Maryland touts $130 million in new climate funding from feds

Maryland Department of Environment Secretary Serena McIlwain. Photo by Bryan P. Sears.

Gov. Wes Moore’s administration hailed the news this week that Maryland had won $130 million in federal funding for various climate initiatives.

As the state scrambles for the billions of dollars it will need to meet its ambitious climate mandates, state officials and environmental groups cast the U.S. Environmental Protection Agency grants as good news — and a momentum-builder as the state seeks to develop a clean energy economy.

But Maryland was awarded less than a third of what state agencies were seeking from the federal government. And it amounts to just a small fraction of the approximately $10 billion in new funding state officials believe Maryland will need over the next decade to hit its climate goals.

What’s more, a Moore administration official had warned this spring that a budget amendment regarding energy use in buildings, adopted in the final days of this year’s legislative session, could jeopardize the state’s application for a particular EPA climate grant. That grant application in fact was rejected — though there is no way of knowing whether the budget amendment factored into the federal government’s decision.

Maryland Environment Secretary Serena McIlwain still called the $130 million award an “amazing” victory, given the competitive nature of the grant programs. She said this week that the state applied for about $400 million for climate programs from the EPA through the federal Inflation Reduction Act.

“This is huge, so congratulations to us,” she said during a meeting this week of the Maryland Commission on Climate Change, which she chairs.

And Maryland does appear to have been successful with the EPA, compared to other states.

The EPA said this week that the two Maryland grants were part of 25 awarded so far to states, local governments, tribes and others, from a pool of almost 300 applicants asking for nearly $33 billion. Nationwide, EPA is distributing $4.3 billion initially to 30 states.

“EPA made its selections through a rigorous grants competition that was designed to be fair and impartial,” the agency said in its statement.

Maryland’s grants come from two specific EPA buckets, and in both cases the state’s bid for federal funding was made in conjunction with other jurisdictions. The funding came from the Inflation Reduction Act, the sweeping 2022 legislation that largely sought to address the ravages of climate change.

The first grant, for about $250 million, will be shared by the Clean Corridor Coalition, a consortium led by New Jersey, with Maryland, Connecticut and Delaware. The funds will go to support strategic planning and investments in zero-emission infrastructure for medium- and heavy-duty vehicles on the Interstate 95 corridor. The Maryland Department of Transportation is due to receive $78 million for this initiative, while MDE is in line for about $2.5 million.

The grant will support the Clean Trucks Act of 2023, a law that lets the state develop sales targets to increase zero-emission medium- and heavy-duty vehicles starting in model year 2027. The grant also complements another federal grant awarded to the Volvo Group to manufacture clean freight vehicles at its plant in Hagerstown.

Maryland Transportation Secretary Paul J. Wiedefeld said the funding is the result of an “innovative, interstate partnership to achieve our shared goals around climate and the future of the I-95 corridor.”

“Working together,” he said, “we can create a charging network that helps drive the adoption of zero-emission trucks.”

Maryland was also part of the Climate Pollution Reduction Grants Atlantic Conservation Coalition, which was led by North Carolina. The coalition will get more than $400 million, of which $50 million will be go to four Maryland state agencies, for natural carbon sequestration through improved forest management, agroforestry and the protection and restoration of highly threatened, high-carbon coastal habitats and forests.

The program will be also used across nearly 29,000 acres in Western Maryland, from Frederick County westward.

Besides Maryland and North Carolina, the coalition includes Virginia and South Carolina — and The Nature Conservancy is set to receive some of this federal grant as well.

Bob Allen, deputy executive director of The Nature Conservancy’s Maryland and Washington, D.C., chapter, said the grant recognizes Appalachian forests’ “critical role … in removing emissions and will help to further unlock their potential as a natural climate solution. Just as importantly, this will also help ensure that our forests remain healthy, resilient, and able to further benefit future generations.”

Funding is ‘the big elephant in the room’

Maryland missed out on two of its grant applications seeking about $270 million.

The Department of the Environment was the lead on a bid that included Montgomery County and the District of Columbia, which sought $195 million to enhance and accelerate implementation of Building Energy Performance Standards — carbon-emission regulations for buildings — focusing on low-income and disadvantaged communities.

Earlier this year, in a memo to a state lawmaker obtained by Maryland Matters, the Moore administration’s chief sustainability officer expressed concerns that an amendment inserted into the state budget in the final days of the General Assembly could slow down the implementation of these state clean-building standards. Meghan Conklin, the officer, cited MDE’s application with EPA and said the amendment “potentially puts Federal funding at risk.”

“If this provision sets back the … regulation process and introduces additional uncertainty around regulatory timelines for at least 2 more years, it will threaten our ability to win this large and highly competitive grant,” Conklin wrote.

Jay Apperson, a Department of the Environment spokesperson, said Wednesday the state received no explanation from EPA for why this application was turned down.

Another Maryland application that missed out, led by Hawaii and including 14 states, sought $500 million to purchase and install solar energy and electric grid battery storage, in addition to other zero-emission and resilient energy technologies. Again, the state received no explanation.

Clean-building standards in the state have encountered resistance at times from powerful forces, like the building industry, Realtors, property owners and utilities, who have argued that the state may be trying to do too much, too quickly.

But no one is prepared to say conclusively that the language in this year’s state budget factored into the state’s unsuccessful grant application. EPA has only cited the competitive nature of the grant process for its decisions.

EPA said it expects to award another $300 million in climate grants to state, local and tribal governments later this summer.

“Investments such as this are paramount to ensuring communities across the region who are impacted the most have access to reduced climate and air pollution,” said Adam Ortiz, the former Maryland environmental official who is now the administrator of EPA’s Region 3 office, which covers the Mid-Atlantic.

Apperson said the state hopes to be in the mix for the next round of federal grants.

“We are working in coordination with the Governor’s Federal Investment Team to take advantage of all federal funding opportunities to support Maryland’s climate action,” he said.

MDE has estimated that the state needs an extra $1 billion a year over the next decade to fully pay for its climate mandates. The state Commission on Climate Change is considering endorsing funding proposals when it issues its annual policy recommendations to the governor and General Assembly at the end of the year, and will discuss strategy in workgroup sessions and at full commission meetings over the next few months.

With the possibility that former President Donald Trump could win reelection in November, there is also the threat of robust federal aid for state climate programs drying up all together in the not-too-distant future.

Funding, McIlwain said this week, is “the big elephant in the room.”

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