Energy Innovation Program, Clean Fuels and Industrial Fuel Switching

• 1. Introduction and call overview
  • 1.1 Call overview
• 2. Objectives
• 3. Eligible projects
• 4. Funding & support
• 5. Eligible applicants
• 6. Application timeline and process
  • 6.1 Application Process
  • 6.2 Application Timelines
  • 6.3 EOI Preparation
  • 6.4 Full Project Proposal
  • 6.5 Due Diligence Assessment
  • 6.6 Contribution Agreement
  • 6.7 Reporting Requirements
  • 6.8 Equity, Diversity, and Inclusion (EDI)
  • 6.9 Duty to Consult
  • 6.10 Impact Assessment Act
• 7. Information sharing permissions
  • 7.1 The Clean Growth Hub
  • 7.2 Trusted Partners
• Appendix A - Integro user guide
• Appendix B – Definitions
• Appendix C – Expression of Interest Form Guide

The Energy Innovation Program (EIP) advances clean energy technologies that will help Canada meet its climate change targets, while supporting the transition to a low-carbon economy. It funds research, development, and demonstration (RD&D) projects, and other related scientific activities (RSAs).

Managed by the Office of Energy Research and Development (OERD), EIP has an annual grants and contributions budget of approximately $24M per year to run targeted calls and other strategic collaborations and investment programs.

This call will provide the following funding amounts:

• A total of up to $50M over five years for industrial fuel switching and pre-commercial production of clean fuels.
• A total of up to $3M over five years for projects that support the development and upgrade of hydrogen codes and standards.

Future funding calls will be announced on the OERD Energy Innovation Program web page.

1.1 Call Overview

In its Net Zero by 2050 report released May 2021^{Footnote 1}, the International Energy Agency (IEA) states that almost 50% of CO2 emissions reductions required to create a net zero economy by 2050 will come from technologies currently at the prototype or demonstration stage, with this share being much higher for heavy industry. In Canada, heavy industry accounted for 77 megatonnes (Mt) CO2 eq. in 2019, representing 11% of Canada’s total emissions^{Footnote 2}. Funding solutions to reduce emissions in this sector will be critical to address hard-to-abate segments of industrial emissions and create pathways for the use of cleaner fuels.

As part of OERD’s efforts to accelerate the development of technologies that can decarbonize industry, this funding call targets three focus areas:

Focus Area 1: Industrial Fuel Switching

Canada’s industrial sector is a major driver of economic activity, including income, jobs and exports. It is also a significant source of emissions, including both industrial process and energy consumption-related emissions. Developing lower emissions pathways for industry through substitution with lower carbon fuels, including electricity, hydrogen, biomass, biofuels, and gaseous fuels (only when substituting for a more emissions-intensive fuel), is required to support Canada’s commitment to a low-carbon economy. RD&D continues to be needed to develop new technology, lower capital costs, and improve performance of solutions already nearing commercial scale.

Focus Area 2: Clean Fuels Production

The second focus area for this call targets the production of clean gaseous and liquid fuels, specifically, hydrogen, advanced biofuels, liquid synthetic fuels, and renewable natural gas, as these fuel types are the most widely used across a variety of sectors in Canada. The production of clean fuels presents an opportunity to decarbonize the sectors and sources of emissions that are more challenging and less cost-effective to electrify (e.g., aviation, trucking, marine transport, cement, smelting and refining, and other heavy industry).

Challenges to the widespread adoption of clean fuels include the need to shift away from conventional bioenergy crops, reduce costs of production, harness underutilized or waste feedstock, and increase the ease of adoption of lower carbon replacements to conventional fuels. Targeted RD&D is required to address these challenges.

Focus Area 3: Hydrogen Codes and Standards

Development of an at-scale, clean hydrogen economy is a strategic priority for Canada, needed to diversify our future energy mix, generate economic benefits, and achieve net zero greenhouse gas emissions by 2050. Canada already has many of the necessary components to develop a competitive and sustainable hydrogen economy.

This focus area will support the necessary development of codes and standards that accelerate the advancement and deployment of hydrogen applications. Support for the development of codes and standards is found in The Hydrogen Strategy developed by Natural Resources Canada (NRCan). Gaps in existing codes and standards need to be addressed to enable greater adoption of hydrogen and hydrogen technologies.

Focus areas 1 and 2 will support technologies starting at Technology Readiness Level (TRL) 4 to 8. Focus area 3 will support projects starting at all TRLs. Commercial-scale and/or advanced projects with starting TRL 9 and beyond are excluded from this funding call.

Focus Area 1: Industrial Fuel Switching

This focus area supports projects that have the potential to significantly reduce emissions from industrial processes. This call seeks proposals for projects that enable the substitution of lower carbon fuels or feedstock (including electricity, hydrogen, biomass, biofuels, and gaseous fuels) in the following industrial sectors: chemicals and fertilizers, iron and steel, smelting and refining, and cement.

Completed projects are expected to achieve the following broad objectives:

• Understand properties of lower carbon fuels and their potential impact on existing industrial processes and systems.
• Advance innovative technologies or processes that enable the future uptake of lower carbon fuels, including retrofit or redesign required to adapt to the substitute fuels.
• Utilize lower carbon fuels or feedstock in existing industrial processes to reduce energy intensity and greenhouse gas (GHG) emissions.

Focus Area 2: Clean Fuels Production

This focus area supports projects for the pre-commercial development, advancement, and piloting of technologies that reduce the capital and operating costs of producing clean fuels.

Completed projects are expected to achieve the following broad objectives:

• Develop novel clean fuels production processes.
• Improve the process and efficiency of clean fuel production using advanced feedstock.
• Advance the usability of waste or underutilized feedstock.

Focus Area 3: Hydrogen Codes and Standards

Completed projects are expected to achieve the following broad objectives:

• Advance knowledge towards the update, harmonization, and/or development of codes and standards for the production, transportation, storage, and utilization of hydrogen.

• Focus areas 1 and 2 will support technologies starting at Technology Readiness Level (TRL) 4 to 8.
• Focus area 3 will support projects starting at all TRLs.
• Commercial-scale and/or advanced projects with starting TRL 9 and beyond are excluded from this funding call.

Focus Area 1: Industrial Fuel Switching

This focus area seeks proposals for projects that enable the substitution of lower carbon fuels or feedstock (including electricity, hydrogen, biomass, biofuels, and gaseous fuels) in the following industrial sectors: chemicals and fertilizers, iron and steel, smelting and refining, and cement.

Specifically, we are seeking proposals related to the following areas for Industrial Fuel Switching:

• Retrofit or redesign of equipment to facilitate the utilization of lower carbon fuels in industrial end uses.
• Development of materials to enable effective substitution to lower carbon fuels.
• Preparation of feedstock or use of waste streams in industrial processes that would result in lower emissions and energy intensity.
• Development of technologies to scale up fuel or feedstock substitution and to integrate into industrial processes.

Applicants to Industrial Fuel Switching are required to provide proof of support from an industrial partner, demonstrating an in-kind or financial contribution to your project. In the event that the industrial partner is the lead applicant, please highlight this in your application.

Preference will be given to:

• Projects with potential for significant energy and emission reductions.

Projects that are ineligible for funding:

• Natural gas use when not displacing a more carbon-intensive fuel or feedstock.
• Auxiliary equipment used in industrial facilities, including heavy-duty vehicles, pumps, motors, combined heat and power, heating and ventilation of buildings, etc.
• Projects that generate electricity on-site and use it to support their own activities or for sale.
• Carbon capture utilization and storage. CCUS innovation is being addressed under another stream of the Energy Innovation Program. (Please visit the Energy Innovation Program webpage to learn more about CCUS-specific funding).

Focus Area 2: Clean Fuels Production

This focus area seeks proposals for projects that advance the pre-commercial production of clean fuels, specifically:

• Clean liquid and gaseous fuels including cellulosic ethanol, renewable diesel, sustainable aviation fuel, synthetic fuel, low-carbon methanol, bio-crude/bio-oil, renewable natural gas, low-carbon hydrogen, and hydrogen-based fuels such as ammonia.
• Clean fuels that improve upon the following benchmarks:
• Carbon intensity of eligible liquid clean fuels must be equal to or below 50 gCO2e/MJ.
• Carbon intensity of eligible gaseous clean fuels must be equal to or below 36 gCO2e/MJ.
• Specific to bio-based fuels, the technology must advance the usability of waste feedstock, including plastics, food waste, industrial waste, livestock operations, forestry, agriculture, and other organic waste sources. The technology can also include the densification of feedstock used to produce clean fuels.

Preference will be given to projects that:

• Integrate or partner with an end user, such as an industrial facility or fuel supplier.
• Produce fuels for use in hard-to-electrify sectors, such as chemicals and fertilizers, cement, steel, medium- and heavy-duty vehicles, aviation, and marine shipping.

Projects that are ineligible for funding, projects that:

• Produce first generation biofuels (e.g., ethanol, biodiesel).
• Use food-based feedstock or feedstock that requires arable land. Food waste is acceptable.
• Focus on hydrogen transportation and storage.

Focus Area 3: Hydrogen Codes and Standards

This focus area seeks proposals for projects that advance knowledge towards the development of codes and standards related to the production, transportation, storage, and utilization of hydrogen.

Examples of codes and standards for hydrogen include:

• Blending hydrogen with natural gas in pipeline networks.
• Co-firing natural gas and hydrogen in power plants.
• Adoption of blending quotas or low-emissions fuel standards.
• Life cycle analysis of hydrogen production pathways.
• End use of hydrogen in industry (e.g., underground mining).
• End use of hydrogen in transportation (e.g., heavy duty trucking).

The Energy Innovation Program provides non-repayable contributions for eligible project activities.

For more details on funding and eligible expenditures, contact the program at energyinnovation-innovationenergetique@nrcan-rncan.gc.ca.

This call may contribute up to 75% of total costs for R&D projects and up to 50% for demonstration projects. It is expected that good quality projects under focus areas 1 and 2 will request between $500,000 and $4,000,000.

Stacking of funding (i.e. total government support for a project) will be supported to a maximum of 75% for R&D projects and 50% for demonstration projects. Preference will be given to projects that leverage funding from non-government sources.

Eligible project expenditures can begin once the Applicant has been notified via email that they have been selected for funding under the Program.

Eligible applicants include:

1) Legal entities validly incorporated or registered in Canada, including:

• 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
• Indigenous organizations and groups
• community groups and
• Canadian academic institutions

2) Provincial, territorial, regional and municipal governments and their departments and agencies where applicable.

It is expected that proponents (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.

6.1 Application Process

NRCan is committed to a consistent, fair, and transparent project selection process to identify, select, and approve the allocation of funding to projects that best fit the Program’s objectives.

Phase 1: Expression of Interest

For Phase 1, Expression of Interest (EOI) submission, applicants can find all information necessary to prepare their EOIs in this guide. The Program will be open for EOI submissions between December 1, 2021 at 11:59 pm Pacific Time and February 2nd, 2022 at 11:59 pm Pacific Time. Applicants may contact the Program should they need further clarity on the process or on expectations: energyinnovation-innovationenergetique@nrcan-rncan.gc.ca.

Assessment of EOIs will be based on criteria provided in section 3, with only the most promising projects moving on to Phase 2: Full Project Proposal (FPP). The Program may request supplementary information at various points in the review process.

An Applicant may withdraw their EOI at any time during the evaluation process by notifying the Program in writing via email. Applicants must submit an EOI to be eligible for FPP.

Phase 2: Full Project Proposal

Applicants that are invited to Phase 2 will receive notification of the required templates and information to be completed. The Applicant must provide all mandatory information in order to be considered for funding. Please note that a request for a Full Project Proposal will not represent a funding commitment from the Program.

6.2 Application Timelines

The following timelines are anticipated for this call. Note that NRCan, at its sole discretion, reserves the right to modify the currently anticipated timelines. Changes will be communicated to applicants via the email address provided in the Applicant Profile during the EOI online application process.

6.3 EOI Preparation

When preparing an EOI, applicants will need to provide the following information:

• Applicant Information: primary contacts, mailing address, organization information.
• Project Information: focus area, sub-focus area, project type, project details, letter of support, project timeline(s).
• Budget and Partners: total program amount requested, anticipated financial and non-financial contributions, federal research centre support (if applicable).
• Project Pitch: contribution of the project to net zero by 2050; how the project addresses a gap in the energy system; pathway to scale or commercialization of the project; experience and roles of project team; intellectual property (IP) strategy; expected environmental, economic, and social impacts; equity, diversity, and inclusion considerations.

EOIs will be evaluated based on the following:

• The alignment of the project with the stated objectives, rationale, and scope of the technical area outlined in Sections 2 and 3 of this Guide.
• The feasibility of the project, including evaluating the funding, proposed methodology, and team required to deliver the project.
• The environmental (e.g., GHG emissions reductions) and socio-economic impacts and benefits that are expected to result from successful completion of the proposed project.

6.4 Full Project Proposal

Only those applicants who are successful in the EOI phase will be invited to submit a Full Project Proposal. The Program team will follow up with these applicants to provide guidance and instructions on completing the next steps, as well as provide any templates or documentation required.

NRCan reserves the right to apply the following additional criteria during EOI review and final project selection:

• Projects that support departmental priorities such as regional balance, advancing equity, diversity and inclusion in the natural resources sector, and socio-economic considerations including economic recovery from COVID-19.

6.5 Due Diligence Assessment

All successful applicants passing the FPP phase will undergo a due diligence assessment, which will include an evaluation of the project’s finances, technical risk, team risk, as well as legal and regulatory considerations. NRCan may request that the Applicant provide additional information to support the due diligence evaluation. All 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 the Program to draft, sign, and execute a Contribution Agreement.

6.6 Contribution Agreement

After receiving the notice of funding approval, applicants will need to enter into a Contribution Agreement with NRCan. If a Contribution Agreement cannot be finalized within a reasonable timeframe, funding may be reallocated to other projects. For more information on Contribution Agreements, please see the Innovation and Clean Growth Programs Terms and Conditions.

6.7 Reporting Requirements

After entering into a Contribution Agreement with the Program, successfully funded projects will be required to report on a quarterly and yearly basis to ensure that targets and objectives are being met. Refer to Section 3.6 of the Program Terms and Conditions for more information. 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.

6.8 Equity, Diversity, and Inclusion (EDI)

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 to this call under the Program will be required 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.

The information you provide may 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.

6.9 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.

Eligible recipients’ consultation with Indigenous groups is not required under the Program as part of the application process. During the FPP phase, applicants will be required to report 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.

6.10 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 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.

7.1 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 Clean Growth 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 or 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.

7.2 Trusted Partners

To facilitate co-funding with provincial/territorial and industry funders, NRCan is working in collaboration with other funding organizations across Canada. By giving NRCan the authority to share your proposal with our Trusted Partners (TPs), you allow NRCan to explore possible co-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 Programs’ current Trusted Partners, please contact the program at energyinnovation-innovationenergetique@nrcan-rncan.gc.ca.

This appendix describes the steps to accessing Integro via NRCan’s eServices portal and submitting an EOI application under the Energy Innovation Program.

You can access Integro from NRCan’s eServices Portal at https://eservices.nrcan-rncan.gc.ca.

If you don’t have a GCKey you will have to register for one or use the Sign-in Partner option.

To create a GCKey for your organization

• On the Welcome Page, click “Continue”

DO NOT misplace your GCKey username/password as it cannot be easily recovered!

Once signed in using your GCKey, you will see the following screen.

Click ‘Continue’ to proceed to the NRCan eServices Portal.

From NRCan eServices, select Integro from the Register for Integro

• If you already have an account click “Select” Integro
• If you don’t have an account, please register for Integro

The options are as follows:

After signing in to Integro, you will see the following page:

1. Welcome
2. Client Profile
3. My Submissions
4. Service Request
5. User Information
6. Help
7. Logout

Return to the Integro Welcome page.
Create a new client profile, or edit an existing profile.
Start a new submission, or view an existing submission.
Request an amendment or report a technical problem.
Update your user information (i.e. email address).
View help topics related to Integro.
Log out of Integro.

If you have an Integro Client Profile from a previous application to an NRCan program, you can use that profile for your application to the EIP Program.

If you do not have an Integro Client Profile, select the Client Profile tab to create one. You MUST have a Client Profile to submit an EOI under the Energy Innovation Program.

To create a profile, select ‘Client Profile’ and click the ‘Register New Client’ button.

Complete the sections of the form. Note that items marked with a red star are mandatory inputs, while the other inputs are optional and may not apply to your organisation (i.e. NAICS code). If you are unable to move between pages or submit your Profile, it most likely means you are missing one or more mandatory inputs.

The primary contact should be the lead individual responsible for the EOI application.

The Legal Name of Applicant refers to your organisation’s legal name, which may be different from its operating name.

Once all required information has been entered, click the ‘Create Account’ button to create your Client Profile. You will receive an automatic notification email once your Client Profile has been created.

Creating an EOI Application

Within Integro, select the “My Submissions” tab to go to the list of NRCan programs, and click the Folder icon in the Energy Innovation Program.

Ensure you have selected the correct program by verifying that Energy Innovation Program is listed as the Current Program. From this page, you can click the New Submission button to begin your EOI Application. If you have an Application completed or in progress, it will appear in the list. The icons under ‘Actions’ allow you to edit or delete your Application.

Ensure you “Save” your work by clicking the “Save” or “Next” button. You can save a section and go back to the Application at a later date to complete it. Note that you must complete all required elements on a page to save it.

Please ensure to attach any applicable documents where indicated.

The Application must be fully complete before you can submit it. You will receive an automatic email notification when you have successfully submitted your Application.

You must complete and submit the form by the due date specified in the Applicant’s Guide.

Should you need to make changes after the Application is submitted, but before the submission deadline, you will have to request an Amendment from the Energy Innovation Program via email. If granted, the Application will be released back to you for amendment.

For a list of definitions, please refer to Section 5 of the Innovation and Clean Growth Programs Terms and Conditions.

Below is additional guidance for some of the questions in the Expression of Interest Form in Integro.

Project Information

Primary location: Tools such as Google Maps can be used to find latitude and longitude coordinates. In Google Maps, right-click on a location to see its latitude and longitude, then click on the latitude/longitude to copy to clipboard.

Focus area: For this question, please indicate which of the three focus areas you are applying to under this call.

Sub-focus area: For this question, please indicate the best option to define your project.

Project details: Under Focus areas 1 and 2, only projects with starting TRL 4 to 8 are eligible for funding. Under Focus area 3, projects starting at all TRLs (1-9) are eligible for funding.

Project Pitch

To complete Question E, “How does this project contribute to the path to net-zero by 2050?” you may refer to the following resources:

• The Pan-Canadian Framework on Clean Growth and Climate Change
• A Healthy Environment and a Healthy Economy
• Clean Fuel Standard