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New federal fund for emissions reduction: Output-Based Pricing System Proceeds Fund

February 17, 2022 – Canada’s Minister of Environment & Climate Change, Steven Guilbeault, announced the launch of the Output-Based Pricing System Proceeds Fund—a new program to support industrial initiatives that reduce GHG emissions and deploy clean technology and green energy.

The program will use the proceeds from Canada’s carbon pollution pricing system for heavy industry (collected in Manitoba, New Brunswick, Ontario, Saskatchewan) to support low‑carbon technology projects in those provinces. About $161 million from the 2019 compliance period will go toward projects that reduce carbon emissions.

The Output-Based Pricing System Proceeds Fund has two streams:

The Decarbonization Incentive Program

The Decarbonization Incentive Program (DIP) is a merit-based program to support cleantech projects that will help decarbonize industrial sectors over the long term and reduce GHG emissions.

The amount of funding available through DIP for each province varies, depending on the carbon pricing proceeds collected from facilities in each respective province where the federal OBPS currently applies (or has applied in the past).

The DIP is currently accepting applications for project funding to return OBPS proceeds collected in the 2019 compliance period.

The Future Electricity Fund

The Future Electricity Fund (FEF) will support clean electricity projects and/or programs. Proceeds collected from electricity generating facilities covered by OBPS (e.g. utilities) will be returned through funding agreements with governments of jurisdictions where the federal carbon pollution pricing system currently applies (or has applied in the past).