Canada launches its $1.5-billion Clean Fuels Fund, calling for project proposals

Canada’s $1.5-billion Clean Fuels Fund was launched today, calling for proposals for projects that increase the country’s capacity to produce clean fuels.

The announcement was made by Seamus O’Regan Jr., minister of natural resources, during the World Hydrogen Technologies Convention hosted by the Canadian Hydrogen and Fuel Cell Association and supported by the International Association for Hydrogen Energy. Introduced in the strengthened climate plan, A Healthy Environment and a Healthy Economy, and reaffirmed in Budget 2021, the fund grows the domestic clean fuels market, supports the implementation of the Clean Fuels Standard and delivers on early actions outlined in the Hydrogen Strategy for Canada.

The fund supports building new or expanding existing clean fuel production facilities, including hydrogen, renewable diesel, synthetic fuels, renewable natural gas and sustainable aviation fuel. Additionally, it supports feasibility and front-end engineering and design studies that will create jobs and enable the sector to grow at the size and pace required to contribute to Canada’s climate goals of a 2030 climate target and reaching net-zero by 2050.

“Clean fuels lower emissions, create jobs, increase our competitiveness and help us reach our climate goals,” O’Regan said. “The Clean Fuels Fund is how we get to net-zero by 2050.”

It will also establish biomass supply chains to improve logistics for the collection, supply and distribution of biomass materials, such as forest residues, municipal solid waste and agriculture crop residues, as well as the development of essential codes and standards. These investments benefit farmers, grain handlers, forest harvest operators, saw mills and municipal waste services by opening up new opportunities for both traditional feedstock products, such as canola and forest feedstock, as well as new value streams from agriculture, forest and municipal.

The call for proposals for projects to increase domestic clean fuel production capacity is open until Sept. 29, 2021. Natural Resources Canada will provide funding through conditionally repayable contribution agreements of up to 30 per cent of the total eligible project costs, to a maximum of $150 million, per project.

The Clean Fuels Fund addresses critical barriers to growth, such as upfront costs, in the domestic clean fuels market and lays the groundwork for the low carbon fuels of the future. This includes creating good, middle-class jobs for Canadians, and building a stronger and cleaner economy.