Clean Fuels Fund

Canada’s economy will need to be powered by clean power and clean fuels to meet its goal of net-zero emissions by 2050

Fuelling the future

Recognizing the essential role of clean fuels, Canada’s Emissions Reduction Plan includes broad economic policies, such as the Clean Fuel Regulations, increases to the carbon pollution price, the Hydrogen Strategy for Canada, and investments to grow the clean fuels market.

Budget 2021 invested $1.5 billion over five years to establish a Clean Fuels Fund to de-risk the capital investment required to build new or expand existing clean fuel production facilities (including facility conversions). Support was also available for feasibility and front-end engineering and design (FEED) studies, and the establishment of biomass supply chains to improve logistics for the collection, supply, and distribution of biomass materials (e.g., forest residues, municipal solid waste, and agriculture crop residues) as a feedstock in clean fuel production facilities. Resources were also available to address gaps and misalignment in codes, standards and regulations related to the production, distribution and end-use of clean fuels.

Budget 2024 announced the retooling of the Clean Fuels Fund and its extension to March 31, 2030. Support will be available to de-risk capital investments and studies that expand Canada’s clean fuel production capacity, and to address gaps and misalignment in codes, standards and regulations. The program will shift to a continuous intake process to deliver funding faster and will streamline negotiations and decision-making processes to expedite delivery.

Indigenous-led building new domestic production capacity

Open for applications – an updated call for project proposals will launch early in 2025, with new project criteria.

Current Funding available: This first national call for proposals provides funding up to $150M million per project to a maximum of 50% of total project costs until new program criteria are established in early 2025 (This is for the Indigenous Led Production Projects. For the studies, the number is different: provide funding up to $5 million per project to a maximum of 75% of total project costs)

Current Program timeframe: projects must be completed by March 31, 2026 until new program criteria are established in early 2025

Building new domestic production capacity

Closed for applications – an updated launch for project proposals will launch in early 2025

Funding available: This first national call for proposals provided funding up to $150 million per project to a maximum of 50% of total project costs

Status: This call for proposals is closed. A new call for proposals will launch in early 2025.

Establishing biomass supply chains

Closed for applications

Funding available: This first national call for proposals will provide funding up to $5 million per project to a maximum of 50% for non-Indigenous applicants or 75% for Indigenous applicants

Status: This call for proposals is closed.

The evaluation process

1. Completeness Review

The Program reviews applications to ensure all required mandatory information has been included in the application package and ensures there were no technical/systemic issues with attachments.

Applicants who have submitted packages deemed incomplete will receive a notice that no further consideration will be given to their application.

2. Mandatory Criteria Review

The Program assesses the applications deemed complete against mandatory criteria as outlined in the program guide.

Applicants whose projects meet mandatory criteria will receive a notice indicating that their application will be fully assessed by the Evaluation Committee.

Applicants whose projects do not meet mandatory criteria will receive a notice that no further consideration will be given to their application.

3. Evaluation Committee

A multi-disciplinary, multi-department Evaluation Committee, composed of technical and financial experts, assess applications that meet all mandatory criteria, and rate them against the program’s merit criteria grid. Once all applications are assessed, the Evaluation Committee prepares the strategic funding recommendations that takes into account application scoring and other criteria to ensure program goals/targets are met.

4. Investment Committee Validation

The Investment Committee, composed of Director Generals from multiple government departments, reviews and validates the strategic funding recommendations ensuring the recommendations align with the Program’s key objectives, and endorses the recommended projects for final approval.

5. Final Project Decision

Recommended projects are reviewed and approved for funding by the Program’s delegated authority.

Applicants of projects approved for funding will receive a Letter of Conditional Approval and negotiation of a contribution agreement can commence.

Applicants who’s projects meet/exceed the established merit threshold, yet do not rank high enough to access the funding available, will receive a Letter of Regret that includes a statement notifying applicants that should additional funding become available in the future the project may be given further consideration.

Applicants, whose projects do not meet the established merit threshold, will receive a Letter of Regret.

Benefits of growing the clean fuels market

Growing the clean fuels market will seizing the opportunities for clean fuels to build a sustainable, low-carbon future that will support Canadians through:

We’re taking an all-of-government approach

Including clean fuels in Canada’s net-zero future will take an all-of-government approach, using a comprehensive suite of measures. Here’s how the government is laying the foundation for our clean energy future.