Eligibility criteria - Funding activities and project types

We will only accept projects that fall under the following three categories:

1. Projects to repower existing vehicles:
2. Projects to purchase low-carbon alternative fuel vehicles; and
3. Projects to implement logistical best practices. (NEW!)

1. Projects to repower existing vehicles (“Repower”):

Includes repowering existing vehicles (i.e. their engines and/or drive trains) to operate with a lower-carbon or zero-emission alternative source of fuel such as repowering an eligible diesel truck to operate on natural gas, hydrogen, or electricity. Dual-fuel options are also eligible.

Eligible funding:

• The maximum amount payable per projects is $5,000,000 with the following conditions applied:
• The Program will provide funding of up to 50% of total project costs and applicants will contribute the remaining 50% as a combination of cash contributions, in-kind contributions, contributions from partners or funding from other government sources (see Stacking of assistance).
• Projects proposed by not-for-profit organizations or provincial, territorial, regional, or municipal governments or their departments or agencies, where applicable, as well as projects with Indigenous businesses or community groups, may request an increase in the maximum amount payable by this program, up to 75% of total project costs.
• Total funding from all levels of government cannot exceed 75% of the total project costs. Unless the applicant is a provincial, territorial, municipal government, or an Indigenous organization, then total funding from all levels of government cannot exceed 100% of total project costs.

Unique requirements:

• The new technology/equipment installed to repower a vehicle, must be a permanent modification.
• For this funding activity, we will only accept applications from organizations that either own or have a long-term lease agreement for a fleet of one or more eligible freight transportation vehicles. Please refer to “What vehicles are considered eligible?” for further information.
  • Any applicant that leases their fleet must have a long-term vehicle lease agreements in place (3 years or more post-project end date) and have the written authority from the lessor to make the modifications to the vehicles impacted by the proposed project. A copy of the long-term lease agreement must be provided at the time of application.

2. Projects to purchase low-carbon, alternative fuel vehicles (“Purchase”):

Includes purchasing new vehicles powered by a low-carbon alternative fuel sources such as a hydrogen internal combustion engine or natural gas vehicles.

Eligible funding:

• The maximum amount payable per projects is $5,000,000 with the following conditions applied:
• The Program will provide funding of up to 50% of the incremental cost for the purchase of a new vehicle powered by lower-carbon fuels compared to purchasing a conventional diesel truck. For example, if a single diesel truck costs $100,000 and a single lower-carbon alternative fuel truck costs $200,000, then NRCan would pay 50% of the $100,000 price differential - $50,000 per truck - and the applicant (and other contributors, if applicable) would be required to pay $150,000 to cover the remainder.
• Applicants will contribute the remaining 50% of the incremental costs, and the cost of the vehicle(s) as a combination of cash contributions, in-kind contributions, contributions from partners or funding from other government sources (see Stacking of assistance).
• The program will also provide funding of up to 50% of all other project costs.
• Projects by not-for-profit organizations or provincial, territorial, regional, or municipal governments or their departments or agencies, where applicable, as well as projects with Indigenous businesses or community groups, may request an increase in the maximum amount payable by this program up to 75% of the incremental costs associated with the new truck purchases, and up to 75% of all other project costs.
• Total funding from all levels of government cannot exceed 75% of the total project costs. Unless the applicant is a provincial, territorial, municipal government, or an Indigenous organization, then total funding from all levels of government cannot exceed 100% of total project costs.

Unique requirements:

• Applicants must provide an official quote from the manufacturer or vendor for the purchase price of a conventional diesel equivalent in truck class and body type to determine the incremental cost.
• For this funding activity, we will only accept applications from organizations where the applicant will fully own and operate the eligible freight transportation vehicles purchased as part of this project. We will not fund the procurement of leased low-carbon alternative fuel vehicles. Please refer to “What Vehicles are considered eligible?” for further information.
• Vehicle registration and ownership must be provided as part of the final report upon project completion, and necessary to demonstrate project completion.
• To be considered for funding to purchase a low-carbon alternative fuel vehicles, the applicant must commit to using a minimum average blend of 1% renewable or non-fossil fuels. This commitment must be in effect from the first time the vehicle is refueled to March 31, 2029.
• The program will not offer funding towards the purchase of zero-emission vehicles, as these fall under Transport Canada’s Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles Program (iMHZEV).

3. Projects to implement logistical best practices (“Logistical best practice”):

Includes implementing operational practices that aim to improve the fuel efficiency and reduce emissions generated during the transportation of goods.

Eligible funding:

• The maximum amount payable per projects is $1,000,000 with the following conditions applied:
• The Program will provide funding of up to 50% of total project costs up to $1,000,000 and applicants will contribute the remaining 50% as a combination of cash contributions, in-kind contributions, contributions from partners or funding from other government sources (see Stacking of assistance).
• Projects by not-for-profit organizations or provincial, territorial, regional, or municipal governments or their departments or agencies, where applicable, as well as projects with Indigenous businesses or community groups, may request an increase in the maximum amount payable by the program, up to 75% of total project costs.
• Total funding from all levels of government cannot exceed 75% of the total project costs. Unless the applicant is a provincial, territorial, municipal government, or an Indigenous organization, then total funding from all levels of government cannot exceed 100% of total project costs.

Unique requirements:

Projects must propose strategic solutions that would optimize logistics and operations. Proposed logistical best practice measures must fall within one or more the following categories:

• Cargo management measures; such as, but not limited to, trailer double decking systems, insulated bulkhead for refrigerator trailers, trailer lift axel, long combination vehicles, drop-frame trailers, load optimization software.
• Measures to reduce unnecessary (empty) miles; such as, but not limited to, route optimization software, co-loading for logistics and shipper companies.
• Implementation of innovative computer software; such as, but not limited to, system Integration using AI intelligence, transportation management systems.

Note: For this funding activity, we will only accept applications from organizations that either own or have a long-term lease agreement for a fleet of one or more eligible freight transportation vehicles. Please refer to “What vehicles are considered eligible?” for further information.

• Any applicant that leases their fleet must have a long-term vehicle lease agreements in place (3 years or more post-project end date) and have the written authority from the lessor to make the modifications to the vehicles impacted by the proposed project. A copy of the long-term lease agreement must be provided at the time of application.

Key Definitions

Enhanced fleet energy assessment

Enhanced fleet assessments cover large, complex fuel-reducing implementation projects for fleet(s) that require a higher level of details, commitments, and a strategic plan for implementation.

All proposals must include an enhanced fleet energy assessment with their application that references and recommends the activities proposed in your project. Please note the following specifications:

• The Applicant can independently conduct and submit a self-assessment or submit an assessment that was conducted by a third-party energy assessor on or after January 1, 2019, as long as the assessment meets the “Enhanced” requirements specified in the NRCan’s Fleet Energy Assessment Checklist.
• Applicants who wish to receive a grant for a fleet energy assessment completed by a third-party, please apply to Green Freight Program Stream 1.
• NRCan does not endorse the services of any contractor or any specific product and accepts no liability in the selection of materials products contractors or performance of workmanship.

Low-carbon alternative fuel

Fuels that emit fewer greenhouse gas emissions than fossil fuels (e.g. renewal natural gas, hydrogen, etc.).

It is mandatory that applicants proposing to purchase new low-carbon alternative vehicles commit to fueling their vehicles with a blend of at least 1% renewable or non-fossil fuels.

Merit points will be awarded to all applications that can commit to fueling their new or repowered vehicles with a 40% (or more) blend of renewable or non-fossil fuels.

This commitment applies from the time of the first refueling until March 31, 2027.

For more information on renewable fuels for transportation please consult the Alternative fuels for transportation webpage.