Energy Manager

November 22, 2023 – Ottawa has launched a new application period for the Low-Carbon Economy Challenge, which will spend up to $170 million to support projects that deploy “proven, low-carbon technologies”.

Also known as the Challenge Fund, those technologies could include things such as energy efficiency retrofits, waste diversion, and fuel switching (e.g. renewable energy production, heat pump installations).

The Challenge Fund is a competitive program, notes Environment and Climate Change Canada (ECCC). Projects submitted in different industry sectors, technologies, and by different applicant types are evaluated and selected based on merit. Only the most competitive projects submitted are selected for funding.

To that end, ECCC looks at an application’s cost-effectiveness, which it defines as the ratio of federal funding requested per tonne of carbon dioxide equivalent (CO2e) reduced in 2030.

Under past intakes, the project types that have been most cost-effective include:

• Waste diversion
• Biomass retrofits
• Industrial retrofits
• Anaerobic digesters
• Waste heat recovery
• HVAC system retrofits
• Carbon capture and utilization
• District energy system upgrades

Applicants may request anywhere from $1 million up to $25 million in funding for eligible project expenditures. Federal cost share will range from 25% to 75% of total eligible expenditures, depending on the applicant type:

25% federal cost share

• For-profit businesses

Example: a for-profit business is eligible for a 25% federal cost share. The federal contribution will be no less than $1 million. So a for-profit business will need to have a project that incurs eligible expenditures of at least $4 million overall.

50% federal cost share

• Not-for-profit organizations
• Public sector body or board
• Provinces and provincial entities
• Research, academic and educational institutions
• Regional/local/municipal governments or their entities located in a province

75% federal cost share

• Regional/local/municipal governments or their entities located in a territory
• Territories and/or territorial entities
• Indigenous recipients (including Indigenous for-profit organizations)

The open intake announcement was made at the University of Victoria, which is replacing one existing natural gas boiler with electric boilers with the aim of reducing its consumption of natural gas and overall GHG emissions. That project is being supported by up to $2.4 million from the 2022 Challenge Fund.

Environment and Climate Change Canada is accepting applications for the Challenge Fund until February 8, 2024.


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