The Low Carbon Economy Fund - Low Carbon Economy Challenge
Canada
The Low Carbon Economy Challenge Fund catalyzes Canadian innovation to achieve significant GHG emissions reductions and foster clean growth.
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Grant and Funding
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- Manufacturing
- Administrative and support, waste management and remediation services
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- Government of Canada
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The Low Carbon Economy Challenge Fund leverages Canadian innovation to reduce greenhouse gas emissions and foster clean growth. It supports projects that deploy proven low-carbon technologies resulting in significant GHG reductions. Eligible activities must lead to direct and immediate emissions reductions that go beyond existing regulations and must be primarily for the applicant's or their partner's own use.
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Yes, there are eligible projects and activities for this grant.
- Projects resulting in reductions in GHG emissions in 2030 aligned with Canada's goals for net-zero emissions by 2050.
- Projects involving sources of GHG emissions controlled by the applicant or project partner (direct) and/or grid electricity emissions (acquired).
- Projects going beyond what is required by existing regulations, standards, or codes and ongoing work by project proponents (incremental).
- Projects resulting directly and immediately from activities funded by the program.
- Projects with the capacity to make use of commercially available technology.
- Projects with confirmed project location.
- Production of electricity or fuel primarily for own use, within the applicant’s or identified partner’s operations (with exceptions for rural or remote communities or for district energy or industrial combined heat-and-power).
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To be eligible, projects must result in reductions in GHG emissions in 2030 and align with Canada’s goals for net-zero emissions by 2050. These reductions must be beyond what is required by existing regulations, standards, or codes and ongoing work by project proponents.
- Capacity to make use of commercially available technology
- Confirmation of project location
- Production of electricity or fuel must be primarily for own use, within the applicant’s or identified partner’s operations (except for projects located in rural or remote communities or for district energy or industrial combined heat-and-power)
- Sources of GHG emissions controlled by the applicant or project partner (direct) and/or grid electricity emissions (acquired)
- The GHG reductions must be directly and immediately the result of activities funded by the program
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Yes, there are eligible types of companies for the Low Carbon Economy Challenge Fund. Eligible applicants must ensure that their projects result in material GHG emissions reductions and make use of commercially available technology.
- For-profit businesses
- Not-for-profit organizations
- Public sector bodies or boards
- Provinces and provincial entities
- Research, academic, and educational institutions
- Regional/local/municipal governments or their entities located in a province
- Regional/local/municipal governments or their entities located in a territory
- Territories and/or territorial entities
- Indigenous recipients (including Indigenous for-profit organizations)
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Eligible expenditures for this grant include costs that directly contribute to the reduction of greenhouse gas emissions and are associated with the implementation of low-carbon technologies. Only costs essential to the completion of the project and resulting in direct GHG reductions are eligible.
- Project design and engineering costs
- Capital costs for the purchase and installation of equipment
- Project management costs
- Costs related to environmental assessments
- Labour and professional service fees
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Eligible geographic zones for this grant include all regions of Canada, with specific higher funding percentages for territories and Indigenous recipients.
- Entirety of Canada
- Provinces
- Territories
- Indigenous communities
- Municipalities
- Regional/local governments
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The Challenge Fund is a competitive program that evaluates and selects projects based on merit, focusing heavily on cost-effectiveness. The most competitive projects demonstrate significant GHG emissions reductions and align with Canada's goals for net-zero emissions by 2050.
- Cost-effectiveness: Ratio of federal funding requested per tonne of CO2 eq reduced in 2030
- GHG emissions reductions in 2030
- Alignment with Canada's net-zero emissions goals by 2050
- Use of commercially available technology
- Production of electricity or fuel primarily for own use
- Incremental reductions beyond existing regulations, standards, or codes
- Immediate results from funded activities
- Project location confirmation
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- Step 1: Ensure Eligibility
- Verify that your project aligns with the eligibility criteria, including GHG reduction goals and use of commercially available technology.
- Step 2: Prepare Application
- Gather all necessary documentation and information required for the application process, including project specifics and financial details.
- Step 3: Submit Application
- Submit the completed application before the deadline (February 8, 2024). Ensure all required fields are filled out and documentation is attached.
- Step 4: Eligibility Screening
- Your application will be reviewed for completeness and to determine if it meets all eligibility criteria.
- Step 5: Merit Evaluation
- Eligible applications will be evaluated based on the Challenge merit framework and scored out of 100 points.
- Step 6: Project Selection
- Applications will be ranked based on merit scores and other considerations. Successful applications will proceed to the selection stage.
- Step 7: Ministerial Approval
- Projects will be recommended for funding to the Minister of Environment and Climate Change. Approved projects will receive a notification of approval-in-principle.
- Step 8: Sign Funding Agreement
- Follow the next steps outlined in the approval-in-principle notification to finalize a funding agreement with ECCC.
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The grant offers additional channels for funding opportunities and provides specific guidelines on visual image requirements for funded projects.
- Ineligible projects or those not selected for funding may consider other funding opportunities through the following portals: Our environment, Clean Growth Hub, and Innovation Canada.
- For visual image guidelines related to the Low Carbon Economy Fund, reference specific guidelines provided in the related links section.
grant_single_labels|contact
lcef-fefec@ec.gc.ca
Apply to this program
Low Carbon Economy Challenge Fund Overview
The Low Carbon Economy Challenge Fund aims to support Canadian projects that reduce greenhouse gas emissions and promote clean growth by leveraging innovative, low-carbon technologies. The fund offers significant financial aid, ranging from $1 million to $25 million, depending on project eligibility and merit.
Understanding the Low Carbon Economy Challenge Fund
The Low Carbon Economy Challenge Fund (the Challenge Fund) is an initiative by Environment and Climate Change Canada (ECCC) to catalyze meaningful greenhouse gas (GHG) emissions reductions across various sectors in Canada. By promoting the deployment of proven low-carbon technologies, the Challenge Fund aligns with Canada’s broader objectives of achieving net-zero emissions by 2050.
Available Funding
The Challenge Fund features a flexible funding structure to support a wide range of projects. Applicants can request funding between $1 million and $25 million for eligible project expenditures. The federal cost share varies by applicant type:
- For-profit businesses: 25%
- Not-for-profit organizations: 50%
- Public sector bodies or boards: 50%
- Provinces and provincial entities: 50%
- Research, academic, and educational institutions: 50%
- Regional/local/municipal governments or their entities located in a province: 50%
- Regional/local/municipal governments or their entities located in a territory: 75%
- Territories and/or territorial entities: 75%
- Indigenous recipients (including Indigenous for-profit organizations): 75%
For example, a for-profit business must incur eligible expenditures of at least $4 million to receive the minimum federal contribution of $1 million, given the 25% cost share.
Eligibility Criteria
To qualify for funding, projects must demonstrate a tangible impact on GHG emissions by 2030 and contribute to Canada's net-zero emissions goal by 2050. Key eligibility requirements include:
- Reduction of GHG emissions from sources controlled by the applicant or an identified project partner (direct) or grid electricity emissions (acquired).
- Reductions must be incremental, meaning they exceed current regulatory, standard, or code requirements and the ongoing work of project proponents.
- Direct and immediate results from funded activities.
Projects must also utilize commercially available technologies, confirm their location, and ensure that electricity or fuel production is primarily for the applicant’s or an identified partner's operations. Exceptions apply to projects in rural or remote communities and for district energy or industrial combined heat-and-power projects.
Ineligible Projects
Projects focusing on research, development, and demonstration without implementation, educational or capacity-building initiatives, behavioral change incentives, feasibility studies, and pre-engineering studies are not eligible for funding. Ineligible projects may explore other funding opportunities through various government portals and innovation hubs.
Assessment Criteria
The Challenge Fund is highly competitive, with a stringent assessment process. Applications are evaluated based on merit and cost-effectiveness, which is defined as the federal funding requested per tonne of CO2 equivalent reduced by 2030. Past cost-effective project types include:
- Waste diversion
- Biomass retrofits
- Industrial retrofits
- Anaerobic digesters
- Waste heat recovery
- HVAC system retrofits
- Carbon capture and utilization
- District energy system upgrades
Competitive applications are selected based on a comprehensive merit framework, which scores projects out of 100.
Assessment Process Timeline
The assessment process involves multiple stages:
- February - March: Eligibility review. Projects are screened for completeness and eligibility. Applicants are notified about further assessment eligibility.
- Late March - April: Merit evaluation. Eligible projects are scored based on the merit framework. Applicants receive updates on their progress.
- May - June: Project selection. Projects are ranked based on merit evaluation scores and other considerations identified in the Applicant Guide.
- July - August: Ministerial approval. ECCC recommends projects for funding to the Minister of Environment and Climate Change. Approved projects receive a notification of approval-in-principle by email, outlining steps towards signing a funding agreement.
Key Dates
- February 8, 2024, 8:00 pm EST: Application period closed.
- February 9, 2024: Assessment process begins.
- By late March: Applicants receive eligibility reviews and updates.
- By early May: Further updates on the status of applications.
- By August 2024: Final funding decision notifications.
- March 31, 2028: Project completion deadline.
Contact Information
If additional information or assistance is required, applicants can contact the program advisors via email at lcef-fefec@ec.gc.ca. Please include the following details in your email:
- Your name
- Contact information
- Organization representation
For further details, applicants are encouraged to review the Applicant Guide and related resources available on the official portal. The Applicant Guide provides in-depth information on eligibility criteria, assessment processes, and project merit evaluation frameworks, ensuring that applicants can submit competitive and impactful proposals.
