Greenhouse Gas Reduction Loan Program Criteria

Awards | Criteria | Eligibility | Application | Questions

The Department of Resources Recycling and Recovery (CalRecycle) offers the Greenhouse Gas (GHG) Reduction Loan Program pursuant to to Public Resources Code sections 42995-42998.

The purpose of this noncompetitive loan program is to lower overall greenhouse gas emissions by providing loans to expand existing capacity or establish new facilities to process California-generated waste materials into new value-added products.


Loan Recipient Search: Displays data on number of loans awarded, amounts, and how funds were used.


Approval of Criteria


Loan Applicant Type

Eligible applicants include:

    • Government
      • Cities and Counties
      • Regional or local sanitation agencies, waste agencies, or joint powers authorities.
    • Private, for-profit entities.
    • Nonprofit organizations (except private schools).

Facility/Manufacturer Type

    • Preprocessor
      • A preprocessor produces an intermediate product which requires further processing by another manufacturer.
      • The preprocessor must result in new diversion from landfills, e., beyond that which was already being diverted.
      • The preprocessor must provide proof of binding agreement with a California finished product producer that receives the preprocessed feedstock to make compost, soil amendments, biofuels, bioenergy, or recycled content finished products.
    • Finished Product Producer
      • A finished product producer makes a good or package in a form which requires no further processing or forming before it is offered for sale to an end-user. It does not include intermediate products, such as plastic pellets sold as feedstock to a converter for fabrication into a consumer product.
    • Food Waste Prevention
      • The loan program cannot finance equipment and machinery that will be located and operated by a third-party.

Project Location

    • A preprocessor who makes intermediate recycled-content intermediate products, must be located in California, and sell the products to Finished Product Producers that are also located in California.
    • Finished product producers must be located in California.

Feedstock Waste Material Types

    • Organics Projects: Organics (green waste and food waste) waste materials.
    • Recycled Fiber, Plastic, and Glass Projects: Recycled fiber (paper, textiles including mattresses, carpet, and wood), plastic, and glass waste materials.

Environmental Requirements

    • Greenhouse Gas Emission Reduction:
      Projects must be located in California and result in permanent, annual, and measurable reductions in greenhouse gas (GHG) emissions.
    • Feedstock/Waste Material Diversion from Landfills
      Projects must increase the quantity (tons) of:
    1. Organics projects: California-generated green or food materials, or alternative daily cover (ADC) newly diverted from landfills and composted or digested; or
    2. Recycled fiber, plastic, and glass projects: California-generated fiber, plastic, or glass materials newly diverted from landfills.

For purposes of this program, “newly diverted” means the tons of materials that are currently being landfilled or used as alternative daily cover that will instead be diverted as a result of this project.

Eligible Projects

    • Construction, renovation, or expansion of facilities to increase in-state infrastructure for:
    1. The digestion or composting of organics into compost, soil amendments, biofuels, or bioenergy; or
    2. The manufacturing of value-added finished products using California derived recycled content fiber, plastic, or glass.
    • Construction, renovation, or expansion of facilities to increase in-state infrastructure for:
    1. The preprocessing of organics when providing preprocessed materials to an in-state digestion or composting facility that is using the waste to make compost, soil amendments, biofuels, or bioenergy; or
    2. The preprocessing of fiber, plastic or glass waste when providing preprocessed materials to an in-state manufacturing facility that is using the waste to make finished products.
    • Expansion of projects that have previously received Greenhouse Gas Reduction grants or loans from CalRecycle are eligible provided the project meets the loan criteria and the previously funded project is progressing in a manner satisfactory to CalRecycle.
    • Food waste prevention projects result in measurable reduction in food waste normally destined for a These projects can prevent food waste through source reduction and/or edible food rescue. Food rescue must result in rescued food being distributed to people in a disadvantaged community with any food waste residuals from the project being sent to a compost, digestion, or fermentation facility when one is available within the food waste prevention project’s service area.
    • New and expanded facilities will be required to use the best available control technology (BACT) to limit emissions and ensure compliance with air quality standards.

Use of Loan Fund Disbursements

Eligible costs include:

    • Purchase of equipment and machinery.
    • Real estate improvements associated with the installation of the equipment and The land owner may need to provide a deed of trust to ensure that the loan has adequate collateral.
    • Purchase of real estate that is directly associated with the project’s material processing, where the real estate includes a building or other real estate improvements used solely for that processing or manufacturing.

Loans made to finance the purchase of commercial real estate and/or to make necessary real-estate improvements will require the application of sustainable building practices. At least 25 percent of the loan funds approved for improvements to property must be applied toward costs involving sustainable building products and services. Examples include the use of recycled paints, carpets, cubicles, and rubberized asphalt. The installation of energy efficient lighting, heating and cooling systems, water conservation and shade producing landscape would also apply.

Borrowers are required to provide invoices showing that 25 percent of the amount borrowed for improvements was used for sustainable building practices.

Ineligible costs include:

    • Working capital
    • Refinance of onerous debt
    • Payment of the loan closing fee

Permit and CEQA Requirements

Permit requirements are as follows:

    • Eligible projects do not qualify for a loan unless they are past the design phase of the project and are prepared for construction. Applicants must obtain all significant applicable federal, state, and local permits prior to CalRecycle Loan Committee consideration of the Significant permits may include: Air Permit, Water Quality Permit, Fire Permit, Solid Waste Facility Permit, Business License, and/or a Conditional Use Permit.
    • Applicants shall complete all California Environmental Quality Act (CEQA) requirements for their project before the loan request is presented to the loan committee.


Loan applications are accepted on a continuous basis and are available on the program’s Forms and Documents page.


If you have questions that are program-specific, please complete and submit our contact form or send an email to

Greenhouse Gas Reduction Loan Program Home

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