Energy Innovation Program On-road Transportation Decarbonization Call for Proposals Applicants’ Guide

Status: Closed to applications

Expected outcomes and focus areas

This call for proposals (“the call”) will fund research and development (R&D) projects and demonstration projects that will help decarbonize the transportation sector by addressing technical and market innovation barriers in Canada in two focus areas:

Focus area 1: Low- and zero-emission on-road medium- and heavy-duty vehicles (MHDVs)

Focus area 2: Infrastructure supporting on-road zero-emission vehicles (ZEVs) and overall transportation system efficiency

Note:
Projects that consist solely of purchasing commercially available ZEVs or the supporting infrastructure are not eligible under this call. See the Project Scope Eligibility subsection of this guide for more details on restrictions.

Eligibility

Applicant eligibility

The call is open to the following applicants:

1. Legal entities incorporated or registered in Canada, including:
   1. For-profit and not-for-profit organizations such as electricity and gas utilities, companies, industry associations, research associations, and standards organizations
   2. Community groups
   3. Canadian academic institutions
2. Provincial, territorial, regional, and municipal governments and their departments and agencies, where applicable
3. Indigenous applicants:
   • Indigenous communities
   • For-profit and not-for-profit businesses and organizations that clearly demonstrate ownership and controlling interests by Indigenous groups.
   • First Nations (bands or councils under the Indian Act)
   • Tribal councils
   • Inuit organizations
     
     The term “Indigenous” is understood to include Inuit, Métis, First Nations, Status Indian and non-Status Indian individuals or any combination thereof.

It is expected that the proponent, i.e. the entity that will sign a contribution agreement with Natural Resources Canada (NRCan), will be the majority owner of any assets purchased in full or in part through funding provided by NRCan.

Eligibility of the project type, activities and technology readiness level

The call is open to R&D and demonstration projects. Applicants are required to classify their project type as either R&D or demonstration in their submission. Eligible activities and technology readiness levels (TRLs) for each of these two project types are described below.

R&D projects

Eligible R&D activities

1. Development, assessment, testing and integration of novel and innovative equipment, vehicle components, software, and methodologies, such as:
   1. Proof of concept of technologies that include significant technical risk, including field trials, bench-scale testing, pilots, and prototypes
   2. Analytical tools and modelling software
2. Pre-demonstration field trials – limited duration tests designed to identify further R&D needs before a technology can proceed to a pre-commercialization demonstration. Such testing is expected to operate for only a short period.

Note: Projects that primarily focus on developing or enhancing codes and standards are not eligible. However, projects that primarily focus on eligible R&D activities and also include elements that support developing or enhancing codes and standards will be eligible. The submission for such project should fully outline the elements and projected outcomes related to the codes and standards.

Eligible TRLs for R&D projects

R&D projects must have a current technology readiness level (TRL) of at least 3. See Appendix A for definitions of TRLs used by the Energy Innovation Program (EIP or “the Program”).

Demonstration projects

Eligible demonstration activities

1. Installation of a pre-commercial technology with the intent that it continues to operate in its intended operational environment
2. Modification of existing processes, equipment, or systems to accommodate an innovative technology or process;
3. Installation of equipment and/or infrastructure to support a demonstration, or multiple demonstrations
4. Associated costs for the engineering, design and permitting of an installation as identified above, including if required as part of a demonstration
5. Operation, performance testing, and analysis of pre-commercial equipment in its intended environment to assess performance of an innovation

Note: Front-end engineering designs (FEED) are eligible under this call only if they are leading to a demonstration under the same proposed project. The submission must clearly outline the critical path between the FEED and the demonstration phases of the project, including the go/no-go decision points and the risk management strategy.    

Eligible TRLs for demonstration projects

Demonstration projects must have a current TRL of at least 5 and must achieve a TRL of at least 8 by the end of the project. See Appendix A for definitions of TRLs used by the EIP.

Ineligible activities

R&D projects or demonstration projects that have the following primary outputs or activities are not eligible:

• Capacity building and training
• Assessments or characterization studies, including data compilations and syntheses
• The use of existing software, models or tools to run scenarios or identify innovation needs
• Reviewing evidence supporting existing codes and standards or adopting international codes and standards for Canada

However, these activities or outputs could be included as tasks that lead to the development or demonstration of new science and technology tools, technologies or systems, acknowledging the preceding descriptions of eligible activities for R&D and demonstration projects.

Project scope eligibility

This subsection provides guidance on project scope eligibility for the two focus areas included in this call. As mentioned in the first section of this guide, projects that consist solely of buying commercially available vehicles or the associated infrastructure are not eligible under this call. Additionally, R&D projects and demonstration projects that focus on the following are not eligible under the current call:

• Off-road vehicles (mining, forestry, agriculture, construction) or their supporting infrastructure
• Other modes of transportation (air, rail, marine) or their supporting infrastructure
• Battery supply chain, manufacturing, or “inside-the-cell” components
• Energy storage
• Grid-side solutions that are asset-agnostic, such as distributed energy resources management systems (DERMS), virtual power plant (VPP) models, electricity rate trials or other incentives. However, vehicle-to-everything (V2X) projects that focus on the functionality of the vehicle or charger, but not on the functionality of the grid connected to it, are eligible.

Note that the list of restrictions includes important innovation priorities for Canada’s path to net-zero. NRCan will consider future programming to support those priorities.

Focus area 1. Low- and zero-emission on-road MHDVs

Under focus area 1, the call will support energy innovation projects that address barriers to the demonstration or deployment of low- and zero-emission on-road MHDVs.

Note the following project eligibility information:

• Projects must focus on at least one of the priorities outlined in the following table.
• Eligibility is established for each priority based on the vehicle platform category, as well as on the vehicle segment category.
• Priorities B and D are open to demonstration projects only; other priorities are open to both R&D projects and demonstration projects.

 

Focus area 1. Low- and zero-emission on-road MHDVs

Priority	Platform	SegmentFootnote 1
A. Reduce the cost/performance ratio of electrical powertrain components outside the battery cells. Note: Projects that focus on “outside-the-cell” battery module components such as the battery management system (BMS) are eligible.	battery (including plug-in hybrid)	classes 2B to 8 MHDVs
B. Demonstrate novel-use cases of battery electric on-road MHDVs. Note: Open to demonstration projects only
C. Reduce the cost/performance ratio of hydrogen fuel cell technologies for on-road class 8 heavy-duty vehicles (HDVs).	hydrogen fuel cell	class 8 HDVs
D. Demonstrate novel-use cases of hydrogen fuel cell technologies for on-road class 8 HDVs. Note: - Open to demonstration projects only - Projects that use hydrogen produced from unabated fossil fuels are not eligible under this priority.
E. Reduce the overall greenhouse gas emissions of on-road internal combustion engine class 8 HDVs through hybridization, heat harvesting, or vehicle optimization for low-carbon fuels. Note: Demonstrations of vehicles at the fleet level are not eligible.	internal combustion engine (including hybrid)	class 8 HDVs
F. Improve the energy efficiency of on-road MHDVs through lightweighting by using advanced materials.	battery (including plug-in hybrid)	classes 2B to 8 MHDVs
	hydrogen fuel cell	class 8 HDVs
	internal combustion engine (including hybrid)	class 8 HDVs

Focus area 2. Infrastructure supporting zero-emission on-road vehicles and overall transportation system efficiency

Under focus area 2, the call will support R&D projects and demonstration projects that address barriers to the uptake of zero-emission on-road vehicles or improve the overall transportation system efficiency.

To be eligible under focus area 2:

• R&D projects must be related to a physical infrastructure but are not required to include installing the said infrastructure as part of the project.
• Demonstration projects must include installing a physical infrastructure.
• All projects must focus on at least one of the priorities outlined in the following table. Note that eligibility is established for each priority based on the dots in both the vehicle platform category and the platform category. For example, projects that address priority A must focus on battery-powered vehicles (platform) and are eligible on the light-duty vehicle (LDV) segment, but not on the MHDV segments.

Focus area 2. Infrastructure supporting on-road ZEVs and overall transportation system efficiency

Priority	Platform Battery: 100% electric or plug-in hybrid H2FC: hydrogen fuel cell ICE: internal combustion engine (including hybrid)			SegmentFootnote 2
	Battery	H2FC	ICE	LDV	MHDV (all classes)
A. Affordable charging solutions for multi-unit residential buildings, dwellings that lack access to a driveway or a garage, or residential rental properties.
B. Improve uptake of zero-emission transportation technologies and required infrastructure in rural, remote, and northern communities.Footnote 3 Examples include: Improve the reliability of electric vehicle charging solutions in Canadian extreme cold weather. Remote monitoring and swift issue resolution of charging stations in remote locations. Mobile charging stations for roadside assistance.
C. Charging or refueling solutions addressing barriers that are specific to zero-emission fleets and/or to zero-emission MHDVs, such as placement, power requirements and grid impact. Note: projects that use hydrogen produced from unabated fossil fuels are not eligible under this priority.
D. Improve transportation system energy efficiency by developing or demonstrating innovative infrastructure solutions, such as intelligent transportation systemsFootnote 4 or mode confluence through multi-modal charging hubs.

Funding

This call is open to R&D projects that request between $500,000 and $1,500,000 (comprising up to 75% of total project costs) and demonstration projects that request between $1,000,000 and $5,000,000 (comprising up to 50% of total project costs), both over a period of up to five years starting on or after April 1, 2024.

The EIP provides non-repayable contributions for both types of projects.
Note: Indigenous applicants, as defined under paragraph 3 of the Applicant Eligibility subsection of this guide, can request a contribution comprising up to 100% of total project costs, subject to the same maximum dollar amount indicated in the following table.

Project type	Minimum Program contributions	Maximum Program contributions	Project length
R&D project	$500,000 Up to 75% of total project costs (up to 100% for Indigenous applicants)	$1,500,000 Up to 75% of total project costs (up to 100% for Indigenous applicants)	Up to 5 years
Demonstration project	$1,000,000 Up to 50% of total project costs (up to 100% for Indigenous applicants)	$5,000,000 Up to 50% of total project costs (up to 100% for Indigenous applicants)	Up to 5 years

Eligible project expenditures can begin once the applicant has been notified in writing by NRCan that the project has been selected for funding under the EIP. However, note that the retroactivity period and the amount that can be claimed retroactively are subject to restrictions which will be communicated to selected applicants.

For more information on eligible expenditures and non-permissible costs, see Appendix C.

Prior to signing contribution agreements, on an annual basis, and upon project completion, proponents will be required to disclose all sources of funding on individual projects. This includes contributions from other federal, provincial, territorial, and municipal governments and industry sources.

Collaboration and leveraging are strongly encouraged for all project components, and these will be included in the selection criteria. Additional points will be awarded in the evaluation of proposed projects that leverage funding from non-government sources. Note that this does not apply to Indigenous applicants, given their eligibility for a contribution of up to 100% of total project costs.

Stacking limit

Stacking of funding (i.e. total government support for a project) will be supported to a maximum of 100% of eligible expenditures.

How to apply

The call’s projects selection process has two phases:

• expression of interest (EOI) phase, open to all eligible applicants
• full project proposal (FPP) phase, open to invited applicants only

To apply, applicants must complete and submit their EOI via the Applicant Portal by 11:59 p.m. PT on July 20, 2023.

Applicants are responsible for ensuring that they meet the eligibility criteria and that their EOI is fully completed and successfully submitted by the deadline.

NRCan reserves the right to apply the following additional criteria when selecting projects at the EOI and FPP stages:

• Projects that support departmental priorities such as regional balance in Canada, advancing inclusion, diversity, equity, and accessibility (IDEA) in the natural resources sector, and socio-economic considerations

Next steps and timelines

Full project proposal phase

NRCan will notify the applicants who are invited to the FPP phase and send them information on the FPP timelines and submission requirements.

Applicants must provide all mandatory information to be considered for funding. An invitation to the FPP phase does not represent a funding commitment from NRCan.

NRCan may request supplementary information at various points in the review process.

Due Diligence Assessment

All applicants selected for funding will undergo a due diligence assessment, which will include an evaluation of the project’s finances, technical risk, and team strengths as well as legal and regulatory considerations. NRCan may request additional information to support the due diligence assessment.

Applicants will be notified whether their project passes the due diligence assessment. Applicants whose projects pass the due diligence assessment will be invited to work with NRCan to draft, sign, and execute a contribution agreement.

Contribution Agreement

Any funding under the call will be contingent upon the execution of a contribution agreement. Until a written contribution agreement is signed by both parties, no commitment or obligation exists on the part of NRCan to make a financial contribution to any project, including any expenditure incurred or paid prior to the signing of such contribution agreement.

More information on NRCan contribution agreements will be made available to successful applicants following notification of the proposal results.

Timelines

The following timelines are anticipated for the call. NRCan, at its sole discretion, reserves the right to modify these anticipated timelines.

Steps	Dates
Open for EOI Applications	May 25, 2023
Deadline for EOI Applications	July 20, 2023 11:59 p.m. PT
Notification of EOI Results	Fall 2023
Deadline for FPP Submissions	Winter 2023
Project Selection/Notification	Spring 2024 (TBD)
Due Diligence	Spring 2024 (TBD)
Negotiation and Signing of Contribution Agreements	Spring/Summer 2024 (TBD)

Regulatory, Reporting, and Other Requirements

Inclusion, diversity, equity, and accessibility (IDEA)

NRCan recognizes the importance of a diverse and inclusive workforce for the resilience of Canada’s economy and the benefit of Canadian society. To better understand applicants’ approaches to creating more equitable and inclusive workplaces and policies, NRCan is collecting voluntary information that will be aggregated and anonymous. This information will be used to inform future outreach, program development, and efforts to promote inclusion, equity, diversity and accessibility in the clean energy sector.

As the sections on IDEA are voluntary, responses will not be evaluated or scored as part of the application, but may considered during the selection process at the EOI and FPP stages.

Duty to consult

NRCan has a legal duty to consult with Indigenous groups when a contemplated Crown conduct, such as the provision of funding, may have adverse impacts on existing or potential Aboriginal or Treaty rights. Federal departments and agencies are responsible for understanding how and when an activity could have an adverse impact on Aboriginal or treaty rights, and consultation should occur prior to the federal government taking any action.

While applicants are not required to consult with Indigenous groups under the EIP as part of the application process, they will be required to report at the FPP phase if they have already conducted consultation or engagement activities in relation to the project proposal or as part of their ongoing operations or corporate commitments.

Impact Assessment Act

As per the Impact Assessment Act, NRCan is required to assess whether RD&D projects carried out, in whole or in part, on federal lands are likely to cause significant adverse environmental effects. At the FPP phase, applicants will be asked to identify if the project will be carried out in whole or in part on federal lands. If so, an impact assessment may be required during due diligence for successful applicants.

Outcome reporting

After entering into a contribution agreement with NRCan, proponents of successfully funded projects will be required to report on a quarterly and yearly basis to ensure that targets and objectives are being met.

As some outcomes may only be realized after funding has ended, ongoing data collection and assessment will be required for a period of five years following the project’s completion date.

Information Sharing Permissions

During the application process, applicants will confirm whether they provide permission for NRCan to share their application with other relevant funding organizations. For projects that may not obtain funding under the Program, this will allow the Program to provide the opportunity for maximum exposure and guidance across other federal funding programs or providers.

The Clean Growth Hub

The Clean Growth Hub is a whole-of-government focal point for clean technology focused on supporting companies and projects, coordinating programs and tracking results. The Hub is an interdepartmental organization whose member departments and agencies include:

• Innovation, Science and Economic Development Canada
• Natural Resources Canada
• Environment and Climate Change Canada
• Transport Canada
• Fisheries and Oceans Canada
• Agriculture and Agri-Food Canada
• Global Affairs Canada
• Treasury Board Secretariat of Canada
• National Research Council
• Business Development Bank of Canada
• Export Development Canada
• Sustainable Development Technology Canada

Should you consent, the information you provide may be shared across federal departments/agencies, including but not limited to the departments and agencies represented in the Clean Growth Hub, with a view to assisting you in determining the federal programs/supports best suited to your needs. Pursuant to Paragraph 20(1) of the Access to Information Act, the Clean Growth Hub will not publicly disclose any information without permission.

“Trusted Partners”

To facilitate co-funding with provincial/territorial and industry funders, NRCan is working in collaboration with a network of other funding organizations across Canada. By giving NRCan the authority to share your proposal with our “Trusted Partners” (TP), you allow NRCan to explore possible co-funding opportunities, referrals, or follow-on funding opportunities.

Please note that NRCan will only share these applications with TPs where NRCan has a non-disclosure agreement in place and for the purposes of referring proposals for funding consideration or exploring the possibility of co-funding.

Contact Us

For any questions regarding the call, please contact NRCan at eiptransport-pietransports@nrcan-rncan.gc.ca. During regular operations, NRCan will strive to respond within two business days.

For technical support with the Applicant Portal, please contact oerdportal-portailbrde@nrcan-rncan.gc.ca.

Appendix A. Technology readiness levels

Technology Readiness Level (TRL) is a measure used to assess the maturity of evolving technologies (devices, materials, components, software, work processes, etc.) during its development and in some cases during early operations. Generally speaking, when a new technology is first invented or conceptualized, it is not suitable for immediate application. Instead, new technologies are usually subjected to experimentation, refinement, and increasingly realistic testing. Once the technology is sufficiently proven, it can be incorporated into a system/subsystem.   

TRL	Short Definition	Description	Examples of Activities
1	Basic principles observed and reported.	Lowest level of technology readiness. Scientific research begins to be translated into applied research and development (R&D).	Activities might include paper studies of a technology's basic properties.
2	Technology concept and/or application formulated.	Invention begins. Once basic principles are observed, practical applications can be invented. Applications are speculative, and there may be no proof or detailed analysis to support the assumptions.	Activities are limited to analytic studies.
3	Analytical and experimental critical function and/or characteristic proof of concept.	Active R&D is initiated. This includes analytical studies and laboratory studies to physically validate the analytical predictions of separate elements of the technology.	Activities include components that are not yet integrated or representative.
4	Component(s)/subsystem(s) and/or process validation in a laboratory environment.	Basic technological components are integrated to establish that they will work together.	Activities include integration of "ad hoc" hardware in the laboratory.
5	Semi-integrated component(s)/subsystem(s) and/or process validation in a simulated environment.	The basic technological components are integrated for testing in a simulated environment.	Activities include laboratory integration of components.
6	System and/or process prototype demonstration in a simulated environment.	A model or prototype that represents a near desired configuration.	Activities include testing a model or prototype in a simulated or laboratory environment.
7	Prototype system ready (form, fit, and function) for demonstration in an appropriate operational environment.	Prototype is ready for demonstration in an operational environment and is at planned operational level.	Activities include prototype field testing in a real-world operational setting.
8	Actual technology completed and qualified through tests and demonstrations.	Technology has been proven to work in its final form and under expected conditions.	Activities include developmental testing and evaluation of whether it will meet operational requirements.
9	Actual technology proven through successful deployment in an operational setting.	Actual application of the technology in its final form and under real-life conditions, such as those encountered in operational tests and evaluations.	Activities include using the innovation under operational conditions.

Guiding principles

The following principles should be applied when determining the TRL of a technology:

• Start with the broader Technology Development Stage: When determining a TRL, it is best to start with the general development stage of the technology before assessing the specific TRL.
• Err on the side of conservative: If there are uncertainties as to whether a technology is at a certain TRL, the lower TRL should be assigned.
• Ensure the operating environment is well understood: A key aspect of the various TRLs is the testing environment of a technology. It is important to be clear in understanding the real-world conditions expected and if and how the testing environment (e.g. laboratory, simulated or operational) represents these conditions.
• A TRL is only valid for the specific operational environment for which it was tested: If a developed technology is to be deployed in an operational environment that was different than the one it was tested for, the technology would no longer be considered fully developed and would need to be tested and refined for the new operational environment to be considered at the same TRL.

Important distinction: A technology is said to have achieved a specific TRL if it has met the requirements for that level and all prior levels. A technology is said to be at a certain TRL if the research team is currently working on achieving the requirements specific to that level.

Still not sure what TRL your project is at? Check out the TRL assessment tool to help you narrow it down.

Appendix B. Definitions

class 8 heavy-duty vehicle (class 8 HDV): An on-road vehicle with a gross vehicle weight rating (GVWR) of greater than 14,969 kg (33,000 lbs)

intelligent transportation system: Interactive system for the collection, processing and dissemination of information applied to the field of transportation. The system is based on the integration of information and communication technologies into infrastructures and vehicles to improve the management and operation of transportation networks and associated user services.

light-duty vehicle (LDV): an on-road vehicle with a gross vehicle weight rating (GVWR) of 3,856 kg (8,500 lbs) or less.

medium- and heavy-duty vehicles (MHDVs):  on-road vehicles with a gross vehicle weight rating (GVWR) of greater than 3,856 kg (8,500 lbs), which includes class 2B to class 8 vehicles

northern communities: Communities located north of the limit of isolated permafrost – approximately 50° north latitude

remote communities: Communities that are not currently connected to the North American electrical grid or the piped rural gas network and are a permanent or long-term (five years or more) settlement with at least 10 dwellings

rural communities: Communities that have a population of less than 5,000 people and a population density of less than 400 people per square kilometre and are not connected to the North American piped natural gas network.

Frequently used acronyms

EOI: expression of interest

FPP: full project proposal

HDV(s): heavy-duty vehicle(s)

LDV: light-duty vehicle

MHDV(s): medium- and heavy-duty vehicle(s)

TRL: technology readiness level

Appendix C. Eligible expenditures and Non-permissible costs

Eligible Expenditures

The Program will provide for Eligible Expenditures as described below.

Eligible Expenditures for an approved project under the Program must be directly related to, and necessary for, the implementation and conduct of a project, and will include:

• Salaries and benefits for employees on the proponent’s payroll, for actual time spent by the employees on the project;
• Professional, scientific, technical and contracting services;
• Reasonable travel costs, including meals and accommodation, based on National Joint Council Rates;
• Capital expenditures such as the purchase, installation, testing and commissioning of qualifying equipment, materials and products, including diagnostic and testing tools and instruments and Original Manufacturer equipment warranty (including extended warranties where deemed appropriate to mitigate risk and lack of capacity).;
• Other expenses including:
  • Laboratory and field supplies, and materials;
  • printing services and translation;
  • Data collection services, including processing, analysis and management;
  • Facility costs for seminars, conference room rentals etc.;
  • Licence fees and permits;
  • Capacity building and training; and
  • Field testing services.
  • For indigenous proponents, other expenses may include:
    • Costs associated with an Indigenous ceremony (excluding hospitality); and
    • Honoraria for Elders.
• Overhead expenses, provided they are directly related to the conduct of the project and can be attributed to it. Overhead costs will be negotiated and agreed to on an individual basis with project proponents before signing a contribution agreement. They will not exceed 15% of eligible expenditures.

Ineligible Expenditures

Costs ineligible for reimbursement from the Program (but permitted as part of the proponent’s contribution to the total project costs) will include:

• All costs incurred within the Total Project Cost period but outside the Eligible Expenditure Period are considered as ineligible expenditures.
• Overhead expenses exceeding 15% of Eligible Expenditures, may be included as Ineligible expenditures and count towards the proponent’s portion of the total project costs provided that the sum of overhead expenses (Eligible plus Ineligible) does not exceed 15% of the Total Project Costs.
• The reimbursable portion of Federal and Provincial Taxes
• In-kind costs^{Footnote 5}

From time to time, the Program may determine that some of the proponent’s project costs will not be eligible for reimbursement, but may be included towards the proponent’s contribution to the total project costs. These costs will be considered ineligible expenditures, and will be shown in the Ineligible Expenditures section of the budget. The Program will provide guidance to the proponent as required. In the specific context of this call, below is non-exhaustive list of project costs that may be considered ineligible expenditures by the Program:

• Vehicle purchases and retrofits
• Hydrogen production technologies
• Hydrogen storage technologies
• Grid-side infrastructure investment

Non-permissible Costs

Costs associated with the purchase of land are considered non-permissible, which means that they are ineligible either for reimbursement or for inclusion as part of the total project costs. From time to time, the Program may consider other costs to be non-permissible. The Program will provide guidance to the proponent as required.

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