IRA National Industry Exchange Presentation_21MAR2024.pdf

GSA PBS INFLATION REDUCTION ACT INDUSTRY EXCHANGE

IRA Industry Exchange Inflation Reduction Act (IRA) Overview

March 21, 2024

Welcom e and Overview

Introductions of Today’s Facilitators

● Khadijah Robinson, Office of Acquisition Management

● Lena Plummer-Milindez, Office of Acquisition Management

A Few Reminders

● This session is being recorded

● Please use the Q&A feature to ask questions

● Please complete the post-event survey

● We will post the slides and Q&A to the SAM.gov notice after the event https://sam.gov/opp/5417ad0239dc448880c9947ecb92ba87/view

GSA PBS INFLATION REDUCTION ACT INDUSTRY EXCHANGE 5

Time Topic Speakers and Moderators

11:00 - 11:15 AM Eastern

Kickoff and Introductions John “JD” Dennis, PBS Climate &

Infrastructure PMO, and Jetta Wong, Senior Advisor to the

Administrator, Climate

11:15 - 11:40

AM

Inflation Reduction Act Overview, including High-Performance Green Building (HPGB) Programs and Emerging & Sustainable Technologies (E&ST)

JD Dennis, Climate & Infrastructure PMO and Jeremey Alcorn, PBS Facilities

Management

11:40 AM -

12:00 PM

GSA’s Low Embodied Carbon (LEC) Material Requirements Walter Tersch, PBS Architecture & Engineering

12 - 12:10 PM Break

12:10 - 1:00 PM

Moderated Session on Environmental Product Declarations, Implementation Experience, and EPA and DOE Grant Programs

Aaron Luth, Platte River Concrete Steve Jackson, West Contracting (asphalt)

Holly Elwood (EPA) Robert Sozanski (DOE)

1:00 - 2:40 PM Regional Forecast of IRA Opportunities GSA Regional and Acquisition Management Staff

2:40 - 3 PM Discussion, Including Questions Submitted During Registration JD Dennis and Walter Tersch

Agenda

OPENING REMARKS

Joanna Rosato, PMP Deputy Commissioner (Acting), Public Buildings Service

OPENING REMARKS

Jetta Wong Senior Advisor to the Administrator, Climate

Speakers and Moderators

Jeremey Alcorn LEED AP Climate and Sustainability Officer PBS Facilities Management

Walter Tersch LEED AP Sustainability Program Manager PBS Design & Construction

John “JD” Dennis PBS Inflation Reduction Act Program Mgmt. Office

The Inflation Reduction Act of 2022 (IRA) makes the single largest investment in climate and energy in American history

Inflation Reduction Act of 2022 (Aug. 16, 2022)

✓ Enabling America to tackle the climate crisis ✓ Advancing environmental justice

✓ Securing America’s position as a world leader in domestic clean energy manufacturing

✓ Putting the United States on a pathway to achieving the Administration’s climate goals, including a net-zero operational emissions federal building portfolio by 2045, and net zero emissions procurement by 2050.

IRA Funding for GSA = $3,375,000,000 for low-embodied carbon (LEC) materials in construction and renovation projects.

for emerging and sustainable technologies (E&ST).

for measures to convert GSA facilities into High-Performance Green

Buildings

$2.15 billion $975 million $250 million

● The LEC and E&S Tech funding must be 100% obligated by September 2026.

● GSA’s appropriations are in IRA sections 60503, 60504, and 60502

● The Federal Highway Administration also received $2B for LEC material grants https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf#page=267 https://www.fhwa.dot.gov/inflation-reduction-act/ https://www.fhwa.dot.gov/lowcarbon/outreach.cfm

IRA - Program Objectives

REDUCING

HARMFUL

EMISSIONS

Avoid millions of metric tons of greenhouse gases through the use of low-embodied carbon construction materials and improved energy-efficient building operations.

CREATING GOOD-

PAYING JOBS

Resulting projects will support an estimated

9,500 annual economy-wide jobs across the length of the projects (approximately 43,000 total job-years).

IMPROVING

EFFICIENCY AND

REDUCING LONG-

TERM COSTS

By making federal buildings more energy efficient, these projects will reduce operating costs and save money for taxpayers over the long run.

CATALYZING

AMERICAN

INNOVATION

By increasing demand for low-carbon materials and emerging/ sustainable technology, these investments will strengthen America’s domestic industrial base while catalyzing innovation and job growth in homegrown industries that produce next-generation materials, products, and equipment.

IRA Key Strategic and Performance Outcomes

● Strategic Outcomes

○ Deep Energy Retrofits

○ All Electric Buildings

○ Net Zero Energy Facilities

○ Sustainable Buildings

● Performance Outcomes

○ Embodied carbon emissions avoided

[Metric Tons CO2 equivalent (MTCO2e)

○ Operational emissions avoided (MTCO2e)

○ Energy Savings (british thermal units)

○ Water Saving (gallons)

○ Cost avoided ($)

GSA’s IRA Project Selection

Provides time to develop additional projects to address opportunities across the broader GSA portfolio throughout the United States.

Capitalizes on projects with existing capital appropriations which can further leverage

IRA funding

Multi-phased approach

Leverages opportunity to multiply outcomes via Energy Savings

Performance Contracts (ESPCs)

GSA IRA LEC Project List

Project info web pages are linked for many of these locations https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act/lec-program-details/lowembodied-carbon-projects

Helpful links GSA’s Inflation Reduction Act webpage

● Low-embodied Carbon material requirements

● Low-embodied Carbon Projects, Fact Sheet, and FAQs

GSA’s Bipartisan Infrastructure Law webpage

● Land Port of Entry Projects

GSA Forecast of Contract Opportunities: Acquisition Gateway

Open Market opportunities over $25,000: sam.gov

EPA's Interim Determination for low-embodied carbon materials

Federal Buy Clean Initiative: sustainability.gov https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act/lec-program-details/material-requirements https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act/lec-program-details/lowembodied-carbon-projects https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act/lec-program-details/lec-pilot-fact-sheet https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act/lec-program-details/material-requirements-faqs https://www.gsa.gov/real-estate/gsa-properties/land-ports-of-entry-and-the-bipartisan-infrastructure-law?_gl=1*trh17d*_ga*MTE5NDExNzMxOC4xNzAyOTA4ODA4*_ga_HBYXWFP794*MTcwOTE1ODY4Ny4yMjUuMS4xNzA5MTU4ODcxLjAuMC4w https://www.gsa.gov/real-estate/gsa-properties/land-ports-of-entry-and-the-bipartisan-infrastructure-law/bipartisan-infrastructure-law-construction-projects https://hallways.cap.gsa.gov/app/#/dv/federal-business-forecast https://sam.gov/ https://www.epa.gov/system/files/documents/2023-01/2022.12.22%20Interim%20Determination%20on%20Low%20Carbon%20Materials%20under%20IRA%2060503%20and%2060506_508.pdf https://www.sustainability.gov/buyclean/

Converting GSA Facilities to High- Perform ance Green Buildings

Inflation Reduction Act § 60502 “Assistance for Federal Buildings”

Must be obligated by 9/30/2031

$250 Million Purpose measures necessary to convert facilities of the Administrator of General Services to high-performance green buildings (as defined in section 401 of the Energy Independence and Security Act of 2007)

39% of GSA-owned eligible buildings met the criteria for sustainable federal buildings (under EO 14057) in FY22

Sustainable Federal Buildings GSA applies the 2020 Guiding

Principles for Sustainable Federal Buildings https://www.sustainability.gov/pdfs/guiding_principles_for_sustainable_federal_buildings.pdf https://www.sustainability.gov/pdfs/guiding_principles_for_sustainable_federal_buildings.pdf https://www.sustainability.gov/pdfs/guiding_principles_for_sustainable_federal_buildings.pdf

Guiding Principles for Sustainable Federal Buildings

Employ Integrated Design Principles (siting, commissioning)

Optimize Energy Performance (energy efficiency, renewables, meters)

Protect and Conserve Water (low flow toilets, water efficiency, meters)

Enhance the Indoor Environment (ventilation, thermal comfort, daylighting)

Reduce the Environmental Impact of Materials (recycling, refrigerants, hazmats)

Assess and Consider Building Resilience (climate risk, resilience and adaptation)

GSA qualifies buildings as sustainable Federal buildings through the 2020 Guiding Principles or third-party certification systems

Pathways for Compliance with Sustainable Federal Building Criteria

● New Construction / Modernization

○ LEED Gold

○ Sustainable Design Checklist

(based on 2020 Guiding Principles)

● Existing Buildings:

○ 2020 Guiding Principles

○ Use for both existing building qualification and reassessment

Columbus, NM Land Port of Entry LEED Platinum and COTE Top Ten Award

Em erging & Sus tainable Technologies and Program s

Inflation Reduction Act § 60504 “General Services Administration Emerging Technologies”

Must be obligated by 9/30/2026

$975 Million Purpose emerging and sustainable technologies, and related sustainability and environmental programs

Emerging AND Sustainable Tech

Technology must:

contribute to building sustainability and be emerging

Ronald Reagan Building and International Trade Center

Strategic Outcomes:

Deep Energy Retrofit, All Electric, Sustainable Building

Programs

Green Proving Ground and Applied Innovation Learning Laboratories

Smart Buildings and Operational Technology

Performance Contracting (third party-financed public-private partnerships)

Sustainable Buildings, Decarbonization, and Net Zero

Technology Stacking: gsa.gov/gpg

Programming Start at standard baseline commercial building design

Renewables and Storage Onsite renewables with potential to add storage and/or carbon pollution-free electricity

HVAC & Equipment High efficiency and electric-powered HVAC and equipment

Enclosure Super-efficient building envelope

Smart Building Controls Smart integrated controls to optimize building performance

Lighting High efficiency lighting and daylighting

Net Zero Operations http://gsa.gov/gpg

Low Em bodied Carbon Materials

Inflation Reduction Act § 60503 “Use of Low Carbon Materials”

○ Must have substantially lower embodied carbon than industry averages as determined by the U.S.

Environmental Protection Agency (EPA)

Must be obligated by 9/30/2026

$2.15 Billion Purpose

To install low embodied carbon materials in the construction and alteration of GSA buildings

Embodied Carbon 101 Embodied carbon refers to the greenhouse gas (GHG) emissions associated with the manufacturing, transportation, installation, maintenance, and disposal of construction materials.

Current focus is “cradle to [factory] gate” because the Product Stage entails most of the emissions, and has data available on Environmental Product Declarations (EPDs)

How is embodied carbon documented and quantified?

● An Environmental Product Declaration (EPD) is a third party-verified summary, created by a manufacturer, of how a product impacts the environment during its life cycle

● EPDs disclose environmental impacts and inform purchasing choices

● The GHG emissions associated with a product are called global warming potential (GWP)

● GWP is expressed in carbon dioxide equivalent (CO2e) per unit of material

“Waterfall approach” per U.S. EPA Interim Determination

The U.S. Environmental Protection Agency (EPA) issued an Interim Determination in December 2022 to guide GSA and the Federal Highway Administration on selecting IRA-qualifying materials and products.

For asphalt, concrete, glass, and steel, establish GWP limits for:

● the best-performing [“top”] 20% of in terms of embodied carbon,

● the best-performing [“top”] 40% in terms of embodied carbon, and

● Better Than Industry Average.

Embodied carbon to be validated with a facility-specific, product-specific cradle-to-gate Type III (third-party verified) environmental product declaration (EPD)

Additionally report ENERGY STAR Energy Performance Score for all plants in the supply chain (cement, flat glass, and integrated steel mills) https://www.epa.gov/system/files/documents/2023-01/2022.12.22%20Interim%20Determination%20on%20Low%20Carbon%20Materials%20under%20IRA%2060503%20and%2060506_508.pdf

How we got here

Through the Federal Buy Clean Initiative, the Federal government is, for the first time, prioritizing the use of American-made, lower-carbon construction materials in Federal procurement and Federally-funded projects.

GSA’s IRA requirements reflect industry feedback and our 2022 concrete & asphalt standard experience

Inflation Reduction Act

8/16/2022

EPA Interim Determination

12/22/2022

Public Draft Version

1/25/2023

GSA IRA LEC

Requirements

12/12/202310/4/2022

Buy Clean Industry RFI https://www.sustainability.gov/buyclean/ http://gsa.gov/p100

How GSA Established its Global Warming Potential Limits

Pursuant to EPA’s Interim Determination, GSA set GWP thresholds “using data from a verified source (e.g., an open source EPD database, industrywide EPDs or a 3rd party-verified LCA developed using the relevant [product category rule]).”

● GSA’s limits are based on publicly-available industry average and product-specific EPDs, PCR(s) specified in our Requirements, North American geographical scope, and validity dates of 1/1/2022 or later

To generate a product EPD, manufacturers and fabricators gather life cycle assessment (LCA) data, then use a software tool or EPD service provider to create documentation that a Program Operator verifies and publishes.

Potentially useful publicly-accessible EPD map -- filtered to show only concrete, asphalt, steel, and glass.

Building Transparency manages the EC3 database of published EPDs, which it uses to refresh this map weekly.

The information provided herein is for informational purposes only and does not indicate or imply Federal endorsement of any organization, business, material or product.

https://www.google.com/maps/d/u/0/viewer?mid=1_cvVgZ1lj5ae15q7ZkdmTgnYOovrOQo&femb=1&ll=39.00752389438533%2C-95.9565895355515&z=5

The Business Case for EPDs

● EPDs are at the heart of all state and Federal Buy Clean Initiatives, and are the key to eligibility for low-carbon material appropriations.

○ For example, the Inflation Reduction Act of 2022 (IRA) allocates $2.15 billion to GSA and $2 billion to the U.S. DOT’s Federal Highway Administration (FHWA) alone, exclusively for low-carbon concrete, steel, glass, and asphalt with EPDs.

● GSA considers offerors’ embodied carbon reduction plans during its source selection process to choose a winning bidder.

○ EPDs and GWPs are considered https://www.sustainability.gov/buyclean/ http://gsa.gov/ira https://www.fhwa.dot.gov/inflation-reduction-act/

The Business Case for EPDs

● Market demand for EPDs continues to increase. For example, projects pursuing LEED certification often target “Environmental Product Declarations” points.

○ EPDs are also key for calculating a building’s whole-building "embodied carbon" footprint associated with material selections

○ GSA’s new construction and major modernizations target a 20% whole-building embodied carbon reduction. (P100 section 1.9.2.9 “Decarbonization”)

● The business decision to develop an EPD may yield a competitive advantage.

○ It distinguishes your company's offerings, shows market leadership, can get your products listed in popular EPD databases, and can help increase efficiency.

https://www.usgbc.org/credits/new-construction-core-and-shell-schools-new-construction-retail-new-construction-data-15?return=/credits/New%20Construction/v4.1 https://www.gsa.gov/system/files/P100%202022%20Addendum%20Final_.pdf#page=39 https://www.oneclicklca.com/article-the-business-case-for-investing-in-epds/

How to get an EPD?

o Concrete: Climate Earth and Theta EPD for Concrete and Cement o Asphalt: Emerald Eco-Label EPD Tool o EPDs get easier, quicker, and less expensive after the first one.

• Automated links to your existing data help.

o This general “How to get an EPD” overview gives more detail, including on EPD Program Operators.

*GSA does not endorse these or any other third-party resources, tools, or services.

https://climateearth.com/ https://thetaepd.com/signup/concrete https://thetaepd.com/signup/concrete https://asphaltepd.org/ https://www.buildingtransparency.org/resources/how-get-epd/

HHS FDA Lab at Denver Federal Center https://www.gsa.gov/real-estate/gsa-properties/inflation-reduction-act/lec-program-details/lec-pilot-fact-sheet/lec-pilot-projects/hhs-fda-laboratory-and-federal-center

Moderated Dis cus s ion

Mr. Aaron Luth, President

GSA does not endorse this or any other company, product or service.

Platte River Concrete Company (concrete), Nebraska

West Contracting (asphalt), Missouri Mr. Steve Jackson, P.E.

VP of Asphalt Plant Operations and Sustainability

GSA does not endorse this or any other company, product or service.

Update on EPA’s LEC Work Under IRA Sections 60112 & 60116

● Grant Program

○ Jan. 16 application deadline

○ Selectees will be announced Late Spring 2024

● EPD Technical Assistance

○ Through grant recipients – as soon as Fall 2024

○ Through EPA – as soon as Summer 2024

● Label Program

○ Public comment on Draft Approach closed 3/18

○ Final approach will be announced Summer 2024

○ Aiming to have first certified materials by late 2026 www.epa.gov/greenerproducts

Ms. Holly Elwood, U.S. EPA Sustainability & Pollution Prevention Branch - Office of Chemical Safety and Pollution Prevention Lead for Label Program for Low Embodied Carbon Construction Materials and Environmentally Preferable Purchasing

Advanced Energy Manufacturing and Recycling Grant Program (Bipartisan Infrastructure Law section 40209)

Concept papers, which are required, are due April 8, 2024, at 5:00 p.m. ET.

Full applications are due June 24, 2024, at 5:00 p.m. ET. Send questions to: MESC_FOA3294@netl.doe.gov

Mr. Robert Sozanski, U.S. DOE Office of Manufacturing and Energy Supply Chains

(MESC)

mailto:MESC_FOA3294@netl.doe.gov

Qualifying Advanced Energy Project Credit (48C)

$10 Billion in funding from the Inflation Reduction Act

Tax credit of up to 30% of qualified investments for certified projects

$4 billion set aside for projects in communities that have experienced coal mine or coal-fired power plant unit closures

Projects to re-equip existing industrial/manufacturing facilities with equipment designed to reduce the GHG emissions of a facility substantially below current best practices through:

Advanced Energy Property Projects

Greenhouse Gas Emission Reduction Projects

Projects to establish, re-equip, or expand facilities to produce or recycle clean energy products

▪ Energy efficiency and industrial waste reduction technologies

▪ Low- or zero-carbon heat systems;

▪ Carbon capture, transport, removal, utilization, and sequestration / storage; and

▪ Other industrial technologies that reduce greenhouse gas emissions substantially below current best practices.

C O

Industrial Assessment Center (IAC) Implementation Grants

$400M in funding available through FY 2026 ($80M made available to date for first year of program operation)

Grants awards of up to $300,000 per manufacturer (covering one or multiple projects), at a 50% cost share

Eligibility exclusively for small- and medium-sized1 manufacturing firms & water treatment facilities

To address recommendations by IACs, DOE Combined Heat and Power TAPs, or other assessments deemed equivalent by DOE

1. Small- and medium sized manufacturer is a firm with: a gross annual sales of less than $100M, fewer than 500 employees at the plant site, & annual energy bills between $100K - $3.5M

• The grant application period is now open year-round, with quarterly application reviews starting on December 31, 2023

• Request an assessment at https://iac.university/

• The program is hosting monthly office hour sessions to answer any questions starting on October 19; register at https://energywerx.wufoo.com/forms/m1hay6be0bl udmj/

• Keep an eye on https://www.energy.gov/mesc/industrial-assessment-centers-iacs for updates

For details on these three grant programs, see this list of funding opportunity announcements or email robert.sozanski@hq.doe.gov https://iac.university/ https://energywerx.wufoo.com/forms/m1hay6be0bludmj/ https://energywerx.wufoo.com/forms/m1hay6be0bludmj/ https://www.energy.gov/mesc/industrial-assessment-centers-iacs https://www.energy.gov/mesc/industrial-assessment-centers-iacs https://infrastructure-exchange.energy.gov/Default.aspx#FoaId1c87d46b-d181-4d67-8356-8867c5d5b15e https://infrastructure-exchange.energy.gov/Default.aspx#FoaId1c87d46b-d181-4d67-8356-8867c5d5b15e mailto:robert.sozanski@hq.doe.gov

THANK YOU

GSA Inflation Reduction Act National Industry Exchange

“Assistance for Federal Buildings”

“General Services Administration Emerging Technologies”

“Use of Low Carbon Materials”