Indigenous organizations show ‘limited interest’ in Ottawa’s clean fuel fund

A fund designed to kick-start clean fuel projects has received “limited interest” from Indigenous organizations, a Canada’s National Observer access-to-information request has found.

Natural Resources Canada’s Clean Energy Fund has allocated $1.5 billion to expand clean fuels like hydrogen, renewable diesel and natural gas, and biofuels. Natural Resources Canada has hit a roadblock on Indigenous participation despite a $250 million allocation of the larger fund for Indigenous-led projects.

The ministry has also tried significant outreach like webinars and meetings to promote the program with little success, the access-to-information documents showed.

Several applications for the Indigenous-led allocation did not meet the eligibility requirement of 50 per cent ownership. And only four applications were deemed to be completed and are under assessment by Natural Resources Canada.

Those inside Natural Resources Canada believe the program as it stands now is too stringent and requires more flexibility, Natural Resources Canada said in a written response via email.

Ottawa has a blind spot when it comes to helping Indigenous communities develop clean energy strategies, said James Jenkins, executive director of Indigenous Clean Energy, a non-profit that supports Indigenous access and inclusion in the energy transition. Ottawa has tried to include First Nations with initiatives such as the Indigenous Off-Diesel Initiative and the Indigenous Natural Resource Partnerships program.

The problem isn’t a lack of interest by Indigenous organizations. Instead, there isn’t the capacity to develop and expand partnerships with the non-Indigenous green energy players in the market, Jenkins explained.

“There’s still a need for more targeted programming to build capacity to support the partnerships,” Jenkins said.

In the biofuel space, for example, partnerships between Indigenous organizations and non-Indigenous businesses haven’t yet developed, leaving an administrative and expertise gap within Indigenous leadership. And so, there is a need for more “boots on the ground” in the initial stages of development to effectively partner with the larger non-Indigenous firms, Jenkins added.

Accessing capital is another obstacle for Indigenous businesses.

In a separate access-to-information request filed by Canada’s National Observer to Pacific Economic Development Canada, it was revealed more than 51 per cent of Indigenous startups and firms have difficulty raising capital. Many Indigenous entrepreneurs have little liquidity or collateral to leverage loans to build their organization, the access-to-information documents showed.

Jenkins points to Indigenous aviation companies in the Arctic and northern provinces or Indigenous-owned sawmills that could benefit from clean fuels to become more sustainable as the world’s energy transition marches forward.

The clean fuel fund is exploring options for a redesign and intends to launch an updated call for project proposals with more flexibility for Indigenous applications this fall, Natural Resources Canada said.

It’s unclear if Natural Resources Canada will reduce the requirement of 50 per cent Indigenous ownership. The agency did not get back to Canada’s National Observer by the time of publication.

Matteo Cimellaro is a Local Journalism Initiative Reporter for Canada’s National Observer.