The Low Carbon Economy Fund - Low Carbon Economy Challenge

Q: How much funding can be received?

The Low Carbon Economy Fund - Low Carbon Economy Challenge Funds up to 75% of admissible expenses.

Q: What is the deadline to apply?

The program is accepting continuous intake

Q: Is the The Low Carbon Economy Fund - Low Carbon Economy Challenge a grant, loan, or tax credit?

The Low Carbon Economy Fund - Low Carbon Economy Challenge is a Grant and Funding

Q: Who are the financial supporters of the The Low Carbon Economy Fund - Low Carbon Economy Challenge?

The Low Carbon Economy Fund - Low Carbon Economy Challenge is funded by Government of Canada

Q: Who is eligible for the The Low Carbon Economy Fund - Low Carbon Economy Challenge program?

To be eligible for the The Low Carbon Economy Fund - Low Carbon Economy Challenge program, you must: • Canadian for-profit businesses (small, medium, or large) are eligible. • Applicant must be established and operating in Canada. • Project must reduce GHG emissions and not be required by regulation, routine maintenance, or pre-existing commitments.

Q: Who can I contact for more information about the The Low Carbon Economy Fund - Low Carbon Economy Challenge?

You can contact Government of Canada by email at lcef-fefec@ec.gc.ca.

Q: Where is the The Low Carbon Economy Fund - Low Carbon Economy Challenge available?

The The Low Carbon Economy Fund - Low Carbon Economy Challenge program is available across Canada.

Q: Are Indigenous Peoples eligible for the The Low Carbon Economy Fund - Low Carbon Economy Challenge program?

Yes, Indigenous Peoples are eligible to apply for the The Low Carbon Economy Fund - Low Carbon Economy Challenge program.

Last Update: July 28, 2025

Canada

Supports projects reducing GHG emissions using low-carbon technologies

At a glance

Eligible Funding

Min. $1,000,000
Up to 75% of project cost

Timeline

Open Date : January 1, 2023
Closing date : February 8, 2024

Financing Type

Grant and Funding

Eligible Industries

Manufacturing
Administrative and support, waste management and remediation services

Funds Providers

Unspecified

Program status

Closed

Overview

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.

Financing terms and conditions

Federal funding per project ranges from a minimum of $1,000,000 to a maximum of $25,000,000.
The maximum cost-share depends on the type of lead applicant or final beneficiary (e.g., 25% for for-profit businesses, up to 75% for Indigenous and territorial entities).
The combined federal funding (including all federal sources) must not exceed the cost-sharing maximum for the applicant type (e.g., 25% for for-profits).
The cumulative public funding from all federal, provincial, and municipal sources must not exceed 50% of eligible expenses for for-profit businesses, up to 100% for certain public or Indigenous beneficiaries.
No eligible expenses can be incurred or claimed before the date of approval in principle or after March 31, 2028.

Activities funded

Implementation of energy efficiency upgrades in fixed and mobile equipment.
Improvement of building envelopes, such as insulation, windows, and doors.
Deployment of clean electricity or low-carbon fuel production systems for internal use.
Installation of heat recovery, fuel switching, or combined heat and power (cogeneration) systems.
Waste diversion and landfill gas capture initiatives, as well as modifications to reduce industrial process emissions.
Carbon capture, storage, or utilization projects (excluding enhanced oil recovery).

Eligibility

The applicant must be located and operating in Canada.
Eligible applicants include provinces, territories and their entities; regional, local, or municipal governments and their entities; Indigenous recipients (including Indigenous for-profits); public sector organizations or boards; research, academic, or educational institutions; Canadian not-for-profit organizations; and Canadian for-profit businesses of all sizes.
The project must lead to significant and incremental reductions in greenhouse gas (GHG) emissions and must be sufficiently prepared for implementation.
The applicant and project must meet all specific program requirements, including project location, type of activity, and usage criteria as defined by the program guidelines.

Who is eligible?

Provincial governments and provincial agencies
Territorial governments and territorial agencies
Regional, local, or municipal administrations and their entities (regardless of population size)
Indigenous communities and organizations (including First Nations, Métis, Inuit, and Indigenous for-profit organizations)
Public sector organizations or boards (e.g., school boards, health authorities)
Educational and research institutions (public or private colleges, universities, and research institutes)
Canadian non-profit organizations (such as municipal/provincial/territorial associations, professional or sector organizations)
Canadian for-profit businesses (small, medium, and large enterprises established in Canada)

Who is not eligible

In the current grant context for the Low Carbon Economy Challenge, the guidelines do not explicitly list specific types of companies or industries that are ineligible based on their status or main activity. The restrictions are more focused on the nature of the projects being proposed rather than the industry status of the applicants.

Eligible expenses

Fees for contractors performing project activities.
Purchase or leasing of equipment or capital assets directly required for the project.
Construction, refurbishment, or improvement of project-related assets.
Expenses for materials and supplies necessary for project implementation.
External professional and management services (e.g., accounting, communications, translation, audits, technical and environmental reviews, measurement and reporting).
Project-related travel, accommodation, and meeting expenses (subject to federal guidelines and caps).
Hospitality costs linked to Indigenous ceremonial offerings (meals, refreshments, traditional items).
Monetary honoraria to Indigenous Elders or Knowledge Keepers participating in the project.
Indirect administrative or overhead costs, including licenses, utilities, insurance, IT maintenance, and office support (capped at 20% of the federal contribution and must be project-related and pre-approved).
Planning and evaluation costs, such as engineering, surveying, supervision, and testing (capped at 5% of the federal contribution and subject to approval).
Printing, production, and distribution costs for joint federal communications and project signage.
Incremental salaries and benefits for technical or project-focused employees (capped at 2% of the federal contribution and subject to certain conditions and pre-approval).
Training expenses for employees on new technologies, equipment, software, or project-specific systems.
Provincial Sales Tax (PST), Goods and Services Tax (GST), or Harmonized Sales Tax (HST) not eligible for reimbursement or credits.

Eligible geographic areas

All provinces and territories in Canada
Projects must be located within Canada

Selection criteria

Greenhouse Gas (GHG) Merit (70 points): Assessed on cost-effectiveness of GHG reduction, including federal funding required per tonne of CO₂ equivalent reduced in 2030 (50 points) and cumulatively to 2050 (20 points).
Alignment with Net-Zero Objectives by 2050 (15 points): Degree of project alignment with Canada's long-term decarbonization goals and its role in supporting net-zero trajectories.
Co-benefits (15 points): Consideration of other significant project benefits, such as clean growth, environmental improvements, Indigenous leadership, or health and safety.
Project Risk and Mitigation: Assessment of identified project risks and proposed mitigation strategies; projects with high risks and inadequate mitigation may not be selected.

How to apply

Review Eligibility Criteria and Guidelines

Read the Low Carbon Economy Challenge Applicant Guide thoroughly to understand eligibility criteria and assessment process.
Ensure your project aligns with the objectives of reducing GHG emissions and complies with all eligibility requirements.

Prepare Application Documents

Prepare a detailed project proposal that includes the project description, expected GHG reductions, and cost-effectiveness analysis.
Compile necessary documents like financial statements, project timelines, and evidence of technological capability.

Submit Application

Access the application portal on the Low Carbon Economy Fund website.
Complete the application form with accurate information and upload all required supporting documents.
Submit the finalized application before the deadline on February 8, 2024.

Acknowledgment of Submission

Receive a confirmation email acknowledging receipt of your application.
Retain this confirmation for future reference and follow-up.

Additional information

Approval of funding is not guaranteed until a formal funding agreement is signed, even after receiving approval in principle.
Applicants must provide clear, complete, and detailed information as applications will be evaluated as submitted; only critical clarifications may be requested.
Regular reporting is mandatory throughout the project lifecycle, including semi-annual progress and a final report upon project completion.
Environmental, Indigenous, and diversity impacts of the project will be reviewed as part of the assessment process.

Documents and links

The Low Carbon Economy Fund - Low Carbon Economy Challenge

Contacts

lcef-fefec@ec.gc.ca

Apply to this program

Frequently Asked Questions about the The Low Carbon Economy Fund - Low Carbon Economy Challenge Program

Here are answers to the most common questions about the The Low Carbon Economy Fund - Low Carbon Economy Challenge. This section explains what the program is, how much funding is available, eligibility requirements, application deadlines, and other important details to help you determine if this grant is right for your business.

What is the The Low Carbon Economy Fund - Low Carbon Economy Challenge?

How much funding can be received?

What is the deadline to apply?

Is the The Low Carbon Economy Fund - Low Carbon Economy Challenge a grant, loan, or tax credit?

Who are the financial supporters of the The Low Carbon Economy Fund - Low Carbon Economy Challenge?

Who is eligible for the The Low Carbon Economy Fund - Low Carbon Economy Challenge program?

Who can I contact for more information about the The Low Carbon Economy Fund - Low Carbon Economy Challenge?

Where is the The Low Carbon Economy Fund - Low Carbon Economy Challenge available?

Are Indigenous Peoples eligible for the The Low Carbon Economy Fund - Low Carbon Economy Challenge program?

Financing for large-scale international infrastructure projects

Canada