Federal funding will support development of clean fuels

The federal government has launched a fund to develop clean fuels, along with a call for proposals for projects that increase Canada’s capacity to produce them.

The $1.5-billion Clean Fuels Fund was announced during the World Hydrogen Technologies Convention hosted by the Canadian Hydrogen and Fuel Cell Association and supported by the International Association for Hydrogen Energy. The fund supports the domestic clean fuels market, bolsters the implementation of the Clean Fuels Standard and delivers on early actions outlined in the government’s Hydrogen Strategy for Canada.

The fund supports building new or expanding existing clean fuel production facilities, including hydrogen, renewable diesel, synthetic fuels, renewable natural gas and sustainable aviation fuel. It also supports feasibility and front-end engineering and design studies that will create jobs and enable the sector to grow at the size and pace required to contribute to Canada’s climate goals.

Biomass supply chains

It will also establish biomass supply chains to improve logistics for the collection, supply and distribution of biomass materials, such as forest residues, municipal solid waste and agriculture crop residues, as well as the development of essential codes and standards. These investments benefit farmers, grain handlers, forest harvest operators, saw mills and municipal waste services by opening up new opportunities for both traditional feedstock products, like canola and forest feedstock, as well as new value streams from agriculture, forest and municipal.

The call for proposals for projects to increase domestic clean fuel production capacity is open until September 29, 2021. Natural Resources Canada will provide funding through conditionally repayable contribution agreements of up to 30 percent of the total eligible project costs, to a maximum of $150 million, per project.

The Clean Fuels Fund addresses critical barriers to growth, such as upfront costs, in the domestic clean fuels market and lays the groundwork for the low carbon fuels of the future.