Three Federal Funding Pools Every Industrial Project Developer Should Know About

The guide outlines three federal funding pools for US clean industrial projects: the Office of Clean Energy Demonstration (OCED) providing grants up to 50% of costs for non-commercial technologies; the Loan Programs Office (LPO) offering up to $412 billion in loan authority to bridge projects to bankability; and various uncapped Section 45 tax credits for hydrogen, heavy industry, and carbon management. It emphasizes the role of these incentives in enabling the creation of 'clean industrial hubs' and the necessity of coordinating federal, state, and private capital to realize these projects.

• The Office of Clean Energy Demonstration (OCED), established by the Bipartisan Infrastructure Law in December 2021, provides competitive grants to move clean energy technologies from the lab to market. While initially allocated $500 million, the Inflation Reduction Act (IRA) increased this to $6.3 billion, with the agency covering up to 50 percent of costs for demonstration projects not yet at commercial scale.
• The Department of Energy's Loan Programs Office (LPO) has an estimated $412 billion in total loan authority and acts as a 'bridge to bankability' for first-of-a-kind projects. Unlike competitive grants, LPO funds all projects that meet its eligibility criteria, focusing on market vulnerabilities to lead commercial funders toward riskier projects.
• The Inflation Reduction Act (IRA) significantly expanded the tax credit landscape for hydrogen, heavy industry, and carbon management through uncapped Section 45 credits. Key changes include increasing the value of existing credits (such as Section 45Q for sequestration to $85/ton), creating new credits for clean hydrogen (Section 45V) and clean transport fuels (Section 45Z), and introducing 'direct pay' and 'transferability' to allow developers to monetize credits without needing large tax liabilities.
• Tax credit values can be increased by '10% adders' for projects meeting domestic manufacturing thresholds or located in 'energy communities,' though failure to meet prevailing wage and apprenticeship requirements could reduce credit values by up to 80 percent.

APA

RMI (2023). Three Federal Funding Pools Every Industrial Project Developer Should Know About. https://rmi.org/resources/three-federal-funding-pools-every-industrial-project-developer-should-know-about/

Chicago

RMI. Three Federal Funding Pools Every Industrial Project Developer Should Know About. 2023. https://rmi.org/resources/three-federal-funding-pools-every-industrial-project-developer-should-know-about/.

Wikipedia

{{cite report |author=RMI |title=Three Federal Funding Pools Every Industrial Project Developer Should Know About |date=19 May 2023 |url=https://rmi.org/resources/three-federal-funding-pools-every-industrial-project-developer-should-know-about/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023three, author = {{RMI}}, title = {{Three Federal Funding Pools Every Industrial Project Developer Should Know About}}, institution = {RMI}, year = {2023}, month = may, url = {https://rmi.org/resources/three-federal-funding-pools-every-industrial-project-developer-should-know-about/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }