Inflation Reduction Act of 2022 Includes Over $5 Billion in Funding to Drive Low Carbon Procurement in Buildings and Construction

Landmark Legislation to Benefit Efforts to Decarbonize Built Environment Sector, Drive Adoption of Carbon Disclosure Practices

The Inflation Reduction Act of 2022, which aims to fight climate change and address record inflation, includes policies that will invest in U.S. energy production, reduce carbon emissions and ensure American infrastructure is affordable, reliable, clean and secure. Included in this agreement are policies that aim to drive aggressive emissions reductions by 2030 within the building sector and drive low-carbon procurement.

A consortium of green building leaders and advocacy organizations, including Building Transparency and Third Way, provided insight and analysis that informed the legislation, including potential emissions reductions that could be realized by incentivizing the use of low-carbon, clean materials for public infrastructure projects. Combined with direct investments and tax credits to facilitate deep industrial decarbonization, these organizations estimate that the agreement has the potential to reduce over 200 million metric tonnes of carbon dioxide emissions annually by 2030. The agreement includes the following investments in clean procurement:

• $250 Million for Environmental Product Declarations Assistance (SEC. 60112), which provides funding to support the development and standardization of EPDs for construction materials by providing grants and technical assistance to manufacturers to produce EPDs and invest in transparency. EPDs are documents that disclose the carbon impact of a product’s materials and manufacturing processes.

• $100 Million for Low-Embodied Carbon Labeling for Construction Materials (SEC. 60116), to identify and label low-carbon materials and products for use in federally funded transportation and building projects based on data available via EPDs.

• $2.15 Billion for Use of Low-Carbon Buildings (SEC. 60503), to be used to specify and install low-embodied carbon materials and products for use in General Services Administration-owned buildings.

• $2 Billion for Low-Carbon Transportation Grants (SEC. 60506), which reimburses and incentivizes the use of low-carbon materials and products for Federal Highway Administration projects.

• $4 Billion for Improving Climate Resilience of Affordable Housing (SEC. 30002), which will provide funding to improve the energy or water efficiency, indoor air quality and/or sustainability of projects, and implement low-carbon technologies, materials, and products to improve the climate resiliency of affordable housing.

• FEMA Building Materials Program (SEC. 70006), which provides financial assistance for the use of low-carbon materials and incentives that encourage low-carbon and net-zero energy projects.

“This agreement marks a milestone in driving decarbonization and sustainable infrastructure development, which underscores the importance of providing funding for low-carbon procurement if we’re going to make real progress in reversing climate change,” said Stacy Smedley, Executive Director of Building Transparency. “The emission reductions that could be realized by this legislation in just one year is the equivalent of taking 51 million gasoline-powered cars off the road for the same time or consuming 26 billion gallons of gasoline. The U.S. has huge purchasing power when it comes to low-carbon procurement and this effort will also drive demand and urge manufacturers and suppliers to lower the carbon emissions of their products.”

“The agreement reached by Senators Schumer and Manchin represents an historic opportunity to advance our national climate and economic goals,” said John Milko, Climate and Industry Consultant for the Climate and Energy Program at Third Way. “It makes vital investments to enhance embodied carbon transparency and create a more robust market for low-carbon materials, while at the same time bolstering the competitiveness of US manufacturers by providing them the tools they need to decarbonize.”

To learn more about the potential impact of low-carbon procurement legislation, visit ThirdWay.org. For more information about EPDs and tools available to drive green procurement, visit BuildingTransparency.org.

About Building Transparency

Building Transparency is a 501(c)3 nonprofit organization that provides open access data and tools that support broad and swift action across the building industry in addressing embodied carbon’s role in climate change. Formed in 2020, Building Transparency hosts, manages and maintains the Embodied Carbon in Construction Calculator (EC3) tool, which provides thousands of digitized EPDs in a free, open-source database, and Tally, the nonprofit’s Life Cycle Assessment Tool. Building Transparency strives to provide the resources and education necessary to promote adoption of the EC3 tool, including through the official materialsCAN program, and works with global policymakers to shape a better building future.

About Third Way

The Climate and Energy Program at Third Way, a center-left public policy think tank, designs and advocates for policies to help the US reach net-zero emissions in the fastest and fairest way possible.

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