Canada’s Clean Fuel Standard: Reducing Fuel Emissions by Supporting Cleantech Innovation
Fuel powers the Canadian economy. On the daily, thousands upon thousands of people and businesses use fuel to produce and transport all types of essential and non-essential goods so that Canadians may continue to experience a better quality of life. There is no doubt that fuel is a critical resource attributing to a higher standard of living, but the extraction and combustion of current fuels also represent a detrimental source of pollution across Canada.
As the world seeks to reach net-zero emissions by 2050, a major change must rise towards lowering carbon and non-emitting fuels. By introducing the Clean Fuel Standard (CFS), Canada hopes to drive growth in the country’s clean fuel sector by providing funding incentives for the development and adoption of clean fuel technologies and processes.
“Clean fuel standards are a proven approach to addressing the transportation sector’s rising emissions. Canada has a wealth of sustainable, renewable energy sources and paired with our clean technology innovators, holds the opportunity to realize significant economic benefits from expanding our advanced biofuels sector.”
– Advanced Biofuels Canada
The Clean Fuel Standard and the Clean Fuels Fund
Administered through a $1.5 billion investment to the Clean Fuels Fund to achieve CFS goals, the Government of Canada is providing funding support for the research and development of cleaner fuel solutions that will aim to reduce fuel emissions pollution in Canada by 2030.
The Clean Fuels Fund will provide:
- $1.38B to support the build-out of new or expansion of existing clean fuel production capacity;
- $30.4M to support the establishment of biomass supply chains; and
- $19.4M to support the development of critical codes, standards, and regulations.
The CFS will require liquid fuel (gasoline, diesel, home heating oil) suppliers to progressively reduce the carbon intensity of the fuels they produce and sell for use, leading to a decrease of approximately 13% (below 2016 levels) in the carbon intensity of liquid fuels used in Canada.
“The Clean Fuel Standard drives progress towards better air quality and sustainable choices that support rural communities by setting the achievable goals of reducing more than 20 million tons of greenhouse gas emissions annually which in turn will incentivize viable and cost-effective solutions such as 15 percent ethanol in all gasoline by 2030.”
– Emily Skor, CEO of Growth Energy
By promoting research and investments in low carbon fuels and technologies, the Clean Fuels Fund with the CFS aims to:
- Create strong cleantech jobs in sectors such as biofuels and hydrogen;
- Grow Canada’s clean fuels industry to keep up with the global market;
- Create opportunities for companies producing renewable fuels and the farmers and foresters supplying their feedstock; and
- Promote the accelerated use of zero-emission vehicles.
Funding Snapshot: Clean Fuels Fund
Through the Clean Fuel Standard (CFS) Program, there are two program streams providing the following amounts of funding to eligible organizations:
- Feasibility and FEED Studies Stream: Up to 50% to a maximum of $5M to support clean fuel R&D and feasibility and FEED studies projects.
- Clean Fuel Facility Construction Stream: Up to 30% to a maximum of $150M to support clean fuel facility construction and infrastructure projects.
Individuals and legal entities validly incorporated or registered in Canada including not-for-profit and for-profit organizations such as:
- Electricity or gas utilities
- Private sector companies
- Industry associations
- Research associations
- Standards organizations
- Indigenous and community groups
- Canadian academic institutions
- Provincial, territorial, regional, or municipal governments or their departments or agencies where applicable
- Projects must be fully commissioned by March 31, 2026
Government Grants and Loans for Cleantech Innovation
Learn more about the top government grant and loan programs for Canadian cleantech innovation through programs such as the Strategic Innovation Fund (SIF) Net Zero Accelerator which provides up to 50% in grant funding for a minimum $10 million for projects focusing on leading significant changes towards creating a low-carbon economy.
Download our free Collaborative Research Project Guide to learn about how to perform innovative research projects in Canada.