CCUS RD&D Storage and Transportation Focus Area Applicant's Guide

• 1. Introduction
• 2. Call overview
  • 2.1 Background
  • 2.2 Expected outcomes
• 3. Eligible applicants
• 4. Eligible projects
• 5. Eligible activities
  • 5.1 Research & Development and Related Science Activities
  • 5.2 Demonstration
• 6. Funding & support
  • 6.1 Funding
  • 6.2 Stacking limit
• 7. Application process and timelines
  • 7.1 Expression of Interest Phase
  • 7.2 Full Project Proposal Phase
  • 7.3 Due Diligence Assessment
  • 7.4 Contribution Agreement
  • 7.5 Timelines
  • 7.6 Regulatory, Reporting, and Other Requirements
  • 7.7 Information Sharing Permissions
• 8. Contact Information
• Appendix A – Technology Readiness Levels
• Appendix B – Storage and Transportation Focus Area Eligibility and Evaluated Questions
• Appendix C – Frequently Asked Questions (FAQs)

Budget 2021 provided $319 million in funding over seven years for research, development, and demonstration (RD&D) to advance the commercial viability of carbon capture, utilization, and storage (CCUS) technologies.

Delivering on the Budget 2021 commitment, Natural Resources Canada (NRCan) has planned a number of calls to support CCUS RD&D over the next several years. To that end, under the Energy Innovation Program (EIP), NRCan launched the CCUS Front-End Engineering and Design (FEED) studies call and selected projects for funding in April 2022, and launched an RD&D call in July 2022.

The CCUS RD&D call will support a suite of focus areas: Capture (closed for intake), Storage and Transportation (open until April 17, 2023), and Utilization (expected to open in Fall 2023).

2.1 Background

With vast potential storage resources that are estimated to provide hundreds of years’ worth of capacity, Canada is well-placed to lead activities and develop solutions that advance innovation in CO₂ storage. While large-scale storage has been demonstrated at various sites in Canada, such as the Quest, Glacier CCS, and Aquistore injection sites, it is anticipated that 95% of all captured CO₂ will need to be permanently stored to achieve net-zero emissions.

Some of the current key barriers in advancing CCUS projects across Canada are directly linked with CO2 storage and transportation, and related data, technology and regulatory gaps. NRCan recognizes that there is a need to address these gaps to advance the capacity to permanently store CO2 in sites with significant injectivity and pore space, to develop new storage potential in high-emitting regions that do not currently have identified capacity and options or in regions that are not yet well characterized, and to support the CCS regulatory framework.

2.2 Expected Outcomes

The CCUS RD&D Storage and Transportation focus area aims to support the RD&D of CO₂ storage and transportation technologies as well as related scientific activities that advance and enable the characterization and development of safe, cost-effective, and permanent geological storage of CO₂, and the development of technologies that support safe and efficient transportation of CO₂ across Canada. This focus area also expects to support activities that enable planning and development of CO₂ storage and transportation hubs, address technical, scientific, or social license barriers to CO₂ storage and transportation, as well as generate knowledge to support development of regulatory frameworks and codes and standards.

This may be achieved through development of technologies, techniques, standards, specifications, and tools for: CO₂ storage, transportation, site characterization, improved safety, effectiveness, and efficiency in CO₂ transportation and injection, plume detection and other related measurements, monitoring, and verification for permanent CO₂ storage, and leak detection of stored CO₂. It can also be achieved through characterization of potential storage reservoirs, research into the mechanics and behaviour of CO₂ injection and sub-surface storage.

As a part of the EIP, this call aims to support Canada’s net zero and emissions reduction targets through advancing CCUS knowledge and technology development and deployment.

The CCUS RD&D Storage and Transportation focus area is open to:

1. Legal entities validly incorporated or registered in Canada, including:
   1. For-profit and not-for-profit organizations such as electricity and gas utilities, electricity system operators, transmissions owners and operators, companies, industry associations, research associations, and standards organizations
   2. Indigenous organizations and groups
   3. Community groups
   4. Canadian academic institutions
2. Provincial, territorial, regional, and municipal governments and their departments and agencies where applicable

It is expected that the entity that will sign a contribution agreement with NRCan will be the majority owner of any assets purchased in full or in part by funding provided by NRCan.

Eligible projects include:

Technology Development – Research and Development (R&D) or Demonstration (Demo)
R&D or Demo projects focused on the development of technology solutions that serve the following priorities:

1. Understanding and characterization of injectivity and capacity of existing reservoirs
2. Optimization of measurement, monitoring, and verification of transportation infrastructure and injected CO₂, including for leak detection, next-generation seismic risk forecasting, and site-specific risk identification including well integrity, sub-surface CO₂ migration, cap rock integrity, and ground water impacts
3. CO₂ transportation and injection, including CO₂ stream specifications, mitigation of the impact of impurities for reducing corrosion or embrittlement in pipelines, well casings, and other storage related applications to prevent CO₂ leakage from geological storage, and for more efficiently compressing CO₂ for transportation and injection
4. Conversion of existing infrastructure (e.g. wells, pipelines) for CO₂ transport and sequestration

Technology development related projects must be advancing pre-commercial technologies between Technology Readiness Level (TRL) 2 to 7. TRL definitions can be found in Appendix A.

Characterization and Enabling Activities – Related Science Activities (RSA)
RSA focused on:

1. Characterization of new storage opportunities, including development of methods for high resolution characterization from surface or sub-surface (improved characterization of faults and fractures)
2. Identification and quantification studies of potential conventional, unconventional, or non-geological CO₂ storage, including mapping of pore space at a regional level, characterization of pore space, pore space injectivity and cap rock integrity, and identification of potential storage hubs
3. Development of conventional or unconventional storage opportunities, including saline aquifers, olivine-rich rocks or basalt, shallow storage, and other novel storage opportunities
4. Research on subsurface geomechanics, geochemistry, or dynamics within geologic formations to understand subsurface CO₂ temporal behaviour, interactions, and CO₂ mineralization; to maximize reservoir capacity; and to increase confidence in plume immobilization and dynamic pressure limits
5. Research on applications and viability of marine, rail, or pipeline transport in select scenarios
6. Applications of novel computational techniques to subsurface modelling for reservoir management, real-time decision making (AI-ML) to reduce the cost and time requirement for reservoir characterization, streamline site selection process, and improve seismic modelling

Preferred projects are those that:

1. Enable permanent storage of CO₂ (storage hubs/reservoir development) near key industrial areas that do not have storage capacity available
2. Explore storage opportunities in regions that are not yet well characterized
3. Enable planning of CO₂ transportation and storage hubs
4. Support knowledge generation that informs and/or directly supports development of regulatory frameworks and codes and standards

Ineligible projects are those that:

1. Are substantially for the installation of CO₂ transportation pipelines and are lacking a clear innovation component
2. Advance exploration, mapping, or characterization of oil, gas, and/or other resources such as minerals or metals that are not specifically related to permanent storage of CO₂
3. Advance characterization or development of technology/techniques that advance non-permanent storage
4. Enhanced Oil Recovery (EOR)
5. Replicate operating commercial CCUS facilities

The CCUS RD&D Storage and Transportation focus area is open to R&D, Demo, and RSA projects that undertake the following eligible activities.

5.1 Research & Development and Related Science Activities

1. Development, assessment, data gathering, testing and integration of novel and innovative equipment, software and methodologies, for example:
   1. Proof of concept of technologies where there is a significant technical risk, including field trials, bench-scale testing, pilot plants, and prototypes
   2. Analytical tools and modelling software
2. Pre-demonstration field testing – limited duration tests designed to develop the knowledge and understanding the sub-surface reservoir, saline aquafer, depleted reservoir that will support the development of a storage site/hub, support regulatory knowledge gaps and development of monitoring and verification technologies and methodologies
3. Capacity building and training (where applicable)
4. Assessments or reservoir characterization studies, including data compilations and syntheses, for the development of models for subsurface behaviour of CO₂ during operation and post closure

5.2 Demonstration

1. The permanent (for the normal life of the equipment) installation of a pre-commercial technology with the intent that it continues to operate in its intended operational environment
2. Permanent modification of existing processes, equipment, or systems to accommodate an innovative technology or process
3. The permanent installation of equipment and/or infrastructure to support a demonstration or multiple demonstrations
4. Associated costs for the engineering, design and permitting of a permanent installation as identified above, including engineering and design costs if supported or 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
6. Demonstration of CO₂ injection and injectability studies in support of storage site/hub development, pre-feasibility activities, well conversion and integrity

6.1 Funding

The CCUS RD&D Storage and Transportation focus area is open to R&D projects and RSA (comprising up to 75% of total project costs) and Demo projects (comprising up to 50% of total project costs), over a period of up to four years. The EIP provides non-repayable contributions for both types of projects.

For more details on funding and eligible expenditures, contact the program at eip-ccus.pie-cusc@nrcan-rncan.gc.ca.

Eligible project expenditures can begin once the applicant has been notified in writing by NRCan that they have been selected for funding under the EIP.

6.2 Stacking Limit

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

Collaboration and leveraging are strongly encouraged for all program components, and these will be included among the selection criteria.

Stacking of funding (i.e. total government support for a project) will be supported to a maximum of 100% of eligible expenditures. Preference will be given to projects that leverage funding from non-government sources.

The CCUS RD&D Storage and Transportation focus area has two phases.

7.1 Expression of Interest Phase

To apply to the CCUS RD&D Storage and Transportation focus area, applicants must complete and submit their expression of interest (EOI) application via email to NRCan (EIP-CCUS.PIE-CUSC@nrcan-rncan.gc.ca) by 11:59pm ET on April 17, 2023. The EOI application template (fillable PDF format) can be downloaded from NRCan’s website. The eligibility criteria and the evaluated EOI questions are included in Appendix B.

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

7.2 Full Project Proposal Phase

Applicants that are invited to the full project proposal (FPP) phase will be notified by NRCan, and will receive information on the FPP submission requirements and the timelines.

Applicants must provide all mandatory information in order to be considered for funding. Being invited to the FPP phase does not represent a funding commitment from NRCan.

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

7.3 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 risk as well as legal and regulatory considerations. NRCan may request additional information to support the due diligence evaluation.

Applicants undergoing due diligence 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.

7.4 Contribution Agreement

Any funding under this CCUS RD&D Storage and Transportation focus area 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 the proposal results notification.

7.5 Timelines

The following timelines are anticipated for the CCUS RD&D Storage and Transportation focus area. NRCan, at its sole discretion, reserves the right to modify these anticipated timelines.

7.6 Regulatory, Reporting, and Other Requirements

7.6.1 Equity, Diversity, and Inclusion

NRCan recognizes the importance of a diverse and inclusive workforce to the resilience of Canada’s economy and to the benefit of Canadian society. To support a diverse and inclusive energy technology sector, applicants will be required as part of their EOI application to indicate whether their organization has an Equity, Diversity and Inclusion (EDI) Plan and, if so, what this plan entails. Applicants will also be asked if their organization has made a public commitment to EDI.

While this information will not evaluated, it may inform NRCan’s efforts to select a balanced portfolio of projects across the country along with other considerations such as geographic representation. This information may also be used by NRCan to track progress on increasing workforce diversity and to inform future program and policy development. Successful applicants will be asked to continue reporting on progress towards EDI in their organization through annual reporting during and after project funding is complete.

7.6.2 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’ consultation with Indigenous groups is not required 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 the applicant’s ongoing operations or corporate commitments.

7.6.3 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.

7.6.4 Outcome Reporting

After entering into a contribution agreement with NRCan, 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.

7.7 Information Sharing

During the application process, applicants will be asked 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.

7.7.1 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 with member departments and agencies including: 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; the Treasury Board Secretariat of Canada; the National Research Council; Business Development Bank of Canada; Export Development Canada; Sustainable Development Technology Canada; and Canadian Commercial Corporation.

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.

7.7.2 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.

For more information and a list of the Program’s current Trusted Partners, please refer to the Innovation and Clean Growth Programs Terms and Conditions.

For any questions regarding the CCUS RD&D Storage and Transportation focus area or the CCUS RD&D call more broadly, please contact NRCan at: EIP-CCUS.PIE-CUSC@nrcan-rncan.gc.ca. During regular operations, NRCan will strive to respond within two business days.

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.

The lowest level, TRL 1, indicates that information already learned from basic scientific research is taking its first step from an idea to a practical application of a lesson learned. For example, after learning that hydrogen and oxygen can be combined to generate electricity, some would suggest an idea for building a machine to do just that.

A technology that has achieved TRL 9 is one that has been incorporated fully into a larger system. It has been proven to work smoothly and is considered operational. An example of an operational TRL 9 technology is the fuel cells which combine hydrogen and oxygen to generate electricity for NASA’s space shuttle.

1. R&D not specifically intended for technology development (but could be in support of technology adoption). Examples are knowledge generation to support codes, regulations and standards needed to support domestic adoption and to support Canada’s position in opposing non-tariff export barriers. Also includes basic research conducted prior to applied research.
2. Early-stage scientific research begins the translation to applied R&D at the lowest level of technology readiness. Basic scientific research begins to be translated into preparatory applied research and development. Examples include paper studies of a technology’s basic properties, algorithms, and mathematical formulations.
3. Technology development begins. Once basic principles are observed, development of practical and specific applications can be initiated. Applications are speculative and there may be no proof or detailed analysis to support the assumptions. Examples are limited to analytic studies, including concept development.
4. Active R&D is initiated. Active research and development are initiated to establish proof of concept, including analytical and laboratory studies to physically validate analytical predictions of separate elements of the technology, i.e. individual components that are not yet integrated into the technology.
5. Basic technological components are integrated to establish that the pieces will work together, i.e. initial operational characterization of technology. Standalone component prototypes are implemented and tested.
6. System/subsystem prototypes are improved significantly. The basic technological components/prototypes are integrated within a reasonably realistic supporting environment so that the technology concept can be tested in a simulated environment. Examples include bench-scale laboratory integration of components and observation of operating characteristics.
7. Model/prototype is tested in a relevant environment. A representative model or prototype system, which is well beyond that of TRL 5, is tested in a relevant test environment. This represents a major step up in a technology’s demonstrated readiness. Examples include testing a prototype at the pilot scale, integrated with existing systems, if applicable, in a laboratory environment or in a simulated operational environment. Engineering feasibility is demonstrated.
8. Prototype near or at planned operational system. This represents a major step up from TRL 6, requiring demonstration of an actual system prototype in the intended operational environment. Examples include field-testing or field trials over a period sufficient to provide meaningful data on the performance of the technology.
9. Technology is proven to work in a “real world” operating environment. Actual technology is completed and qualified through tests and demonstrations. This includes projects currently at the demonstration project stage.
10. System proven through successful demonstration. Actual application of technology is in its final form: commercialization-ready technology proven through successful operations.

EOI ELIGIBILITY

EVALUATED EOI QUESTIONS

Application Process

1. Whom should applicants contact if there are any difficulties applying?

If you encounter any problems applying, please contact NRCan by email (EIP-CCUS.PIE-CUSC@nrcan-rncan.gc.ca).

2. Can an applicant request a meeting with NRCan to discuss specific questions about their application?

In the interest of fairness, the program is not accepting meetings with applicants while the competitive process is open/underway. Please send your questions by email to the program mailbox (EIP-CCUS.PIE-CUSC@nrcan-rncan.gc.ca).

3. Can applicants submit more than one application?

Applicants can submit more than one application, provided that each application is for a distinct project with distinct and different core objectives.

4. Can applicants apply to both R&D and Demo project streams?

Applicants are required to select either the R&D or Demo project stream for each application and are required to clearly describe where their project resides in terms of stage of development based on the core objectives of the project. For multi-phase projects (e.g. projects that have both R&D and Demo aspects), applicants may submit one application under the Demo project stream that includes the various phases. In this case the application should clearly describe the sequencing of the work and the risks associated with incremental steps not proceeding as planned (along with appropriate mitigation measures/contingency plans), as this will be a part of the evaluation.

5. Can projects involve the following organizations?

Federal research labs: Yes, but costs for services from government organizations (e.g. testing services from CANMET or National Research Council labs) are ineligible. These costs can be included in your budget as ineligible expenditures, and counted towards total project cost.
International/foreign organizations: Yes, but the lead applicant must be legally registered in Canada.

Consortiums: Yes, but the group needs to identify an organization to be the lead applicant and include the rest of the consortium members within the application as project partners.

6. What information should be included in the Team and Partners section of the application?

Due to the limited space provided in this section, only list the key project team and partners.

7. What should be included in Letters of Support?

Letters of support should include a written commitment of financial, technical, or other support from project partners.

8. Is there a specific way to calculate the projected greenhouse gas (GHG) emissions reductions?

Due to the wide range of anticipated potential projects for this call, applicants are invited to use methodologies that are most appropriate for their project to calculate the projected GHG emissions reductions. Applicants are required to clearly state and support their assumptions and will be evaluated on the coherence and robustness of their methodologies and assumptions. Applicants who are invited to the Full Project Proposal stage will be expected to provide more detailed information on projected GHG emissions reductions, using a template provided by NRCan.

9. What type of public information sharing is required from a successful applicant?

Successful applicants will not be asked to share any confidential or proprietary information. However, successful applicants that are selected for funding will be required to submit a public report, generally consisting of a description of the project, a scope of work, and project results. Furthermore, plans to support knowledge dissemination throughout and after the proposed project may be considered favourably in the evaluation of proposals.

Eligibility

10. Can a research proposal that overlaps two or more of the focus areas (e.g., Capture, Storage & Transportation, Utilization) still apply for this focus area?

A project or research proposal that overlaps two or more of the focus areas may apply for this focus area, however only components of the project/research proposal that are directly related to the focus area will be eligible for funding.

11. Are projects currently underway eligible? And will project funding include expenditures between now and the successful signing of a Contribution Agreement?

Yes, projects that are currently underway are eligible. However, both eligible and ineligible expenditures   can only begin after notification of selection for funding after the Full Project Proposal (FPP) phase, marking the beginning of the Due Diligence (DD) phase. This marks the beginning of the “retroactivity period.” Upon successful completion of DD, both parties sign a contribution agreement, which marks the end of the “retroactivity period.” Proponents can claim up to 30% of NRCan’s contribution within the retroactive period. Please note that NRCan can only reimburse expenses starting in the same fiscal year that the Contribution Agreement (CA) is signed (NRCan’s fiscal year ends March 31st).  For example, if the CA was not signed before fiscal year end, a new retroactivity period would begin and the previous fiscal year expenses can no longer be claimed. 

12. Can an organization that is the Canadian subsidiary of an internationally based company apply?

Yes provided that the organization is legally registered in Canada and the project takes place in Canada.

13. Can a consortium have multiple project leads?

Applicants are required to select one organization as the project lead. Please describe the other members of the consortium in the Teams and Partners section of the Expression of Interest (EOI) form.

14. What are the eligibility requirements around intellectual property (IP)?

There are no up-front eligibility requirements for IP, though proponents should be able to demonstrate their ownership or licensed access to existing IP used in the project where applicable. Information provided on the development and treatment of new IP will be evaluated in line with the innovativeness of the project. Further, that any IP created over the course of the project is required to be vested in, or licensed to the proponent.

15. Do projects involving the storage of sequestered CO2 as solid carbon, biochar, or mineralized CO2 qualify under this program?

The scope of this focus area primarily includes storage of gaseous or supercritical CO2. Biochar and most other solid forms of CO2 sequestration are ineligible. However, if a project is focused on the mineralization of captured CO2 and provided the minerals are not intended to be used further, the storage of CO2 in mineral form would be considered eligible.

16. Are there any minimum requirements for storage capacity?

There is no minimum storage capacity requirement, but the greater the storage capacity the more competitive your project will be.

17. Is there a preference for Storage or Transportation projects?

There is no preference, both Storage and Transportation projects will be evaluated in the same way according to the criteria and questions out lined in the Applicants Guide and EOI form.   

Funding

18. Does my organization need to contribute funds to the project?

Applicants can request up to 75% of total project costs for Research and Development (R&D) and Related Science Activities (RSA) projects and 50% for Demonstration (Demo) projects from NRCan. Applicants will need other sources of funding to cover the remainder of the total project cost. Collaboration and leveraging are strongly encouraged for all program components, and these will be included among the selection criteria. Preference may be given to projects that leverage funding from non-government sources.

19. What are the stacking limits to funding?

Stacking of funding (total government support for a project) will be supported to a maximum of 100% of eligible expenditures. However, applicants will need to verify any stacking limits on other funding programs to which they may have also applied.  

20. What are considered eligible and ineligible expenditures?

Section 3.5.5 of the Innovation and Clean Growth RD&D Programs Terms and Conditions outlines eligible and ineligible expenditures.

21. Does the program credit the proponent or reimburse after the fact?

Our contribution agreements are based on a reimbursement model: the proponent will spend the money up front and is reimbursed on an ongoing basis.