Sec. 205. Carbon Mitigation Fund
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There is hereby established a trust fund, to be known as the Carbon Mitigation Fund , consisting of such amounts as may be appropriated to such fund as provided in this section. The Carbon Mitigation Fund shall be administered by the Secretary. There are hereby appropriated to the Carbon Mitigation Fund each year amounts equal to the sum of the amounts that are— attributable to alternative compliance payments made pursuant to section 202(c); the alternative compliance payments that would have been made by any petitioners under section 202(d) but for a determination of inadequate availability of technology made by the Secretary under section 202(d); and collected as a civil penalty under section 209.
Amounts in the Carbon Mitigation Fund shall be available without further appropriation or fiscal year limitation to carry out the program under subsection (b). The Secretary shall carry out a program to award funds to entities to carry out activities in States that avoid emissions of greenhouse gases or remove carbon dioxide from the atmosphere. Activities for which the Secretary may award funds under the program carried out pursuant to this subsection include— improvement to the energy efficiency of existing facilities and devices; the replacement of natural gas space heaters, natural gas water heaters, and natural gas stoves, with electric appliances; the replacement of fossil fuel-powered vehicles owned by State and local agencies with electric vehicles or other low-carbon fuel vehicles; the replacement of fossil fuel-powered ground airport and seaport vehicles with electric vehicles or other low-carbon fuel vehicles; installation of fast charging stations for electric vehicles along highways and other public roads in urban areas and rural areas; beneficial electrification-related reductions not otherwise identified in this paragraph; direct air capture and permanent sequestration or utilization of carbon dioxide; and any activity that is endorsed by a generator or a retail electricity supplier that avoids emissions of greenhouse gases or removes carbon dioxide from the atmosphere.
The Secretary may not award funds to an entity under the program carried out pursuant to this subsection for any activity for which the entity has been issued a zero-emission electricity credit or received a deduction of megawatt-hours in the calculation under 202(a)(3) to account for beneficial electrification-related reductions. The Secretary may only award funds under the program carried out pursuant to this subsection for an activity for which the Secretary determines that— the amount of carbon dioxide emissions avoided or removed from the atmosphere by the activity will be adequately confirmed through monitoring, reporting and verification; the risk that some amount of the carbon dioxide that is removed from the atmosphere by the activity may reenter the atmosphere at a later date is adequately reflected through a discounting of the amount described in paragraph (5)(C)(ii); the risk that some amount of the greenhouse gases, the emission of which is avoided by the activity, may enter the atmosphere at a later date is adequately reflected through a discounting of the amount described in paragraph (5)(C)(i); the risk that the activity may directly or indirectly increase the release of greenhouse gases from another location has been adequately addressed; the activity is not required, or being fully supported financially by, a Federal, State, or local law, program, or activity; and if the activity involves land use, the activity aligns with the Sustainable Development Goals of the United Nations, including being consistent with the conservation of biological diversity and natural ecosystems (including forests and grasslands), and shall maintain ecosystem services and enhance other social and environmental benefits.
In order to qualify for an award of funds under this subsection, an entity shall submit to the Secretary a proposal that— describes the activity to be carried out with the award of funds in a manner specified by the Secretary; identifies the amount of money for which the entity is applying; identifies the amount, to be measured in one-year increments, of— greenhouse gas emissions to be avoided by the activity, measured in terms of carbon dioxide equivalent; or carbon dioxide to be removed from the atmosphere by the activity, measured in metric tons; identifies the bid amount, expressed as dollars per metric ton, which shall be the quotient obtained by dividing the amount identified under subparagraph
(B)by the amount identified under subparagraph (C); provides any information required by the Secretary in order to make a determination described in paragraph (4); and provides any other certifications the Secretary determines appropriate. Not later than February 1, 2024, and each February 1 thereafter, the Secretary shall solicit proposals for activities described in paragraph
(1)for which the Secretary may award funds under the program carried out pursuant to this subsection. Not later than June 1, 2024, and each June 1 thereafter, the Secretary shall identify proposals that have been submitted by March 1 of such calendar year for activities described in paragraph
(1)that qualify for an award of funds under the program carried out pursuant to this subsection. Not later than August 1, 2024, and each August 1 thereafter, the Secretary shall award to entities funds available in the Carbon Mitigation Fund established under section 9512 of the Internal Revenue Code of 1986 for activities described in proposals identified under subparagraph (B). The Secretary shall award funds to entities for activities described in proposals identified under paragraph (6)(B)— beginning by awarding funds to the entity submitting such a proposal with the lowest bid amount identified pursuant to paragraph (5)(D); and then awarding funds to entities sequentially by entity submitting such a proposal with the next lowest bid amount so identified until all funds are awarded. The Secretary shall consult with the Secretary of the Interior, the Secretary of Agriculture, and the Administrator of the Environment Protection Agency in promulgating regulations to measure, monitor, and verify any natural sequestration activities awarded under this section.