January 2025
Contents
- Purpose of this guide
- 1. Clean Fuels Fund overview
- 2. Program eligibility requirements
- 3. Funding provisions
- 4. Call for proposals
- 5. How to apply
- 6. Application information
- 6.1 Applicant information (mandatory information)
- 6.2 Project summary (mandatory information)
- 6.3 Project budget information (mandatory information)
- 6.4 Project readiness (merit criteria)
- 6.5 Project technical details (merit criteria)
- 6.6 Project activity details (merit criteria)
- 6.7 Financial feasibility (merit criteria)
- 6.8 Project partnerships (merit criteria)
- 6.9 Project risks and mitigation measures (merit criteria)
- 6.10 Project team Information (merit criteria)
- 7. Application Assessment Process
- 8. Contribution agreements
- Appendix A: Definitions
- Appendix B: Mandatory documentation checklist
Purpose of this guide
This guide is designed to assist applicants to prepare their submissions to the General Stream of the Clean Fuels Fund Program. It outlines the requirements for the Call for Proposals, including eligibility requirements, what documentation is required as a part of the submission and what information will be assessed to evaluate project merit.
Applicants are strongly encouraged to carefully review this Guide, including all definitions, prior to submitting their application. All required documentation must be submitted at the time of application. Incomplete submissions will be rejected but may be re-submitted before the application deadline or until funds are fully allocated, whichever comes first.
This guide is for informational purposes only and does not constitute a binding offer or guarantee. NRCan reserves the right to amend the guide or program terms at any time.
To access the on-line application system, see Section 5 of this guide.
1. Clean Fuels Fund overview
Canada is committed to achieving net-zero greenhouse gas emissions (GHG) by 2050 and reducing emissions by 40-45% below 2005 levels by 2030. A key piece of the existing program-based support to the sector is the Clean Fuels Fund (CFF), a $1.5B commitment, launched in 2021 to establish and grow the clean fuels sector in Canada. The CFF is designed to de-risk the capital investment required to build new or expand existing clean fuel production capacity. The Fund included support for the build out of new or expansion of existing clean fuel production capacity, including support for feasibility and FEED (Front-End Engineering and Design) studies; the establishment of biomass supply chains; and the development of critical codes, standards, and regulations. Projects funded under the first call for proposals need to be commissioned by March 31, 2026.
In a renewed commitment to Canadian clean fuel production, Budget 2024 announced a re-tooling of the Clean Fuels Fund program and a new call for proposals which would have a commissioning date of 2030.
Contributions made under the re-tooled Clean Fuels Fund (CFF) will:
- increase domestic clean fuel production capacity, supporting jobs in Canada, and reducing reliance on imports
- enhance competitiveness of Canadian clean fuels
- enable greenhouse gas reductions
- support compliance flexibility for regulated parties under federal regulations (e.g. Output-Based Carbon Pricing System Regulations, Clean Fuel Regulations)
The re-tooled CFF has three separate components:
- Building new domestic production capacity – General stream
- Capital Projects
- Feasibility and FEED Studies
- Building New Domestic Production Capacity – Indigenous-led Projects
- Capital Projects
- Feasibility and FEED Studies
- Developing Codes and Standards to support the development of critical codes, standards, and regulations
Components 1 and 2 above are delivered via the Clean Fuels Fund Program (the Program) while the Codes and Standards component is delivered separately.
This Guide governs the continuous intake of the General Stream of the Program and provides guidance on program requirements. Information on the Indigenous-led Projects stream is available in the guide dedicated to that program.
2. Program eligibility requirements
To be eligible for funding considerations under the Program, projects must meet all the eligibility requirements listed in this section. Applicants also need to provide all required information and documentation as outlined in Section 6 and Appendix B for the assessment of the project proposal.
2.1 Eligible recipients
To be considered for funding under the Program, applicants must be a legal entity validly incorporated or registered in Canada including not-for-profit and for-profit organizations, such as but not limited to:
- electricity or gas utilities
- private sector companies
- Indigenous organizations and Indigenous communities
Only one organization can be designated as the recipient of CFF funding. For joint ventures, consortiums, or the like, the applicant organization will become the legal signatory to the funding agreement and will be responsible for managing the project and reporting on results.
2.2 Eligible fuel types
The Program supports projects that are aiming to produce a wide range of clean fuels. Eligible fuel types include: all liquid or gaseous clean fuels that meet the carbon intensity requirements as outlined in sub-section 2.6 of this Applicant’s Guide. Studies (feasibility and FEED) for all hydrogen pathways could be supported by the Program as could capital projects for hydrogen pathways not supported by the Clean Hydrogen Investment Tax Credit. Ammonia eligible under the Clean Hydrogen Investment Tax Credit would not be eligible for funding.
2.3 Eligible activity
Eligible activities under the Program includes:
- Capital Projects – includes the expansion or conversion of existing clean fuel facilities, and buildout of new facilities in Canada
- Production Facility Feasibility Assessments (Studies) – which include feasibility studies and front-end engineering design (FEED) studies related to the buildout or expansion of clean fuel facilities in Canada.
Projects that do not directly result in new clean fuel production capacity are not supported. For example, fuel storage, distribution pipelines, or systems that facilitate the integration of clean fuels into end-use applications are not within the scope of the program.
The program does not consider the end use of the produced fuels.
2.4 Minimum production capacity thresholds
For liquid clean fuels, the minimum production capacity threshold is:
- 30 million liters per year, except
- 15 million liters per year in Atlantic Canada and the North
For gaseous clean fuels, the minimum production capacity threshold is:
- 50,000 gigajoules per year, except
- 30,000 gigajoules per year in Atlantic Canada and the North
For projects producing more than one eligible fuel type, at least one of the eligible fuels produced must meet the minimum production capacity threshold.
2.5 Technology readiness level (TRL)
Capital projects must use fuel production technologies in advanced stages of technological readiness (TRL 9). These projects are designed for commercial deployment, with the intent to operate the technology at commercial scale during its life cycle.
2.6 Maximum carbon intensity
The eligibility of clean fuel types supported under this part of the Program will depend on the fuel’s life cycle carbon intensity. The carbon intensity of eligible clean fuels must be equal to or below:
- Non-aviation liquid biofuels: 35 gCO2e/megajoule
- Sustainable aviation fuel: 40 gCO2e/ megajoule
- Gaseous (except hydrogen): 31 gCO2e/ megajoule
- Hydrogen: 35 gCO2e/megajoule
2.7 Commissioning or completion date
- Capital projects must be commissioned by no later than March 31, 2030
- Studies must be completed by no later than March 31, 2030
Please see Appendix A for the definition of commissioning date.
3. Funding provisions
3.1 Funding limits
- For capital projects the Program will provide up to 30% of total project costs up to a maximum of $50M
- For studies the Program will provide up to 75% of total project costs up to a maximum of $5M
3.2 Conditionally repayable and non-repayable contributions
The Program will offer two types of contributions, depending on the type of project to be funded:
- Conditionally repayable contributions, and
- Non-repayable contributions
3.2.1 Conditionally repayable contributions
Capital projects are eligible for conditionally repayable contributions. Repayment will be required after the official commissioning date from when the project starts to generate profit and for a period of up to ten (10) years. The recipient’s repayment amount will be determined annually based on profit for that year.
For conditionally repayable contributions, the requirements that may trigger repayments will be detailed in the Contribution Agreement along with the repayment process. Following the commissioning date, proponents will be required to provide an annual repayability report. The report will use Generally Accepted Accounting Principles (GAAP) or international financial reporting standards, to determine the profitability of the Project. If profit is generated in any given year, the amount to be repaid will be determined by the following:
Repayment = Annual Profit (net profit or income before income taxes) X percentage of NRCan funding
The value of government credits generated through offsets and other regulations from all levels of government will be considered in project profits and financial projections. For credits forecasted to be generated under the Clean Fuel Regulations, the credit clearing price set under the regulations should be used as a baseline. Applicants that assume a credit price higher than the credit clearing price must explicitly identify the risks associated with their assumption.
The Program reserves the right to assess profitability during the course of a project’s repayability period. If it is determined that there is no likelihood for the Project to generate profit, the Program, at its own discretion, may decide to revise the requirement for annual repayability reports on the profitability of the Project.
Example of a conditionally repayable contribution:
If Natural Resources Canada’s contribution is $45k towards the total project cost of $150k, (30% of costs), there would be an obligation to repay some of the profits up to a maximum of $45k.
For example:
In year one of operation, $60k of profit is generated. Then the amount required to repay would be:
$60k x 30% = $18k.
Leaving $27k of the original contribution as balance ($45k - $18k = $27k).
In year two of operation, no profit is generated. There is no requirement to repay since no profit is generated.
In year three of operation, $200k of profit is generated. The amount required to repay would be: $200k x 30% = $60k
Since only $27k of the original contribution remains to be repaid, the repayment for the 3rd year would be $27k.
Once this maximum repayment is met, no further repayments are required, regardless of whether additional profits are generated. After 10 years of operation, there will no longer be a requirement to repay, regardless of any remaining balance of the original contribution.
3.2.2 Non-repayable contributions
Contributions can also be non-repayable. These contributions are not required to be repaid by the applicant. Contributions are non-repayable for:
- feasibility and FEED studies
- projects with non-profit organizations
- projects with legal entities validly incorporated or registered in Canada that can demonstrate Indigenous ownership of the organization greater than 50% and who do not permit dividends to be paid or distributed to shareholders.
3.3 Stacking Provisions
Total Canadian government (includes federal, provincial, territorial, and municipal governments) contributions may not exceed 75% of total project costs, except in the case where the recipient is a provincial, territorial, regional, or municipal government or their department or agency, Indigenous business or community, or not-for-profit, in which case, the total Canadian government funding authorized will not exceed 100% of total project costs. The government of Canada’s Directive on Transfer Payments provides details on those contributions to be considered as a part of the stacking provisions.
To ensure the stacking provisions are respected, recipients will be required to disclose all anticipated Canadian and non-Canadian sources of funding for the proposed project prior to signing a Contribution Agreement and for the duration of the agreement. This includes, for example, financial sources from other Canadian federal, provincial, territorial and municipal programs.
If actual total government assistance to a recipient exceeds the stacking limits, Natural Resources Canada will adjust its level of funding to ensure the stacking limit is not exceeded and will seek reimbursement of funds if necessary.
Applicants must indicate all stackable funding in the Application Form.
3.4 Eligible expense period
Following project selection, successful applicants will be notified through a Letter of Conditional Approval (LOCA) and will be invited to initiate negotiations to develop a Contribution Agreement. Natural Resources Canada will reimburse recipients for eligible expenses the recipient has incurred starting on the date of execution of the Contribution Agreement until the project completion date stated in the Contribution Agreement or until Program funding authority ends. Program funding currently ends on March 31, 2030, therefore, all eligible expenditures for reimbursement must be incurred by then.
Expenditures incurred between the date of receiving the LOCA and the date on which a Contribution Agreement is signed by Canada fall outside the Eligible Expenditure Period and, although they may count towards Total Project Costs, they are not eligible for reimbursement by the Department. It is important to consult with an NRCan representative during this period prior to incurring expenditures as they can advise the proponent on the terms and conditions for reimbursement.
In all cases, until both parties sign a Contribution Agreement there is no commitment or obligation on the part of Natural Resources Canada to make a financial contribution to any project, including any expenditure incurred or paid prior to the signing of such a Contribution Agreement.
3.5 Eligible expenditures
Eligible expenditures must be directly related to the project and in support of the project’s activities. These expenditures should be incremental to normal operations and would typically not continue after the project completion date.
Eligible expenditures include:
Salaries: Salaries include wages for all personnel with direct involvement in the project, such as engineers, construction staff, and technical advisers. All eligible personnel must be employees on the proponent’s payroll. Payments such as shares, stock, stock options, etc., are not eligible. The amount invoiced shall be actual gross pay for the work performed and shall include no markup for profit, selling, administration, or financing.
The eligible payroll cost is the employee’s gross pay (normal periodic remuneration before deductions). Normal periodic remuneration rates are the regular pay rates for the period excluding premiums paid for overtime or shift work. The payroll rate does not include any reimbursement or benefit conferred in lieu of salaries or wages.
When hourly rates are charged for salaried personnel, the hourly rates shall be the periodic remuneration (annual, monthly, weekly, etc.) divided by the total paid hours in the period, including holidays, vacation, and paid sick days.
Labour claims must be supported by suitable documentation such as time sheets and records and be held for verification at time of audits. Management personnel are required to maintain appropriate records of the time devoted to the project.
Benefits: Benefits are defined as a reasonable prorated share of expenses associated with the direct labour cost, such as the employer’s portion of the Canada Pension Plan, Quebec Pension Plan, and employment insurance, employee benefits such as health plan and insurance, workers’ compensation, sick leave and vacation, plus any other employer-paid payroll-related expenses. Items with no relationship to the project or that have been charged on an indirect basis are not eligible. The determination of the fringe benefit amount shall be in accordance with GAAP. In general, the fringe benefit rate provided in the project estimate shall be computed once during the life of the project and agreed on prior to the signing of the agreement. If retroactive adjustments are made, they must be indicated on claims for progress payments for NRCan approval.
Professional services: Professional services are defined as costs for the purchase of additional support required for the completion of the project. Those costs can cover the following types of services: scientific, technical, management; contracting; engineering; construction; installation, testing and commissioning of equipment; data collection; and logistics. The amount eligible from a subcontractor, a consultant, or service provider shall be the actual contract amount, and a copy of the contract must be kept on file.
Reasonable travel costs: Treasury Board rates in effect at the time of the expenditure shall be used for reimbursing the following travel expenses in accordance with The National Joint Travel Directive, to cover the period during which the travel takes place: Travel, food, and lodging costs necessary for activities directly linked to the project., including transportation, meals and accommodation (as per the National Joint Council). Travel costs for activities that are not essential for the advancement of the project (e.g. conferences) are not accepted.
Capital expenses: Capital expenses are defined as an expenditure that results in an enduring benefit, as required by the project. They can include but are not limited to informatics, equipment and/or infrastructure. However, land is not considered an eligible expenditure under this program. The retrofitting or upgrading of existing capital assets is included under this category.
Rental fees or leasing costs: Rental fees include the cost of renting or leasing any equipment needed for the conduct of the project, which can include construction equipment.
License fees and permits: License and permit fees typically include any municipal, provincial, or federal licenses or permits for the project. This can include safety permits, business permits, environmental permits, etc.
Costs associated with Environmental Impact Assessments: Should an environmental assessment of the project be required, any costs related to that process would be included here. This could include costs for public consultation or preparing the environmental impact statement.
Overhead expenses: May include:
- administrative support provided directly to the project by the proponent’s employee(s), valued on the same basis as professional staff time
- heat, electricity, and office operating costs (e.g., internet and telephones), provided that they are directly related and incremental to the project
Overhead expenses will be negotiated and agreed to on an individual basis with the proponents before signing a Contribution Agreement. Any overhead claimed must be fully substantiated and must not exceed 15% of eligible expenditures.
3.6 Non-Eligible Expenditures
Costs that are not accepted by the Program are costs that are not eligible for reimbursement and cannot be included in the total project costs. This includes but is not limited to
- purchase of land
- fines and penalties
- lobbying activities for the purposes of obtaining contribution funding under the Program
The following costs could be counted toward total project costs but not eligible for reimbursement.
- costs incurred between the date the Letter of Conditional Approval (LOCA) is issued and the day before the contribution agreement is signed.
- in-kind contributions
4. Call for Proposals
Applications to the Program are invited through a national Call for Proposals. The Program will accept applications on a continuous intake basis until March 31, 2030, or until all funds are allocated, whichever comes first. Natural Resources Canada reserves the right to change the allocation and funding subject to there being an appropriation by Parliament for the fiscal year in which payments are to be made. Furthermore, Natural Resources Canada reserves the right to close the intake at any time.
To be considered for funding, applicants must complete and submit the on-line application form and provide all mandatory documentation as listed in Appendix B. Only completed applications will be considered for further assessment. Submission of a completed application does not guarantee applicants will receive funding under the Program. Failure to complete the application form, not complying with the criteria or not providing required documentation will result in the application being rejected. Rejected applicants may re-submit the proposal, however, applications will be reviewed in the order they are received, if they are complete. Only proposals meeting all program requirements, deemed complete, and in-scope by the Program will be evaluated and the selection of projects is based on the principle of “first come, first served.”
An applicant may submit proposals for multiple projects. In that case, separate application forms must be submitted for each project being proposed for funding.
5. How to apply
All applications will be accepted electronically through Salesforce. The Salesforce system is a secure environment, residing on Government of Canada servers where data is confidential. The application package (proposal) must be submitted through the Transportation and Fuels Decarbonization Program Portal (https://fuels-decarbonisation-carburants.canada.ca/) and consists of:
- a completed application form
- supporting documentation
- an attestation dated and signed by a duly authorized representative.
Any questions or inquiries regarding the CFF program must be sent by email to: cleanfuelsfund-fondsdecarburantspropres@nrcan-rncan.gc.ca
6. Application information
This section outlines the information required to fill out the application form. All information and documentation are required at the time of application for an application to be considered complete. Incomplete applications will be rejected, though they can be re-submitted. Please find a list of mandatory documents in Appendix B.
The following tables outline what information is required and provide specific details or considerations of each requirement. The tables also indicate whether the information is required for Capital Projects and Feasibility/FEED studies.
The Program will use the information to evaluate the proposals.
6.1 Applicant information (Mandatory information)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Legal entity | Indicate the name of the applicant (organization or company). If the project is selected for funding, the applicant will be the Legal Entity that will enter negotiations and sign a Contribution Agreement with Natural Resources Canada upon successful negotiations. | Proof of business incorporation, articles of incorporation, or registration | Required | Required |
| Corporate business address | Indicate the mailing address of the Canadian head office of the Legal Entity. | N/A | Required | Required |
| Main contact information | Indicate the full name, title, email address and telephone number of the main contact for the proposed project. The main contact does not need to be the signing authority for the Contribution Agreement. Describe the key responsibilities of the main project contact. | N/A | Required | Required |
| Applicant organization’s size | Indicate the current number of full-time equivalent employees under the Legal Entity. | N/A | Required | Required |
| Applicant organization’s background and capacity | Provide a brief history of the applicant organization (including a summary of partnership structures), mission and vision statement, length of time in operation of the applicant organization or partner company or parent company, services and expertise offered by the organization, the applicant’s experience and capacity to deliver the proposed project. If the applicant is working with partners, describe the partner’s experience and capacity to deliver the proposed project. | N/A | Required | Required |
6.2 Project summary (Mandatory information)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Project title | Indicate the title of the project. Note that if the proposal is approved for funding, the information provided as the project title will be disclosed publicly on the Government of Canada’s website. | N/A | Required | Required |
| Dates of planned project | Indicate the start date and commissioning, or completion, date of the proposed project. | N/A | Required | Required |
| Project location | Indicate the location of the facility being constructed or studied. | N/A | Required | Required |
| Project overview, objectives, and outcomes |
Provide an overview of the project, indicating the processes and technologies, which type of clean fuel will be produced, the type of feedstock to be used and the total new production capacity expected from the project. Note that if the project is approved for funding under the Program, the information provided as the Project Overview will be disclosed publicly on the Government of Canada’s website. It is understood by the Department that some of this information may not be available for studies. |
N/A | Required | Required |
| Anticipated jobs created from the project | Provide the number of new full-time equivalent and temporary (contractors, construction etc.) employees under the Legal Entity that are anticipated to result from this project. Include projected construction jobs and permanent positions after commissioning is completed. | N/A | Required | Required |
6.3 Project budget information (Mandatory information)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Project expenditure | Provide detailed information of project expenditures in the application form. Indicate eligible expenditures and ineligible expenditures by fiscal years. | N/A | Required | Required |
| Funding request | Indicate total project costs, requested amount of CFF funding, contribution from other sources, by fiscal year | N/A | Required | Required |
6.4 Project readiness (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Federal or provincial impact assessment |
Describe the state of preparedness of your project by indicating whether a federal and/or provincial impact assessment is required for the projects and steps taken to ensure that impact assessment requirements are met or in-progress. Please provide summaries of any relevant information related to federal or provincial impact assessments (e.g. reports on potential impacts on air, water or soil, regulatory tools etc.), if available, to demonstrate that the implication of the project has been considered. The Impact Assessment Act (IAA) is the legal basis for the federal environmental assessment process for most projects in Canada. The IAA establishes a framework for assessing the potential environmental, social, economic, and health impacts of major projects in Canada, ensuring sustainable development and fostering reconciliation with Indigenous peoples. Provide the names and contact information for municipal, provincial and federal governments leads for any ongoing Impact Assessment work. |
Reports related federal or provincial impact assessments, if applicable | Required, if applicable | Not required |
| Duty to consult |
The Government of Canada has a legal duty to consult with Indigenous groups, and where appropriate to accommodate when Canada is contemplating funding a project that may have an adverse impact on existing or potential Aboriginal or treaty rights. This is true whether those Aboriginal rights have been established (proven in court or agreed to in treaties) or whether there is potential for rights to exist. Natural Resources Canada is responsible for understanding how and when project funding could have an adverse impact on Aboriginal and treaty rights, and consultation should occur prior to NRCan providing funding to the recipient. To that end, provide information on engagement that has been undertaken with potentially impacted Indigenous communities. |
N/A | Required | Required |
| Workforce diversity and inclusion plan |
Applicants will be required to describe the Workforce Gender and Diversity Plan for their organization. The plan should describe the recipient’s approach to improving gender balance and increasing diversity within their organizations. Successful applicants will be required to share data on their workforce or the populations that benefit from the Program. This will include answering questions such as number and proportion of underrepresented groups (e.g., women, immigrants, visible minorities, youth, and Indigenous peoples) for the different positions (e.g., worker, management), job locations, and available training. This data, complemented with other sources (e.g., Census, Statistics Canada), will allow the Program to track progress regarding increasing workforce diversity. |
N/A | Required | Required |
| Outstanding legal action | Indicate whether there is any legal action currently underway or anticipated in the near future against the applicant, parent company(ies) or any partner(s), including any potential related financial loss, that could have a material impact on the project. | N/A | Required | Required |
| Project preparedness |
Indicate if the applicant has access to the site where the project will take place. If a fully executed site access agreement is not available at the time of application, conditional agreements or letters of intent for site access are required. Indicate if the applicant has feedstock supply agreement, fuel offtake agreement and CO2 offtake agreement (if applicable). Include description of expected sources of feedstock and offtake (including own use). Where possible, include distinction between executed agreements versus plans |
Executed site access agreement or permit or equivalent Feedstock supply and fuel offtake agreement Or plans for feedstock and fuel offtake |
Required | Not Required |
| Market analysis | Provide detailed market analysis and assessment, including market strategy and impact of the project, projected end-use markets and growth. | N/A | Required | Required |
6.5 Project technical details (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Project technical description | Describe the technical state of preparedness of the project such as the technology, production processes, feedstock, fuel types, major equipment supply, tools and infrastructure required to achieve the project’s goals. | N/A | Required | Required |
| Facility Description for the project being applied for | Provide detailed information on the proposed clean fuel facility, including how the project will integrate into previous and future operations, if applicable. | Facility process flow diagram, including facility unit operations and detailed information on all streams entering, within, and exiting the facility (for capital projects only) | Required | Required |
| Fuel carbon intensity |
Provide the anticipated fuel carbon intensity, as determined by the Government of Canada's Fuel Life Cycle Assessment (LCA) Model. Provide a brief description of the assumptions and calculations that determine that value. For more information on the LCA model, please visit: |
LCA report | Required | Required |
6.6 Project activity details (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Project activities timelines and related risks | Provide details on the different project activities (e.g., design, engineering, site preparation, permit acquisition, construction etc.), start and end date of each of the activities (including key historic milestones such as FEED studies), potential risk related to the activity and mitigation measures. | Executed agreements, Gantt chart, permits and licenses | Required | Required |
| Project benefits | Provide details on project co-benefits and socio-economic benefits (e.g., level of Small Medium Enterprise (SME) involvement, involvement of Indigenous organizations, local benefits, environmental benefits) | N/A | Required | Required |
6.7 Financial feasibility (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Audited or reviewed financial statements |
Public organizations must provide audited financial statements for the last three years, along with the independent auditors’ report. Private organizations must provide a complete set of audited annual financial statements for the last three years, along with the independent auditor’s report (if available). If audited statements are not available, the Chief Financial Officer, or other designated official, must certify interim financial statements. A complete set of statements includes: balance sheet or Statement of Financial Position, income statement, cash flow statement, and related notes accompanying the financial statement. If the organization has been in operation for less than three years, a guarantor will be required to provide a minimum of 3 years of audited financial statements. |
Audited or reviewed financial statement and Independent auditor’s report (if providing audited statements) or Interim financial statements certified by the Chief Financial Officer (if audited statements are not available) |
Required | Required |
| Budget and cashflow forecasts | Provide the organization’s budget, cash flow forecasts or a discounted cash flow model for at least five fiscal years. This should include major assumptions used to prepare the budgets and cash flow forecast and demonstrate the estimated costs of feedstock, energy and utilities flows, and finished fuel per unit of energy over the lifecycle of the project on a yearly basis. Also include analysis of the potential risks impacting the financial performance anticipated. The project budget must include all annual expenditures where each year starts on April 1 and ends on March 31. Overhead expenses directly related to the project will be considered to a maximum of 15% of total eligible project expenditures. Overhead expenditures claimed by recipients are to be reimbursed only if they are attributable to the project. |
Budget, cash flow forecasts or a discounted cash flow model for at least five fiscal years. | Required | Not required |
| Post-project financial projections and repayability | For capital projects, provide financial projections for the project for 10 years starting the year of project commissioning. Include the major assumptions used for the projections. The repayable contribution amount defined in Section 3 of this Guide should be included in the projections, if appropriate. | Post commissioning financial projections | Required | Not required |
| Class-3 cost estimate | For capital projects, provide a cost estimate that meets or exceeds a Class-3 level as per the American Association of Cost Engineers Cost Estimate Classification System. This cost estimate should be for all capital costs pertaining to the project and certified by a professional engineer. | Class-3 cost estimate | Required | Not required |
| Project contributions |
Indicate that at the time of application a minimum of 30% of total project costs have been secured or conditionally secured. This requirement applies to both capital projects and studies. Funding not secured at the time of application must be secured through firm financing prior to signing of contribution agreements Provide information on all sources of financial contributions towards the project. |
Examples include: a resolution or attestation from the governing council or CFO certified Letter of Commitment for Funding; or a commitment letter from a financial institution or an entity (e.g. parent company, investor or other municipal, provincial or federal government funding program) that demonstrates the financial capacity to provide the financing. The commitment letter should indicate that the funding is both available and has been allocated to the project. |
Required | Required |
6.8 Project partnerships (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Project partnership(s) | Indicate all project partners and explain the nature of partnerships. Describe in detail the partnership structure and provide any relevant documents describing the nature of the partnership. | Executed partnership agreements | Required | Required |
6.9 Project risks and mitigation measures (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/ FEED studies |
|---|---|---|---|---|
| Risks management and mitigation measures |
Provide details on project risks and mitigation measures including but not limited to:
Risks identified should be relevant to the project being applied for (e.g., facility construction for capital projects and report execution for studies) |
N/A | Required | Required |
6.10 Project team information (Merit criteria)
| Information | Description | Associated mandatory documentation | Capital projects | Feasibility/FEED studies |
|---|---|---|---|---|
| Corporate executive team’s capacity | Demonstrate that the applicant or the partner organization has relevant experience to deliver the project. For capital projects, specifically describe the executive team’s experience in complex project oversight in the energy sector), and in delivering projects similar in scope and scale to that being applied for | N/A | Required | Required |
| Project management team | Provide an overview of the project management team including their experience and role in the project. Describe how the project management team will work with the technical and financial team(s) to ensure that all critical decisions are made, and all key milestones and deliverables are achieved. | N/A | Required | Required |
| Technical team | Provide an overview of the technical team, including their experience and role in the project. Describe how the technical team will work with the project management team and financial team to ensure that all critical decisions are made, and all key milestones and deliverables are achieved. | N/A | Required | Required |
| Financial team | Provide an overview of the financial team, including their experience and role in the project. Describe how the financial team will work with the project management team and technical team to ensure that all critical decisions are made, and all key milestones and deliverables are achieved. | N/A | Required | Required |
7. Application Assessment Process
Applicants will be required to fill out the application form and submit a standardized set of documentation. Each application will go through a 4-stage review process: Completeness Review, Mandatory Information Review, Merit Criteria Review and Investment Committee Review.
In the first stage, the applications will be checked for completeness ensuring that all the eligibility requirements as listed in section 2 are met, questions in the application form are answered and that all mandatory documents are submitted as listed in Appendix B. Incomplete applications will be rejected, although applications can be re-submitted. Applications that are deemed complete will then undergo a mandatory information review where the applications will be reviewed to ensure that they have provided mandatory information about the project and applicant. Mandatory information is outlined in sub-sections 6.1, 6.2 and 6.3. Applicants will be notified at this stage whether their applications are complete and meet the Program’s requirements.
Applications that are complete and pass the mandatory information review will then be evaluated by an Evaluation Committee composed of technical and financial experts who will assess each application against the Program’s merit criteria using the Program’s merit criteria grid. The merit criteria for the Program are described in sub-sections 6.4 through 6.10.
Next, the Investment Committee consisting of senior management from across the federal government will review the strategic funding recommendations made by the Evaluation Committee, ensuring the recommendations align with the Program’s key objectives, and endorses the recommended projects for final approval.
Recommended projects are reviewed and approved for funding by the Program’s delegated authority. Applicants of projects approved for funding will receive Letters of Conditional Approval and the recipient will be invited to initiate the negotiation of a Contribution Agreement. Until a written Contribution Agreement is signed by both parties, no commitment or obligation exists on the part of Natural Resources Canada to make a financial contribution to any project.
8. Contribution agreements
This section contains information that will be relevant only to applicants who are selected to receive funding under the Program.
The submission of an application creates no obligation on the part of the Minister or of Natural Resources Canada officials to provide funding for the proposed project.
During the negotiation of the Contribution Agreement, the Department will only communicate with the applicant organization.
All Contribution Agreements must be finalized within six (6) months of receipt of the Letters of Conditional Approval. Those projects failing to finalize Contribution Agreements within 6 months will have their Letter of Conditional Approval revoked. Until a Contribution Agreement is signed by both parties, no commitment or obligation exists on the part of Natural Resources Canada to make a financial contribution to any project.
Project proposals that have been conditionally recommended for funding will undergo a due diligence assessment. This assessment will look at the applicant’s ability to complete the project and applicant may be required to provide further confirmation or clarification to support the project proposal. If in-depth financial analysis is required, the Program will inform the applicants and provide details on next steps. The outcomes of the due diligence process will be used to consider Natural Resources Canada’s ability to enter into a Contribution Agreement for the proposed project. For example, findings from the due diligence process might determine risk mitigation strategies that will be included in the Contribution Agreement such as monthly progress reports or percentage of risk holdback. If a project proposal is successful and the due diligence assessment results are acceptable, applicant will be entering into a Contribution Agreement with Natural Resources Canada and will be referred to as a proponent. Additionally, the monitoring strategies applied during the conduct of the project could be defined by the risk level identified. In this case, the Program would inform the recipient in writing.
Any announcement regarding departmental funding for the project must be developed collaboratively and mutually agreed upon by the department and the proponent.
8.1 Basis of payments
The Government of Canada’s fiscal year is the period beginning on April 1 and ending on March 31 in the following year. Multi-year agreements will establish a funding amount per fiscal year adding up to the total contribution under the agreement.
The payment schedule will be developed based on key project milestones and stipulated in the Contribution Agreement.
Contribution Agreements will also provide details regarding documentation that is required when submitting a claim for payment. The Contribution Agreement will also stipulate the start date and end date of eligible costs for each project.
8.2 Reporting requirements
Proponent reporting will be required at the project level and will be stipulated in the Contribution Agreement. Reporting will include, but is not limited to, periodic progress status reports to support claims for payments and post-project reports to confirm activities performed match those that were supported under the contribution.
Upon project completion, recipients will provide a comprehensive final report that details all project expenditures, with a declaration of the total amount of contributions or payments received from other sources in respect of the Project. Recipients will also provide a final narrative report to describe how project activities have contributed to the achievement of the objectives of the project and a final assessment of performance indicators to report on short term, intermediate term, and long-term outcomes of the project.
For capital projects that receive conditionally repayable contributions, Proponents will be required to submit annual reports during the repayment period, up to 10 years, which may include reporting requirements such production levels, carbon intensity of fuels produced.
8.3 Impact assessment considerations
Where applicable, projects under the Program will be assessed as per the Impact Assessment Act and other applicable legislation prior to funding being released to a proponent.
Applicants should clearly indicate in the Application Form if a federal Impact Assessment is required, as additional information may be requested by the Program. Applicants are required to submit any additional and relevant information regarding Impact Assessment at the application stage.
8.4 Duty to consult
The Government of Canada has a legal duty to consult with Indigenous groups, and where appropriate to accommodate, when Canada is contemplating funding a project that may have an adverse impact on existing or potential Aboriginal or treaty rights. This is true whether those Aboriginal rights have been established (proven in court or agreed to in treaties) or whether there is potential for rights to exist.
Natural Resources Canada is responsible for understanding how and when project funding could have an adverse impact on Aboriginal and treaty rights, and consultation should occur prior to Natural Resources Canada providing funding to the recipient.
To that end, applicants are required to provide information on their duty to consult obligations in the application form. Applicants are required to report if they have already conducted consultation or engagement activities related to the project proposal or as part of the applicant’s ongoing operations/corporate commitments. Applicants are asked to identify Indigenous groups they have interacted with and describe the type and frequency of activities undertaken. By signing and submitting an application under the Program, the signatory understands that Canada may withhold the payment or payments until Canada is satisfied that any legal duty to consult with, and where appropriate, to accommodate Indigenous groups has been met and continues to be met to Canada’s satisfaction.
For each project proposal that is approved for funding consideration and requires consultation with Indigenous groups, the applicant is responsible that a meaningful and adequate consultation process, commensurate with the severity of adverse impact and strength of the claims, has been undertaken.
8.5 Confidentiality and security of information
The Access to Information Act (the “Act”), governs the protection and disclosure of information, confidential or otherwise, supplied to a federal government institution.
Paragraph 20(1) (b) of the Act sets out two mandatory criteria to protect Applicant’s confidential information supplied to Natural Resource Canada from disclosure. First, the Applicant’s document supplied to Natural Resource Canada must contain financial, commercial, scientific, or technical information. Second, the Applicant must treat such information in a confidential manner. In other words, Natural Resources Canada will protect the Applicant’s confidential information in its possession as much as the applicant protects said confidential information in its own establishment.
For more information on this subject, please refer to Section 20 of the Access to Information Act.
8.6 Sharing of information
Natural Resources Canada might share information about the project with other federal government departments and agencies to explore other funding opportunities. Your consent is optional and can be indicated in the application form.
8.7 Doing Business with Sanctioned Countries
The contribution agreement contains provisions requiring compliance with all applicable laws. Canada has legislation in place to ensure avoidance of business dealings conducted in countries and with persons upon which it has imposed economic sanctions.
Accordingly, Proponents must be able to affirm the following statements:
- My organization does not conduct business dealings in any country against which Canada has imposed economic sanctions under the United Nations Act, Special Economic Measures Act or the Justice for Victims of Foreign Corrupt Officials (Sergei Magnitsky Law) (See Current sanctions imposed by Canada)
- My organization does not conduct business dealings with any persons that are listed in Canada’s sanctions legislation under the United Nations Act, Special Economic Measures Act or the Justice for Victims of Foreign Corrupt Officials (Sergei Magnitsky Law).
- My organization is not owned, or directly or indirectly held or controlled by a person (individual or corporate entity) that is listed in Canada’s sanctions legislation under the United Nations Act, Special Economic Measures Act or the Justice for Victims of Foreign Corrupt Officials (Sergei Magnitsky Law). For greater certainty, this would include shareholders or corporate entities anywhere in your corporate structure that are sanctioned under the aforementioned legislation.
- My organization acknowledges and agrees that there will be legally binding obligations in the Contribution Agreement to prohibit both any business dealings with, and to having any entity in the corporate structure owned, held or controlled by, any persons that are listed in Canada’s sanctions legislation (currently or in the future) under the United Nations Act, Special Economic Measures Act or the Justice for Victims of Foreign Corrupt Officials (Sergei Magnitsky Law).
For more information, visit Special Economic Measures Act website.
Appendix A: Definitions
“Applicant” is the person/organization who has submitted or is going to submit a proposal to the Clean Fuels Program.
“Atlantic Canada” are the provinces of Newfoundland and Labrador, Prince Edward Island, Nova Scotia and New Brunswick.
“Call for Project Proposals” means the period during which applications can be accepted through the online portal.
“Canada’s North” refers to the territories of Nunavut, the Northwest Territories and the Yukon.
“Carbon Intensity” in relation to a type of fuel, means the quantity of CO2e emissions that are emitted during the activities undertaken over the fuel’s lifecycle to the point the fuel is used. Units are expressed in grams of CO2e emitted, per megajoule of energy produced.
“Commissioning” is defined for the purposes of the Clean Fuels Program, as the process, certified and supported with documentation from a professional Engineer registered in Canada, during which the production facility is operational and has been fully assessed at the nameplate production capacity for a minimum period of three consecutive days, and said Engineer has attested that the fuel meets industry established quality specifications. The Program reserves the right to provide further details pertaining to acceptable industry established quality specifications in contribution agreements. Please note that in the application form, the “end date” for capital projects refers to the commissioning date.
“Duty authorized officer” means an individual who has been officially granted the authority to act on behalf of an organization or entity in official matters. This person is usually someone in a position of authority, such as a CEO, CFO, or a specific officer designated by the organization's governing documents.
“Facility Conversion” is the retrofitting of an existing production facility to produce clean fuels.
“Facility Expansion” is the installation of additional clean fuel production capacity to an existing production facility.
“Feasibility study” is a comprehensive analysis conducted to determine the practicality and viability of a proposed project. It typically evaluates technical, economic, legal, environmental, and operational aspects to ascertain the real-world viability of the project and the likelihood that the project may be completed successfully.
“FEED study” typically include a comprehensive project plan laying out the technical requirements, economic and environmental viability, detailed drawings, specifications and calculations, project’s overall budget, potential risks and a detailed timeline for project completion. The goal of FEED is to ensure that all project requirements are well-defined to reduce risks and unexpected changes during later stages.
“Firm Financing” means financing that is committed and documented at the time of application and verifiable by Natural Resources Canada. This could include financing that is conditional on approval of CFF funding.
“Full-time Equivalent (FTE) Employees” is a measure that standardizes the number of hours worked by all employees—both full-time and part-time—into the equivalent number of full-time hours. To calculate FTEs, the total number of hours worked by all employees during a specific period is divided by the standard number of hours that a full-time employee is expected to work in that same period. For information on full-time and part-time work hours, please visit Statistics Canada
“Guarantor” is a person or entity that agrees to pay the debts of a borrower if the borrower defaults on their loan obligation.
“In-kind” means a contribution from a Proponent and/or its partners which is not a cash contribution, but which is verifiable and is directly attributable to the Project. In-kind contributions must be documented at fair market value.
“New Build” is the construction of a production facility that is not a part of a facility conversion, or a facility expansion.
“Official Commissioning Date” is the date on which the professional Engineer, registered in Canada, has attested that Commissioning of the project is complete.
“Production Facility” means any facility in Canada at which fuel is produced, and is located at the address listed in the project proposal.
“Profit” means net income as determined by Generally Accepted Accounting Principles derived directly from the Project (e.g. net income from operations of a clean fuels production facility supported by the Program).
“Project proposal” or “Application” means a completed proposal, and all required supporting documentation, submitted to the Clean Fuels Program.
“Renewable Natural Gas” means gas that meets the standard for injection into the closest natural gas pipeline and that is either synthetic natural gas from biomass or derived from processing biogas.
“Total Project Costs” means the Contribution and other verifiable cash or in-kind contributions either received or contributed by the Proponent and directly attributable to the Project.
“TRL” means the Technical Readiness Level as specified by Innovation, Science and Economic Development Canada (www.ic.gc.ca/eic/site/080.nsf/eng/00002.html).
Appendix B: Mandatory documentation checklist
The following documentation must be included in order for an application to be deemed complete.
| Mandatory Documents | Capital Projects | Feasibility/FEED Studies |
|---|---|---|
| Proof of Business Incorporation, Articles of Incorporation or Registration | ||
| Financial statements of the applicant organization or guarantor | ||
| Proof of firm financing and conditional financing for the project | ||
| Feasibility/FEED study associated with the capital project | (for FEED studies only) | |
| Class-3 cost estimate as per the American Association of Cost Engineers Cost Estimate Classification System | ||
| Facility process flow diagram, including facility unit operations and detailed information on all streams entering, within, and exiting the facility. | ||
| Description of feedstock supply and fuel offtake and CO2 offtake (if applicable) agreements and plans. Include description of expected sources of feedstock and offtake (including own use). Where possible, include distinction between executed agreements versus plans. | ||
| Applicant’s Operating Budget, Cash Flow Forecast and/or discounted cash flow model over 5 fiscal years. Please include analysis of the potential risks impacting the financial performance anticipated and major assumptions used to prepare the Budgets and Cash Flow Forecast. Please provide key economic assumptions (e.g., consumer price index (CPI) and producer price index (PPI), discount rate, feedstock price/escalation, product selling price, utility prices) | ||
|
Project Financial Projections for 10 years starting the year of project commissioning. Include the major assumptions used for the projections. The Repayment Amount defined in section 3.2 should be included in the projections |
||
| Proof of site access permits, other permits and their status, and their expected requirement dates | ||
| Reports related to federal or provincial Impact Assessment (if applicable) | ||
| Fuel Carbon Intensity Report | ||
|
Provide the key milestones (Gantt chart) and the critical path for the proposed project. Ensure to include the following:
Examples of key milestones could include: engineering, procuring and construction/commissioning in place; required permits and licenses; and access to Land Agreements. For each milestone, identify all and any potential risks, as well as proposed mitigation measures. Key milestones should be specific, measurable, realistic and relevant to the project objective(s). List all key milestones and associated activities in a logical sequence, including the timelines and/or duration of each, as well as descriptions. All project activities must be completed, including commissioning for construction projects, by March 31, 2030 |