and shrinking ratepayer bases.
In the EFAB's deliberations regarding the OZ Charge from EPA, including conversations with practitioners
managing OZ funds (see Appendix), it became clear that the areas under EPA's purview could uniquely
help address certain of these barriers in order to enable both private and public capital to flow to these
communities. Asa tactical matter, given the uncertainty around the permanence of the OZ tax benefits,
it is prudent to plan for any action on behalf of the EPA in such a way to create better enabling
conditions for as wide a selection of capital as possible, in order to increase long-term access and
supports for low-income, people of color and/or indigenous communities and communities with EJ
concerns, hereinafter referred to also as "high priority" communities. Additionally, given the scope of
programs and activities both at federal and state levels and when EPA resources tend to be deployed by
communities in project development, it would be challenging and potentially inappropriate for the EPA
to play a "matchmaking" role with private investors managing OZ funds. EPA's primary role and
expertise is as a regulator and as an overseer of various environmental grant and low-cost financing
programs.
Better for private investors and / or interested OZ communities to approach the EPA and its grant and
loan program state partners for assistance migrating regulation hurdles and requirements and for
seeking technical assistance optimizing EPA's grant and low-cost financing program opportunities.
Nevertheless, the EPA has an impactful role to play in a number of areas by investing in communities'
planning and fundraising capacities, grant funding for environmental remediation and project
predevelopment, data collection and aggregation around OZ-funded projects with other agencies, and
preferential terms and treatment under existing financing programs. These investments can strengthen
the capacity of communities to access not only OZ funds but a wider range of private and public sources
of investment capital for key development and infrastructure projects. As the expert panel indicated, all
of these activities also meaningfully reduce risk for private investors who may later invest in community
projects enabled by these activities.
In summary, given uncertainty around OZ longevity, the EFAB team recommends that the EPA examines
its existing activities, programs and tools with an eye towards improvements that specifically benefit
high priority communities more broadly, in lieu of creating new programs, resources or funding sources
tailored specifically to OZ funding sources, and which changes can be implemented relatively quickly,
with limited administrative complications. One recent example of this is the Fiscal Year 2023 Brownfield
Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Grants announcement, wherein the EPA
was able to remove matching requirements due to additional funding from the Bipartisan Infrastructure
Law.
Focusing on predevelopment, technical assistance, and planning capacity will reduce project and
investor risk, while also providing necessary supports to under-resourced communities both urban and
rural. As the EPA's existing programs are generally more flexible than other agency sources for project
funding, continuing to value and expand that flexibility to encourage high priority communities to
develop project capacity, and ensuring EPA programs enable or don't conflict with less flexible funding
sources from other agencies, is a uniquely impactful role for the agency. Finally, a collaborative and
interagency approach to data gathering and sharing can be emphasized in order for community benefits
to be better captured and communicated both from OZ-funded projects as well as other projects with
multiple federally subsidized funding sources in high priority communities.
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DRAFT Page 3 of 8
We highlight the successful partnership the EPA formed with FEMA to produce a Memorandum of
Understanding regarding hazard mitigation funds and SRF funds, and the recently announced
partnership with US DA, "Closing America's Wastewater Access Gap Community Initiative," as examples
of the collaborative interagency possibilities.1
The EPA's Unique Role: Focus on Enabling Conditions
An evident barrier to accessing private investor capital, including OZ funds, is having met the baseline
conditions for private capital to flow: completed and approved plans, environmental remediation
completed, permits obtained, zoning addressed, utility infrastructure availability, technical vendors (e.g.
engineering) procured and, especially in the west, sufficient water rights/access. Since these are
preconditions before a dollar of private capital will commit to any project, communities must have the
resources to address these before even soliciting investors. In addition, from the community
perspective, a lack of awareness and understanding of the direct, indirect, and induced community
benefits related to OZ projects which can support communities from a broader economic stand point, as
well as enhancing necessary infrastructure reliability and sustainability, can limit their interest for
pursuing OZ funds and projects in favor of other funding sources. Funding capacity development within
disadvantaged and overburdened communities can facilitate long lasting benefits and further leverage
the OZ objectives.
Examples of enabling actions within EPA's existing purview could include:
PREDEVELOPMENT& CAPACITY BUILDING
~ Providing increased flexible grant funds for planning development projects (inclusive of
hiring the human resources necessary to do so), and inclusive of funds to support
community outreach and genuine engagement.
~ Identifying and addressing environmental remediation issues high priority communities
before "shovel readiness" or planning is fully complete, including potentially providing
grant funds for the execution and development of a remediation action (mitigation) plan.
~ Sharing a "shovel-worthy" checklist with potential funding sources and estimated
timelines attached to each element - so communities are aware of the preconditions
needed before investor dollars can be attracted to a project
PRIORITY ALLOCATIONS OF LARGE FUNDI NG PROGRAMS AT STATE LEVEL
~ Prioritizing applications for SRF loans with principal forgiveness, WIFIA funds, and
Brown field remediation grants for high priority communities that also qualify for OZ, USDA
and NMTC funds (which is already in evidence in aligning funding with the Justice40
initiative).
~ Enabling SRF loans to include high priority communities to secure professional services to
conduct planning foroff-site infrastructure in support of OZ development projects to
enhance related community benefits.
1 https://www.cpa.gov/iiewsreleaxcs/bideii4iaiTis-adnmiislratioiiJaimdies-epa-iisda-|)arUricisliip-|)rovidc-
wastewater
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DRAFT Page 4 of 8
INTERAGENCY COLLABORATION AND AWARENESS
~ Education of local public officials around the available sources of capital across agencies
and guidance on applying (USDA, HUD, etc.) - for example, adding to the Community
Calendar Application information around relevant HUD grant application timelines that
most commonly overlap with community projects
~ Collaborating with HUD, Treasury, and other agencies on a reference database for
communities to access examples of other successful OZ-funded projects, or if this is not
readily available:
o EPA could instead expand upon its OZ "case study" library to provide several case
studies that showcase common funding sources & timelines for OZ projects - ideally
those that happened in communities with El concerns-with an emphasis on the
best "matching" funding sources (e.g. twinning tax credits, grant sources)
o Expand case studies to include discussion of direct and indirect community benefits
resulting from OZ investments - however, without improved data available on OZ-
funded projects, this may be limited only to anecdotal information
o Collaborate on comprehensive guidance to assist communities in identification of
community benefits that can be derived from an OZ-funded development and the
funding available to leverage OZ projects to enhance water and wastewater
infrastructure rehabilitation, while limiting adverse affordability impacts
~ Actively encourage interagency working groups to discuss funding program compatibility
and areas of friction across fundingsources available to high priority communities. This
requires a "silo-busting," collaborative approach and flexibility that EPA maybe uniquely
positioned to encourage among agencies and has already demonstrated capacity around in
partnerships mentioned above with FEMAand USDA, for example.
We recognize there are many competing priorities and workloads underway at the EPA. In order to
implement any of the above recommendations over time, we suggest prioritization of activities in the
following order.
Begin with alignment with other public funding sources
It should be noted that none of the above is possible without first aligning EPA funding eligibility
criteria with other agency definitions of high-priority communities with EJ concerns to maximize the
range of funding sources made available to these communities and proactively identify where there
is friction between these funding sources. Such alignment should include communities with EJ
concerns in existing funded initiatives at the federal level as identified in the Infrastructure Bill and
Inflation Bill (e.g. Justice40.) The recent Brownfields grant announcement for FY23 is a successful
example of aligning existing EPA resources with increased federal resources and prioritizing
communities that are most likely to also be eligible for various subsidized investment streams such
as OZ funding. Given the extensive array of multiple local, state, and federal grant and investment
programs available to communities today, guidance notes from the EPA on how to access certain
funding sources alongside other federal or state programs, for example where match requirements
can be met across funding streams, could be a worthwhile project led by EPA/DEP offices at the
state level.
2 liUps://wwwe|Rig(w/;!nu[tVq>ii-ca!ciidar--coiiiinimity-graj[ts
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DRAFT Page 5 of 8
Make incremental updates to existing grant and predevelopment EPA funding programs
One of the differentiating benefits the EPA uniquely enjoys is its flexibility in its grant programs -TA
and predevelopment grants specifically-which are the first resources that communities need to get
projects off the ground. These resources are particularly valuable when projects are also funded by
larger but more rigidly constructed programs ru n by other agencies. In terms of prioritization of
recommendations, EPA might consider updates to existing programs like TAG, EJSG, OLEM, etc. in
ways that support priority access to these funds for high priority communities and ensure uses of
funds include capacity, planning, and other hard-to-finance predevelopment activities.
As the expert panel indicated, many communities will struggle to attract OZ and other private
funding because they lack the basic infrastructure (water, sewer, etc.) to support such projects.
Various federal programs have offered funds for different phases of work related to infrastructure
engineering and construction. However, it is difficult to navigate the federal funding process to
obtain funding that would support the work from preliminary engineering to design to construction
management and construction as these all tend to be housed in separate programs (and thus,
applications). The recent Infrastructure and Jobs Act's philosophy guiding the allocation of funds has
provided a potential solution in the Department of Transportation's ("DOT") RAISE grant program,
which encouraged communities to develop applications that stack funds from various component
programs. Stacking grants for planning, predevelopment, construction, and so on through the life of
a project can provide a community with funding from start to finish, reduce speculative risk in
infrastructure development, and meet holistic infrastructure needs of both communities and
developers seeking to invest private capital. Critically, to enable communities to think holistically
about project funding needs, DOT delegated support to its divisions, rather than funneling all its
funds through State DOTs, avoiding a layer of complexity to the program.
Consider significantly increasing funding for Environmental Finance Centers ("EFCs") and similar
regional intermediaries.
EFCs have a sense of community needs and planned projects, as well as experience helping
communities access multiple funding sources for projects both public and private. Additionally,
they are positioned to have relationships in place with private sector capital and can coordinate
between State-level EPA/DEP offices and private sector investors. Increasing funding for EFCs should
also reflect their relationships with high priority communities per the first action recommended
above. EFCs could additionally function as the front I ine of targeted EPA grant programs for
community-led predevelopment work in redevelopment projects. One example of this is the EPA's
2021 grant award to the Southwest Environmental Finance Center ("SEFC") to work with improving
small public water systems across the country.3
Conclusion
We thank the EPA for the opportunity to provide advice, examples and recommendations on how EPA
can facilitate attracting more private investment to low-income, people of color, and indigenous
communities and communities with EJ concerns.
Sincerely,
3 https://www.bizjoumals.com/albuquerque/news/2021/05/21/unrn receives^pa grant funding.html
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DRAFT Page 6 of 8
^/yuV
Kerry E. O'Neill, Chair
Environmental Financial Advisory Board
Margot M. Kane and William Stannard, OZ Working Group Co-Chairs
Environmental Financial Advisory Board
Enclosure
cc: Edward Fl. Chu, Designated Federal Officer, Environmental Financial Advisory Board
Radhika Fox, Assistant Administrator for Water
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DRAFT Page 7 of 8
APPENDIX
U.S. Environmental Protection Agency Environmental Financial
Advisory Board
Opportunity Zones Workgroup Practitioner Panel
Virtual Public Meeting via Zoom
Thursday, August 26 - 12:00-1:30 pm Eastern Time
Executive Summary
Purpose: To hear from Opportunity Zones (OZ) practitioners who work on OZ investments in
disadvantages communities across the country and were willing to share their experiences to support
the EFAB Opportunity Zones workgroup's charge.
Panelists: Diverse selection of OZ fund managers based in the Southwest, Mid-Atlantic, and Northeast
whose work reflects EPA interests (e.g., rural and disadvantaged communities, investments in operating
businesses, housing, and mixed-use real estate under OZ requirements).
Alecia Hill - Investment Associate, Enterprise Community Investment, Inc.
Jonathan D. Tower - Managing Partner, Arctaris
Stephanie Copeland - Managing Partner, Four Points Funding
Key Insights & Takeaways
Pre-conditions to potential investment(s):
o Access to and understanding of soft costs (e.g., planning, predevelopment, and risk
assessment at the community level) - Historically marginalized communities may lack
awareness of their environmental risk in planning projects,
o Adequate water infrastructure, quality, and access - Water rights are sometimes
requested by communities before developers are granted permits. These issues cannot
be left until later stages in project development, such as arranging financing. Investors
won't take these risks and are sensitive to what the delay(s) addressing them will cost,
o Community buy-in - Proposed projects should reflect community priorities and have
active support from key stakeholders, including those frequently underrepresented.
On government involvement:
o Federal agencies and sources, notably HUD, ARPA, and SSBCI, have successfully paired
existing financing and grant products with OZ-qualifying projects and investors,
o Government funding sources at the project level can add so many requirements that
appreciation is suppressed, especially for smaller scale projects in rural settings,
o Consistent communication and streamlined processes are key.
On community role:
o Prospectuses are insufficient for investors because they don't capture the complexity of
project risks. A more predictable environment for investors to enter is needed,
o Communities should be informed of the risks investors and developers are taking too.
OZ can make infrastructure payback faster-The structure of OZ investment funds enables them
to recognize a faster ROI on infrastructure investments and pay for deferred maintenance
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DRAFT Page 8 of 8
thanks to accelerated depreciation, which may be useful for communities who seek investment
in water/wastewater infrastructure.
~ Additional uncertainty (e.g., census tract changes, timeline for certain tax incentives) can
depress investor appetite.
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 18
Appendix 5. P2 Presentation
*>EPA
Environmental Financial Advisory Board
Engagement with the Office of Pollution Prevention & Toxics:
Strategies to Expand Funding and Financing for OPT
Pollution Prevention Projects
EFAB Briefing - 9.20.2022
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Project Leadership & Working Group
Kerry O'Neill,
CEO, New Prosperity
Capital; Chair, EFAB
Ashley Allen Janes,
Founder & CEO, i2 Capital,
Chair, EFAB P2 Workgroup
Ed Chu, EFAB
Designated Federal
Officer; Deputy
Regional Administrator,
EPA Region 7
Tara, Johnson, EFAB
Alternative Designated
Federal Officer; EPA
Water Finance Center
David Widawsky,
Ph.D. - Division
Director, EPA Office of
Chemical Safety and
Pollution Prevention
Pollution Prevention Workgroup Members
EPA Project Workgroup Members
Kerry O'Neill, CEO, New Prosperity Capital
Ashley Allen Jones, Founder & CEO, i2 Capital
Stacy Brown , President and CEO, Freberg
Environmental
Craig Hrinkevich, Managing Director, Baird
Chris Meister, Executive Director, Illinois
Finance Authority (EFAB Term Expired 7/2022)
David Widawsky, Director, EPA OCSPP
Alison Kinn Bennett, Senior Advisor, USEPA Office
of Pollution Prevention and Toxics
Andrew Wynne, Project Coordinator, USEPA Office
of Pollution Prevention and Toxics
Tim Larson, President, Ross Strategic
Martha Sheils, Director, New England
Environmental Finance Center
Laura Harwood, Vice President, Eastern Research
Group
Cena Swisher, Senior Manager, Eastern Research
Group
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 19
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Pollution Prevention Charge
Problem
Gaps in funding for P2 projects for
SMEs
Key Questions
What challenges do SMEs face in
attracting P2 lenders?
What financing approaches that
address P2 opportunities?
What the role that EPA might play
to facilitate access to private
capital for P2 projects?
Do models and extension
programs exist that could be
employed to expanding financing
for P2 projects?
9/19/2022
Approach
Orchestrate a series of workshops
with finance sector experts to
explore key questions
Develop a set of concrete
recommendations for EPA's P2
Program that expand access to
financing
Timeline
November 2021-October 2022
EFAB Charge: Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Tbxics
Office of Chemical Safety and Pollution Prevention - OCSPP
WASTE MANAGEMENT HEIRARCHY
The Waste Management Hierarchy
wmw
Pollution Prevention
(Source Reduction)
EXPLORE: BARRIERS TO FINANCING
Food/Beverage
Auto,
Aerospace,
Fabricated
metals,
Chemicals
1
ADDRESS
CHALLENGES/OPPORTUNITIES
How could different
financing structures and
models increase
financing?
How would a sector-
based approach to
manufacturers inform
economies of scale in
financing?
How could EPA best
support expansion of
financing and assistance
programs?
NetZero; Supply Chain Sustainability
i _ | *
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 20
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
EPA Source Reduction Examples
Financing Model
CDFI - Craft3: loans to transition from dry
cleaning to wet cleaning combined with State
Equipment Replacement Voucher Program =
elimination of hazardous chemicals
State Program - Michigan Small Business P2:
loan to transition conventional imaging to
digital radiology in medical industry reduced
hazardous liquid waste and solid waste
Commercial Financing: loans to support
installation of plural component surface coating
in aerospace and automotive industries =
reduced labor, product purchases, waste
generation and disposal costs (est 1.5 year ROI)
EFAB Charge: Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Tbxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Scope of market
Trends in finance for SMEs
Major gaps in finance sector
P2 Finance equation
- Focus sectors reflect industries with high
environmental footprints related to energy, water
and toxic chemical releases
- Identified/quantified impacts to air, water and
biodiversity including broad natural
resource/climate challenges and more specific
human health issues
- Well understood technology/process change with
clear budget parameters
- Identified increase in free cash or decrease in
enterprise risk to justify expenditures and support
underwriting
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 21
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
P2 Definition
What is definition of "pollution
prevention" for this project ?
s Any practice that reduces,
eliminates, or prevents pollution at its
source prior to recycling, treatment or
disposal (energy, water, chemicals,
other inputs to manufacturing).
S Reducing the amount of pollution
produced = less waste to control, treat,
or dispose of. Less pollution means
fewer hazards posed to human health
and the environment.
/ Sustainable supply chains, products,
and services are growing market
opportunities.
Impacts to: Water, Air, Climate, Land =
Long-Term Biodiversity + Human Health
9/19/2022
& Approach
EPA P2 Project Types
Process Management
Materials Substitution
Manufacturing Modifications
Resource Recovery
Current EPA P2 Programs
P2 Technical Assistance Grants to
National Emphasis Areas
Highlight Best Practices
Engage Businesses, Facilities,
Organizations, Federal Partners
Environmental & Cost Savings Metrics
Reductions in hazardous releases and
hazardous inputs (pounds)
Reductions in metric tons of carbon dioxide
equivalent: MTC02e
Reduced water consumption (gallons)
Cost savings associated with reducing energy,
water, disposal of hazardous waste, MTC02e
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Three Finance Forums Convened
Goal: assess barriers to and opportunities for increased financing ofSME sustainability
efforts to support EPA P2 programmatic strategies and products
9/19/2022 S
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 22
Pollution Prevention Finance Forum #1
Perspectives on Risks and Potential Financing Models & Tools
Matt McKenna, Executive in F
Georgetown McDonough
School of Business
Rural Opportunity Initiative
Jeremy Gilpin, Executive Vice President
Greater Commercial Lending
Aldric Seguin, Managing Partner
Global Sustainable Future
Kelsie Bouchard, Portfolio Manager
I Coastal Enterprises, Inc.
Major issue: credit risk - comprised of (i) company
level P&L factors, (iij technology risk, (iii) lack of clarity
in cost savings and ROI on projects
Sector level credit risk-comprised of (i)
fragmentation, (ii) business growth characteristics, (iii)
lack of transparency about nature and level of
challenge (e.g. toxic waste disposal)
Easiest mechanisms to reduce credit risk: loan
guarantees, tax advantaged lending (examples USDA
loan guarantees and Rural Business Investment Cos;
SBA loan guarantees and SBA Small Business
Investment Cos.) Allows private sector to operate with
credit that would typically be outside its scope
Potential to structure financing more effectively using
"shared service" or "shared savings" models (ESCOs)
or innovative fee-based models (CPACE, etc.)
Potential to address technology risk through
certification, information sharing, sector-based
campaigns with established technologies.
Select CDFIs work deeply within communities to
address credit risk in unaerserved markets and
priority economic sectors. Establish relationships with
technical assistance organizations and technology
experts and to help mitigate risk
Key takeaway:
9/19/2022
"EPA should focus on reducing the risk of the credit risk profile of the user"
Pollution Prevention Finance Forum #2
Deep Dive on Specific Tools and Approaches
Consumer & Furniture
Brad Fletcher, Vice President &
Treasurer, Illinois Finance
Authority
Bert Hunter, Executive Vice
President and Chief Investment
Officer, CT Green Bank
Standards and 3rd party certifications can mitigate
risks for financial community through clarifying
terms, scope, metrics, and measurements, and
enabling benchmarking; credible entity standing
behind organization to confirm technology strategy.
Circularity portfolio: UL3600 includes waste aversion
validation at a site or across a supply chain to support
"circularity of a companies material flow."
C-PACE (Commercial Property Assessed Clean Energy
Program): used across 30 states - counties and
municipalities impose standardized, voluntarily
"requested special assessment liens" on behalf of
property owners. Supports equipment that is
permanently affixed to buildings, with
financial/collateral ties to plant infrastructure.
Green Banks: provide financing to private property
and business owners to increase energy efficiency of
property; 15-year financing. Lend alongside
commercial capital."
Examples: SME energy efficiency portfolio funded
through utility program @ 0% interest; Solar Power
Purchase Agreement Program simplifies and reduces
cost to deploy solar; loan loss reserve program for
primary lenders (e.g. E-Loan provides second loss
guarantee to lenders).
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 23
Pollution Prevention Finance Forum #3
Corporate Strategy, Partnerships & Distribution Networks
3 . '
^ | John Cox, Fmr. CEO, Turkey Hill
Dairy, John Cox Consulting
Martin Chilcott, CEO & Founder,
Manufacture 2030
Sarah Lee, Governor's Advanced
Manufacturing Sector Lead,
Washington State Department
of Commerce
Frank Altman, CEO,
Community Reinvestment Fund
Think about sustainability as a matter of continuous
improvement; analyze the value stream and where the waste
is in that value stream and work hard to find an intersection
of waste and profitability
Look for opportunities to partner with people who value
things that you don't necessarily value (e.g. excess land for
energy generation)
Consider seeking support from within the value chain (e.g.
OEMs seeking sustainability from within their supply chain)
Look for state-level resources to help support businesses in
being "investor ready"; understand what local lenders need.
Form strategic, targeted parterships with businesses to
attract private funding and philanthropy.
Look at network of Community Development Financial
Institutions (CDFIs) across the country that are concerned
with "those people that are farthest away from the
opportunity. CDFIs are "capillaries of finance" that seek to
access hard to reach markets thorough financial engineering
(e.g. guarantees from philanthropy and government).
Look for opportunities to share the cost and complexities
across a sector.
Seek "innovative cluster" potential to expand sustainability in
a geographic area in a sector; offer "wrap-around" services
that target a specific challenge and solution.
EFAB Recommendations
I. P2 Grant Program
¦ Focus next round of P2 grants on grantees with
expertise in relevant sectors for primary P2 finance
opportunities and relevant capacities to advance P2
finance efforts [single industry or group of industries
with similar P2 issues]
Identify and support a cohort of regional P2 pilots that
demonstrate robust partnerships for pre-
development support (technical assistance) and
innovative funding relationships - to serve as P2
"demonstration projects"
II. Education/Training
Develop sector-based use cases for P2 financing
(through grantees or consultants)
Develop a series of webinars on P2 success cases and
factors contributing to success (referencing workshop
learnings)
III. Risk Reduction Mechanisms
¦ Launch technology certification program around
priority interventions in one or two focus sectors
Develop underwriting standards for P2 on specific
waste streams within specific industries, in
conjunction with trade groups and technical experts
Explore use of existing and new credit
enhancements/guarantee programs (e.g. EPASRF,
SBA, USDA, State-level programs, USDOE, etc.)
12
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Environmental Financial Advisory Board Meeting, Sept. 20, 2022 | 24
EFAB P2 Charge Deliverables
Pollution Prevention
Finance Forum
Webinar Recordings
Pollution Prevention
Finance Forum
Resource Package
m
"***
'N,
\
Pollution Prevention Financing
Recommendations Letter
(5-7 Pages)
Environmental Financial Advisory Board
J
Pollution Prevention Financing
Conclusions &
Recommendations
(PowerPoint)
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