Fiscal Year 2023 Appropriations Priorities: Energy and Climate Investments

The annual federal funding process allows Congress to focus investments on the most impactful federal energy and climate initiatives, supporting vital programs that are key to reaching net-zero emissions by 2050 and addressing climate change economy-wide. BPC developed recommendations for Congress to consider for fiscal year 2023 appropriations for the Department of Agriculture, the Department of Energy, the Environmental Protection Agency, and the Department of the Interior. Collectively, these investments support funding to boost innovation and unlock regulation for key climate and energy programs in a way that is environmentally responsible and equitable.

Department of Agriculture

Regional Climate Hubs

Our recommendation: BPC recommends $45 million for the USDA Agricultural Research Service’s Regional Climate Hubs. The increased funding will allow the program to scale up the critical work the Hubs do in providing science-based information and tools on climate change to agricultural managers and foresters.

Why this is important: Climate Hubs connect USDA research and program agencies to the communities that they serve—agricultural producers and professionals—by delivering timely and authoritative tools and information. Hubs develop science-based, regional-specific information, technologies, and assistance, alongside USDA agencies and partners, which enable agricultural and natural resource managers to make climate-informed decisions.

Sustainable Aviation Fuel

Our recommendation: BPC supports the president’s budget request of $140 million to the Sustainable Agriculture Systems (SAS) program under USDA’s Agriculture and Food Research Initiative (AFRI) to facilitate development of regionally-based, low-carbon, local biomass industries like the production of sustainable aviation fuels.

Why this is important: The Coordinated Agricultural Projects (CAPs), housed under the SAS program, supports regionally-specific projects to connect local biomass supply chains to commercial value such as advanced biofuels and sustainable aviation fuel. These projects provide triple benefits – reducing emissions, enhancing economic investment and job creation in rural areas, and improving national energy security. This additional funding will enable AFRI to fund more projects, like the conversion of wood waste to jet fuel in the Pacific Northwest, building up regional biomass supply chains across the country.

Department of Energy

Advanced Research Projects Agency – Energy (ARPA-E)

Our recommendation: BPC recommends $575 million to support additional solicitations and an increase for scale-up and demonstration of innovative energy projects. This is in line with the FY2023 authorization in the Energy Act of 2020.

Why this is important: ARPA-E’s innovative approach to funding transformative, early-stage energy research boosts U.S. energy security, economic competitiveness, and employment opportunities. However, at the current funding level, ARPA-E must frequently turn away innovative, potentially game-changing energy projects. Expanding the program’s funding will allow it to undertake additional projects and accelerate its mission to revolutionize the energy sector, ensuring the United States stays at the cutting edge of energy science and technology.

Carbon Dioxide Removal (CDR) Crosscut Initiative

Our recommendation: BPC recommends $337 million for a crosscutting initiative for research, development, and demonstration (RD&D) of CDR technologies and approaches to provide support for a comprehensive suite of scalable CDR solutions. We recommend coordination across DOE Offices of Fossil Energy and Carbon Management (FECM), Science, Energy Efficiency and Renewable Energy (EERE) and any other relevant program offices or agencies, including the Environmental Protection Agency and USDA.

Why this is important: Models done by the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA) indicate the need for a near-term focus on CDR development and deployment to achieve net-zero by 2050. Carbon dioxide removal (CDR) encompasses a broad suite of engineered and natural methods, including direct air capture (DAC), enhanced weathering, active land management, biomass energy, and carbon capture and sequestration. Strong federal appropriations are needed to ensure successful deployment of the CDR technology and strategies. Furthermore, RD&D funding will ensure consistent support for CDR across the full innovation pipeline and enable the most effective and efficient approaches to reach the market.

Office of Economic Impact and Diversity (OEID)

Our recommendation: BPC supports the President’s budget request of $34 million for the DOE’s Office of Economic Impact and Diversity (OEID), recognizing its increased responsibilities in implementing various executive orders for racial and gender equity and climate justice (13985, 13988, and 14008) and supporting community engagement and environmental justice efforts in the implementation of the Infrastructure Investment and Jobs Act (IIJA).

Why this is important: The OEID has a four-decade long record working to increase energy sector workforce diversity, building partnerships with minority serving institutions, and supporting participation of small and disadvantaged businesses in government contracts. Therefore, OEID is uniquely positioned to coordinate community engagement activities in IIJA’s major clean technology deployment programs such as Regional Clean Hydrogen Hubs and Regional Direct Air Capture Hubs. A robustly funded OEID is crucial to ensuring equitable distribution of IIJA benefits and engagement from the nation’s diverse workforce and local communities in producing climate and economic results built to last.

Office of Fossil Energy and Carbon Management Environmental Impact Statements

Our recommendation: BPC encourages DOE to work with CEQ to develop National Environmental Policy Act (NEPA) guidance specific to carbon management, including the possible creation of programmatic environmental impact statements for issues common to carbon management infrastructure. A recent Council on Environmental Quality (CEQ) report recommends advancing the efficient, orderly, and responsible development of carbon management projects at increased scale. One of the recommendations was to have DOE work in tandem with CEQ to develop carbon management specific NEPA guidance, including the creation of programmatic environmental impact statements (EISs) for environmental issues common to carbon management infrastructure.

Why this is important: Recent federal investments in carbon management represent important steps toward meeting our climate and economic goals, but several barriers to effective deployment remain—especially as long permitting and environmental integrity assessment back-logs remain. This recommendation provides a safe and efficient way to work within robust permitting schemes while expediting the required time to deploy carbon management infrastructure.

Innovation, Research and Development for Industrial Decarbonization Crosscut Initiative

Our recommendation: BPC recommends $650 million in support of industrial decarbonization activities across DOE’s EERE, FECM, and the Office of Science to conduct research and innovation for developing, deploying, and commercializing energy-efficient and low-carbon technologies that ensure industrial emission reduction and American manufacturing competitiveness.

Why this is important: Industrial emission from hard-to-decarbonize sources like heavy industry, chemical, steel, fertilizer, and cement production account for 24% of U.S. greenhouse gases emissions but spending on industrial innovation made up only 7% of DOE’s total R&D spending in 2016. Innovation that enables low-carbon fuel switching, energy and material optimization, and carbon dioxide capture and removal is needed to decarbonize this sector. Industrial research and innovation can enhance U.S. manufacturing competitiveness and energy security by reducing energy cost, increasing resilience, and creating four additional jobs for every manufacturing job.

Lab-Embedded Entrepreneurship Program (LEEP)

Our recommendation: BPC recommends $20 million in funding for DOE LEEP to advance the entrepreneurial development of innovations and grow the program to more national labs, with $1 million going to each LEEP node to increase the diversity of program applicants and participants. BPC also recommended that DOE transfer management of the program from the Advanced Manufacturing Office (AMO) to the Office of Technology Transitions (OTT).

Why this is important: LEEP represents a unique opportunity to enable commercialization of clean energy innovations developed in a lab setting. Unlike similar federal programs, LEEP uniquely provides education on customer-oriented thinking and access to funding and tools to enable innovators-in-training to prove their technology. An increase in funding will allow LEEP to expand the number of participants, diversify the pipeline of clean energy entrepreneurs, and resource the program as it expands to additional national laboratories.

Loan Programs Office (LPO)

Our recommendation: BPC requests $480 million for LPO, which includes $160 million for the Title 17 Innovative Energy Loan Guarantees Program (Title 17) to allow for continued loan guarantees, $300 million for the Advanced Technology Vehicles Manufacturing (ATVM) loan program to make direct loans for its new authorities in IIJA, and $20 million for the Tribal Energy Loan Guarantee Program (TELGP) to improve accessibility to our nation’s Tribes and Tribal Energy Organizations.

Why this is important: DOE’s LPO is the primary driver of deployment activities for emerging energy technologies. With proper support, its three programs can continue to lead our efforts to commercialize innovative technologies and promote energy independence. This request aims to provide additional loan authority, credit subsidy funding, and program eligibility tweaks to further improve LPO’s ability to finance the dramatically increased number of applications for innovative energy and manufacturing projects.

Nonprofit Foundation for Energy Security and Innovation

Our recommendation: BPC recommends $31.5 million for the creation of a non-governmental energy foundation within DOE to assist in improving and accelerating commercialization efforts by mobilizing public and private sector financing, $1.5 million to establish the Foundation and $30 million for carrying out its activities.

Why this is important: In recent years, private companies like Microsoft, Unilever, and Amazon have dedicated billions of dollars to climate and clean energy funds to accelerate solutions to address climate change. But this funding will fall short of its potential, unless the public and private sectors work together and coordinate investments that advance needed energy technologies. DOE experts understand our energy system and the technologies needed to reach net zero, while the private sector understands the commercial market, customer needs, and the technologies most likely to succeed financially. Greater coordination through such a foundation will ensure that the most promising U.S. energy technologies receive funding and support to make their way to market.

Office of Clean Energy Demonstrations (OCED)

Our recommendation: BPC recommends $200 million for DOE’s OCED for solicitations focused on crosscutting energy challenges, funding for successful applicants to conduct community engagement to share co-benefits of OCED-funded projects, and funding to develop partnerships and resources for early-stage companies to apply for large-scale funding opportunities in OCED.

Why this is important: Many critical technologies for meeting the nation’s net-zero emissions goals have not yet achieved commercial viability. The work of OCED helps to move emerging clean energy technologies out of the laboratory and into the market, spanning the “valley of death” for prototype or pilot stage technologies not yet ready for commercial adoption and at-scale deployment. OCED represents an opportunity for DOE to provide dedicated expertise and funding for large-scale, pre-commercial clean energy technology demonstrations.

Office of Technology Transitions (OTT)

Our recommendation: BPC recommends $50 million for DOE’s OTT to maintain its existing programs and expand programs related to supporting entrepreneurs, small businesses, and incubators and accelerators that advance technologies relevant to DOE’s mission.

Why this is important: Support for commercialization and technology transfer is central to the future success of the clean energy technologies we need to achieve our mid-century climate goals. OTT takes a proactive and transparent approach to facilitating cross-industry and interagency collaboration to bring high-impact energy technologies to market that have potential to improve lives, increase energy efficiency and productivity and enhance the economic competitiveness of businesses across the country in a variety of technology fields relevant to DOE’s broad mission.

Environmental Protection Agency

Class VI Wells

Our recommendation: BPC recommends $1.2 million to the EPA Underground Injection Control (UIC) Program to support Class VI regulator education and training programs with states and other entities.

Why this is important: The scientific community broadly agrees that we need to significantly scale carbon management technologies in the coming decades to achieve our climate goals. The UIC program works to ensure that geologic carbon storage projects have environmental integrity, but with applications for both Class VI well permits, and state primacy expected to increase rapidly, the $5 million provisioned through IIJA for UIC falls short. EPA requires additional funding to build and educate federal and state staff, establish capacity-building resources for program implementation, and process both permits and primacy applications.

Department of the Interior

Offshore Carbon Capture and Sequestration (CCS)

Our recommendation: BPC recommends $4 million for the Interior Department to develop carbon storage expertise and expand workforce capacity required to manage renewable energy activities at the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE).

Why this is important: The United States must set its sights on large-scale deployment by advancing leasing, permitting, and containment assurance programs for geologic sequestration of carbon dioxide offshore in federal waters. This will establish the United States as a leader in commercializing CCS and in ensuring the safety and long-term durability of offshore sequestration. $4 million will help the Interior Department meet statutory deadlines outlined in IIJA, collaborate across agencies, and engage with stakeholders.