Pollution and Costs Reduction Act

Pollution and Costs Reduction Act - Amends the Clean Air Act to require the Administrator of the Environmental Protection Agency (EPA) to establish and carry out the Building Pollution Reduction Program to provide assistance to owners of buildings in the United States to reduce the emission of air pollutants and building operating costs by constructing highly efficient buildings or increasing the efficiency of, and reducing the greenhouse gas emissions associated with, existing buildings.

Defines "advanced green biofuel" to mean an advanced biofuel that the Administrator determines: (1) has life cycle greenhouse gas emissions that are at least 60% less than the baseline life cycle greenhouse gas emissions; (2) is made from advanced renewable biomass; and (3) minimizes biorefinery water requirements to the maximum extent achievable, taking into consideration costs and other appropriate factors.

Defines "advanced renewable biomass" to mean renewable biomass that is produced using sustainable practices as determined by the Administrator taking into consideration factors such as: (1) the maintenance and enhancement of the quality and productivity of the soil; (2) the conservation of soil, water, energy, natural resources, and fish, and wildlife habitat; and (3) the protection of the health and safety of individuals involved in the production system.

Requires the Administrator to establish the 1,000,000,000-Gallon Challenge Grant Program under which the Administrator shall provide grants to owners and operators of projects that have the potential, in the aggregate, to produce up to 500,000,000 gallons in annual domestic production capacity of advanced green biofuels. Requires the Administrator to provide four types of grants: (1) a research and development grant; (2) a planning grant; (3) translational grants; and (4) construction grants.