Description

1. Overview

The Inflation Reduction Act (IRA) (Pub. L. 117-169, Aug. 16, 2022) established the LCTM Program (23 U.S.C. 179), which provides funding for the use of construction materials that have substantially lower levels of GHG emissions.

The purpose of the LCTM Program is to reimburse the incrementally higher costs of using or provide an incentive1 amount to eligible recipients for the use, in projects, of construction materials and products that have substantially lower levels of embodied GHG emissions, as described by the Environmental Protection Agency (EPA), associated with all relevant stages of production, use, and disposal as compared to estimated industry averages of similar materials or products, hereafter referred to as low carbon transportation materials.

The program will also serve to help eligible transportation agencies update or develop specification language and conduct identification activities needed to demonstrate materials are appropriate for use on Federal-aid construction projects.

Funds made available for the LCTM Program will be awarded for the use of substantially lower carbon materials and products on construction projects funded under title 23 U.S.C. and necessary work to identify appropriateness for use of these materials on eligible projects.

FHWA is requesting applications from eligible applicants other than the State DOTs. State DOTs were eligible to apply for LCTM funds under a Request for Applications, posted on FHWA’s Webpage at www.fhwa.dot.gov/lowcarbon/funding.cfm.

As part of the LCTM Program, this notice will result in the distribution of up to $800 million, subject to the availability of funds. This notice describes the application requirements, selection, and evaluation criteria.

For the purposes of this NOFO, materials/products available for reimbursement or incentives are those identified by the EPA Administrator2. In alignment with the Administration’s Federal Buy Clean Initiative, EPA released an Interim Determination (ID) in December 2022 that outlined an approach to establish thresholds and data requirements for qualifying concrete (and cement), glass, asphalt mix, and steel materials/products that meet the substantially lower embodied carbon requirements. For purposes of this NOFO, these are the only materials/products categories that are currently eligible.

An agency shall determine the substantially lower embodied carbon thresholds (i.e., best performing 20 percent, 40 percent, and industry averages) for materials/products eligible for reimbursement or incentive under this program through the following options:

• Option (1): An agency may reference the established thresholds as published on the FHWA Website4. Stakeholders from concrete, glass, asphalt, and steel industries are working to provide industry-average data to support implementation of the LCTM Program5.
• Option (2): An agency may determine local or regional thresholds for concrete (and cement), glass, asphalt mix, and/or steel. In this option, the agency shall follow accepted International Organization for Standardization (ISO) standards to develop thresholds. Agencies shall disclose the Global Warming Potential (GWP), the methodology for determining the percentiles and averages, the source(s) used for each material/product, and the parameters (including performance specification) used to set the GWP.

Agencies may also use a combination of these two options for this program. Under this NOFO, the LCTM Program will provide funds directly to recipients that will implement the provisions of the EPA’s ID for eligible low carbon transportation materials/products. Recipients may also be reimbursed for identification of eligible materials and work needed to determine their appropriateness for use on eligible projects, as discussed more in Section C Eligibility Information of this NOFO.

2. LCTM Program Goals

Program goals include, but are not limited to:

• Increase the use of lower carbon materials and products that are used in projects funded under Title 23.
• Facilitate the use of low carbon transportation materials while ensuring appropriateness for use in projects eligible under Title 23.
• Promote technology transfer and enhance workforce development to increase the adoption of environmental quantification techniques used in decision making by transportation agencies.
• Encourage eligible recipients to begin LCTM activities and build successful low carbon transportation material identification frameworks.

3. Administration Priorities and Departmental Strategic Plan Goals

The Department seeks to fund projects that advance the Departmental priorities of safety, climate change and sustainability, equity and environmental justice, and workforce development, job quality, and wealth creation as described in the DOT Strategic Plan, Research, Development and Technology Strategic Plan, and in executive orders (E.O.). Administration priorities will be considered as described in Section A.3. Illustrative examples are provided in Section E.2.

i. Safety

• DOT is committed to advancing safe, efficient transportation, including in the LCTM Program. Projects in the LCTM Program should provide substantial safety benefits (to commuters, workers, etc.) compared to existing conditions; mitigate to the extent practicable any significant safety risks that could result after the project’s completion; and do not negatively impact the safety of the traveling public, and any relevant group applicable to the program.

ii. Climate Change and Sustainability

• As part of the Biden-Harris Administration’s whole-of-Government Federal Buy Clean Initiative, and consistent with E.O. 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability (86 FR 70935), the EPA, the U.S. General Services Administration (GSA), and GSA/FHWA are closely collaborating to implement related efforts as part of IRA Sections 60112, 60116, 60503, and 60506. As FHWA and GSA implement programs to use and incentivize low-carbon materials, EPA is working to encourage increased Environmental Product Declaration (EPD) harmonization and availability through grant, technical assistance and carbon labeling programs for construction materials.
• DOT seeks to fund activities and projects under the LCTM Program that reduce GHG emissions from materials used in the transportation sector. DOT also seeks to incorporate evidence-based climate resilience measures and features, avoid adverse environmental impacts to air or water quality, wetlands, and endangered species, and address the disproportionate negative environmental impacts of transportation on communities with environmental justice concerns, consistent with E.O. 14096, Revitalizing Our Nation’s Commitment to Environmental Justice for All (88 FR 25251), and E.O. 14008, Tackling the Climate Crisis at Home and Abroad (86 FR 7619).

iii. Equity and Environmental Justice

• DOT seeks to fund activities and projects under the LCTM Program that will create positive outcomes that will reduce, mitigate, or reverse how a community is experiencing disadvantage through increasing affordable transportation options, improving health or safety, reducing pollution, connecting Americans to good-paying jobs, fighting climate change, and/or improving access to nature, resources, transportation or mobility, and quality of life. Applicants are strongly encouraged to use the DOT Equitable Transportation Community Explorer (arcgis.com) to understand how their project area is experiencing disadvantage in any of five areas that transportation projects with a direct relationship. Also, to identify and implement programs and policies that ensure the benefits of investments while mitigating economic displacement economically susceptible residents and businesses. Some examples include the preservation and/or production of affordable housing; expanding affordable, safe transportation and mobility options to areas where good jobs are concentrated; and supporting entrepreneurship, small business growth, tourism and access to capital through local hiring. The applicant will engage the public, including disadvantaged communities, during all phases of the project, including planning, design, construction, and implementation. For more information, see Three Major Components of DOT’s Justice40 Initiative.

iv. Workforce Development, Job Quality, and Wealth Creation

• DOT intends to use the LCTM Program to support the creation of good-paying jobs with the free and fair choice to join a union including through the use of a project labor agreement and the incorporation of strong labor standards and training and placement programs, especially registered apprenticeships, in project planning stages, consistent with E.O. 14025, Worker Organizing and Empowerment (86 FR 22829), and E.O. 14052, Implementation of the Infrastructure Investment and Jobs Act (86 FR 64335). Applicants are encouraged to review the Grant Application Checklist for a Strong Transportation Workforce and Labor Plan, that can be found on the DOT Navigator. DOT also intends to use the LCTM Program to support wealth creation, consistent with the DOT Equity Action Plan by adopting local and economic hiring preferences for the project workforce or include other changes to hiring policies and workplace cultures to promote the entry and retention of underrepresented populations; and through the inclusion of local inclusive economic development and entrepreneurship such as the use of the Disadvantaged Business Enterprises, Minority-owned Businesses, Women-owned Businesses, or 8(a) firms. DOT also intends to use the LCTM Program to support Made in America goals consistent with E.O. 14005, Ensuring the Future Is Made in All of America by All of America's Workers (86 FR 7475).

To view Frequently Asked Questions about LCTM click the link below, next to “Link to Additional Information".