DAOD 3014-2, Provision and Reporting of Fuel and Lubricants

Table of Contents

1. Introduction
2. Definitions
3. Overview
4. Operating Principles
5. Fuel Programs and Arrangements
6. Reporting
7. Compliance and Consequences
8. Responsibilities
9. References

1. Introduction

Date of Issue: 2025-05-20

Application: This DAOD is a directive that applies to employees of the Department of National Defence (DND employees) and an order that applies to officers and non-commissioned members of the Canadian Armed Forces (CAF members).

Approval Authority: Director of Staff, Strategic Joint Staff (DOS SJS)

Enquiries: Strategic Joint Staff, Strategic J4 Fuels and Lubricants (SJS Strat J4 (F&L))

2. Definitions

additive (additif)

A substance added to an alloy, a foodstuff, fuel, etc., to impart specific qualities to the product. (Defence Terminology Bank record number 695704)

aboveground storage tank (réservoir de stockage hors sol)

A tank that operates at atmospheric pressure and has all of its volume above ground.

Note – An aboveground storage tank is encased within a secondary containment.  (Based on Section 1 of Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations 2008) (Defence Terminology Bank record number to be assigned)

bulk fuel installation (installation de carburant en vrac)

A certified fuel facility and its associated infrastructure required for the storage and dispensing of large quantities of fuel.

Note – Bulk-fuel installations include fuel storage tanks, fuel distribution systems, product transfer areas and loading racks. (Defence Terminology Bank record number 28457)

class III, petroleum, oils and lubricants (classe III, produits pétroliers)

The NATO commodity class for petroleum, oils and lubricants.

Note – Petroleum, oils and lubricants include hydraulic and insulating oils, fuel preservatives, liquid and compressed gases, chemical products, coolants, de-icing and anti-freeze products. (Defence Terminology Bank record number to be assigned)

fossil fuel (combustible fossile)

Combustible material obtained from below ground and formed from remains of organisms during the geological past. (Defence Terminology Bank record number to be assigned)

greenhouse gas (gaz à effet de serre)

A gaseous component of the atmosphere that retains some of the infrared radiation from the Earth, contributing to global warming. (Defence Terminology Bank record number to be assigned)

memorandum of understanding (protocole d'entente)

A written, approved, non-contractual, non-legally binding arrangement that may be developed at any level within the DND and the CF, by which the DND or the CF and other participants external to the DND and the CF decide to cooperate in a project, program or similar undertaking. (Defence Terminology Bank record number 43137)

strategic fuel reserve (réserve stratégique de carburant)

A bulk fuel inventory required to support operations that have a national-security implications. (Defence Terminology Bank record number to be assigned)

3. Overview

Context

3.1 Activities related to class III petroleum, oil and lubricants (POL) inventory and management are recorded, to the maximum extent practicable, in the Materiel Management System of Record in accordance with A‑LM‑007‑100/AG‑001, Supply Administration Manual, using standard operating procedures and policies for fuel and lubricants.

3.2 The DND and the CAF must maintain a record for procured class III (POL). There are the following three methods to report the usage of class III (POL):

1. Defence Resource Management Information System (DRMIS) for class III (POL) procured for inventory;
2. RETScreen Clean Energy Management Software (RETScreen) for heating fuel procured for permanent infrastructure; and
3. Government of Canada Fleet Card (GCFC) Fleet Management Support Services for the purchase of class III (POL) by users.

3.3. The Treasury Board (TB), through the Centre for Greening Government, ensures that Canada is a global leader in government operations that are net-zero, resilient and green. The DND and the CAF are the largest emitters of greenhouse gases in the federal government and must play a key role in ensuring that the Government of Canada (GoC) reaches its net-zero emissions target by 2050.

Purpose

3.4 The purpose of this DAOD is to provide direction and guidance regarding management and responsibilities for fuel and lubricants, and their governing programs, arrangements and reporting policies.

4. Operating Principles

4.1 The DND and the CAF must:

1. comply with energy and environmental policies and initiatives of Canada as detailed in the Defence Climate and Sustainability Strategy (DCSS) 2023-2027;
2. ensure the accuracy of information for fuel and lubricants in accordance with the TB Directive on Management of Materiel;
3. develop, implement and comply with fuel exchange agreements and programs that Canada enters into with other States, agencies and international organizations;
4. certify and record class III (POL) data in the Materiel Management System of Record, in accordance with A-LM-007-100/AG-001, Financial Administration Manual (FAM), Chapter 53, Receipts and Issues of Petroleum Oils, Lubricants, and FAM Chapter 1020-5, Inventory; and
5. utilize fleet fuel cards for authorized procurement of class III (POL), in accordance with the National Standing Offer for Fleet Management Support Services.

5. Fuel Programs and Arrangements

National Fuel Procurement Program (NFPP)

5.1 The NFPP is managed by Public Services and Procurement Canada (PSPC). All federal government departments and agencies listed in Schedules I and II of the Financial Administration Act may participate in the NFPP. The NFPP is for domestic fuel provisioning and encompasses the following:

1. central responsibility for the procurement of fuel, combining product, market, logistical and fuel-procurement knowledge, as well as technical expertise; and
2. the consolidation of fuel requirements, allowing all clients to benefit from lower fuel prices.

5.2 The following products are purchased under the NFPP:

1. aviation fuel;
2. marine fuel;
3. diesel fuel, including low-sulphur diesel;
4. automotive gasoline, including ethanol blended gasoline, i.e. E10 and E85; and
5. heating oil.

5.3 The consolidation of fuel requirements for the DND and the CAF is done annually by the Director Land Procurement (DLP), which allows the DND and the CAF to benefit from lower fuel prices negotiated by PSPC on behalf of all government departments and agencies for commonly used fuel. As such, fuel managers, in collaboration with key stakeholders, must prepare their class III (POL) forecasts for their organization and report to DLP in accordance with the DLP annual call letter.

The GCFC Program

5.4 The GCFC Program was established by PSPC on behalf of the GoC to facilitate the payment of class III (POL) products by users. The GCFC may be utilized domestically and internationally for the authorized procurement of class III (POL) in accordance with the National Standing Offer for Fleet Management Support Services. The GCFC provider is responsible for compiling and maintaining records on their provision of class III (POL) goods to the DND and the CAF, in accordance with the Fleet Management Support Services Agreement. The Strat J4 F&L manages the GCFC Program for class III (POL) on behalf of the DND and the CAF.

5.5 Invoices resulting from the use of GCFC are not centrally paid. Therefore, responsibility centre managers must ensure that all accounts under their purview are paid by the statement due date or in accordance with the terms of the contract. Payments must be completed in accordance with FAM Chapter 1016-7, Departmental Credit Cards, and the TB Directive on Payments, and recorded in the Materiel Management System of Record.

International Arrangements

5.6 Provisioning of fuel and lubricants under a memorandum of understanding (MOU) for the DND and the CAF from foreign nations requires financial payment or barter exchange, e.g. replacement-in-kind, equal-value-exchange or a combination of same. For MOUs having financial implications, records must be maintained to ensure that there is an audit trail for the authorization and use of the MOU.

5.7 Although MOUs are non-legally binding, the DND and the CAF are committed to using MOUs to set out the terms of cooperative working arrangements with external organizations. Details on MOUs may be found in DAOD 7014-0, Memorandum of Understanding, and DAOD 7014-1, Memoranda of Understanding Development.

5.8 When a DND or CAF office of primary interest is contemplating the use or initiation of an arrangement dealing with provisioning of fuel and lubricants from a foreign State, advice should be sought from SJS Strat J4 F&L, Canadian Joint Operations Command (CJOC) J4 Agreements or the appropriate subject matter legal advisor.

6. Reporting

General

6.1 In accordance with the TB Directive on the Management of Materiel, the DND and the CAF are responsible for the management of materiel and for the completeness and accuracy of the information submitted to TB. As such, all class III (POL) transactions are recorded. The three categories and mechanisms for the Materiel Management System of Record are: 

1. fuel procured for inventory, i.e. bulk fuel purchased for redistribution or use in DND and CAF aircrafts, ships, vehicles, field heaters, generators and other equipment, which must be:
   1. recorded in the DRMIS Materiel Module in accordance with A-LM-007-100/AG-001; and
   2. managed in accordance with the accountability and control measures in Chapter 9.8 of A-LM-007-100/AG-001;
2. bulk fuel procured for use in permanent infrastructure, i.e. heating fuel and natural gas for DND and CAF buildings, which must:
   1. be procured using DRMIS finance payment procedures; and
   2. have consumption data captured and reported by the RETScreen developed by the GoC; and
3. fuel procured using GCFC, which must be managed by the service provider mandated to:
   1. manage and report to the DND and the CAF; and
   2. capture consumption and financial data on behalf the DND and the CAF and reported as required.

Inspections

6.2 In compliance with the Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum of the Canadian Council of Ministers of the Environment, commanding officers of bases, wings, technical services sections and mission support squadrons must conduct yearly inspections of their respective bulk fuel installations. The details regarding the annual and other recurring inspections and schedule are set out in A-LM-007-000/FP-001 (TBI), Operating Procedures and Standards for Bulk Fuel Installation Supervisors and Operators. (draft)

6.3 Any problem or defect found as a result of an inspection must be reported immediately through the chain of command in order for the appropriate work order to be raised as soon as possible. In accordance with the Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum, all records related to bulk fuel installations must be maintained for at least seven years.

Reporting of Strategic Fuel Reserves

6.4 Strategic fuel reserves are held in support of operations that have national security implications and apply to all aboveground and underground bulk fuel tanks holdings for aviation, marine and ground fuel that is intended for redistribution. The Chief of the Defence Staff (CDS) sets the minimum stocking levels of strategic fuel reserves.

6.5 The strategic fuel reserve is comprised of local fuel reserves and must be recorded by fuel installation and facility supervisors as safety stock in the Materiel Management System of Record using the storage locations accounts assigned to their organizations. The details regarding the materiel management of safety stock are set out in A‑LM‑007‑100/AG‑001, Chapter 9.8, Fuel Management.

6.6 As detailed in the North Atlantic Treaty Organization (NATO) Bulk Fuel Strategy, the ability of NATO to ensure adequate fuel support for Article 5 collective defence and other NATO operations and missions depends on the strategic fuel reserves of the member States. The DND and the CAF are required to report annually to the NATO Operational Energy Committee on fuel requirements, civil pipeline systems and bulk fuel storage installations and capabilities. The annual report provides information for the decision-making process for the two NATO strategic commands: the Military Committee and the Logistics Committee.

6.7 SJS Strat J4 F&L, in consultation with the key stakeholders, must compile and report annually to NATO PC on the fuel requirements and capabilities of the DND and the CAF. The NATO PC annual report must:

1. follow the template provided by the NATO PC Staff Officer or office of primary interest; and
2. be submitted annually with a security classification in accordance with the national guidelines.

7. Compliance and Consequences

Compliance

7.1. DND employees and CAF members must comply with this DAOD. Should clarification of the policies or instructions set out in this DAOD be required, DND employees and CAF members may seek direction through their channel of communication or chain of command, as appropriate. Managers and military supervisors have the primary responsibility for and means of ensuring the compliance of their DND employees and CAF members with this DAOD.

Consequences of Non-Compliance

7.2. DND employees and CAF members are accountable to their respective managers and military supervisors for any failure to comply with the direction set out in this DAOD. Non-compliance with this DAOD may have consequences for both the DND and the CAF as institutions, and for DND employees and CAF members as individuals. Suspected non-compliance may be investigated. Managers and military supervisors must take or direct appropriate corrective measures if non-compliance with this DAOD has consequences for the DND or the CAF. The decision of a level one advisor or other senior official to take action or to intervene in a case of non-compliance, other than in respect of a decision under the Code of Service Discipline regarding a CAF member, will depend on the degree of risk based on the impact and likelihood of an adverse outcome resulting from the non-compliance and other circumstances of the case.

7.3. The nature and severity of the consequences resulting from non-compliance should be commensurate with the circumstances of the non-compliance and other relevant circumstances. Consequences of non-compliance may include one or more of the following:

1. the ordering of the completion of appropriate learning, training or professional development;
2. the entering of observations in individual performance evaluations;
3. increased reporting and performance monitoring;
4. the withdrawal of any authority provided under this DAOD to a DND employee or CAF member;
5. the reporting of suspected offences to responsible law enforcement agencies;
6. the application of specific consequences as set out in applicable laws, codes of conduct, and DND and CAF policies and instructions;
7. other administrative action, including the imposition of disciplinary measures, for a DND employee;
8. other administrative or disciplinary action, or both, for a CAF member; and
9. the imposition of liability on the part of His Majesty in right of Canada, DND employees and CAF members.

Note – In respect to the compliance of DND employees, see the TB Framework for the Management of Compliance for additional information.

8. Responsibilities

Responsibility Table

8.1 The following table identifies the responsibilities associated with this DAOD:

9. References

Acts, Regulations, Central Agency Policies and Policy DAOD

• Alternative Fuels Act
• Canadian Environmental Assessment Act, 2012
• Canadian Environmental Protection Act, 1999
• Financial Administration Act
• National Defence Act
• Alternative Fuels Regulations
• Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations
• The Paris Agreement
• Framework for the Management of Compliance, Treasury Board
• Policy on the Planning and Management of Investments, Treasury Board
• Directive on Payments, Treasury Board
• Directive on the Management of Materiel, Treasury Board
• Directive on the Management of Procurement, Treasury Board
• Directive on the Management of Real Property, Treasury Board
• Greening Government Strategy – A Government of Canada Directive, Treasury Board
• DAOD 1000-4, Policy Framework for Materiel and Asset Management 
• DAOD 3014-0, Fuel and Lubricants

Other References

• DAOD 2008-3, Issue and Crisis Management
• DAOD 3000-0, Materiel Acquisition and Support
• DAOD 3015-0, Green Procurement
• DAOD 4003-0, Environmental Protection and Stewardship
• DAOD 4003-1, Hazardous Materials Management
• DAOD 7014-0, Memorandum of Understanding
• DAOD 7014-1, Memoranda of Understanding Development
• A-LM-007-100-AG-001, Supply Administration Manual
• A-LM-007-000/FP-001 (TBI), Operating Procedures and Standards for Bulk Fuel Installation Supervisors and Operators (draft)
• A-LM-158-004/AG-001, Transportation Manual, Volume 4, Movement of Materiel
• B-GL-300-004/FP-001, Sustainment of Land Operations
• C-82-005-001/AM-004, Technical Reference for Fuels, Lubricants & Associated Products
• C-82-007-001/AF-000, Technical Reference Book on Petroleum and Associated Products
• C-82-010-007/TP-000, Quality Control of Aviation and Ground Fuels and Lubricants
• FAM Chapter 53, Receipts and Issues of Petroleum, Oils, and Lubricants
• FAM Chapter 1016-7, Departmental Credit Cards
• FAM Chapter 1020-5, Inventory
• National Fuel Procurement Program, Public Services and Procurement Canada
• Policy on Green Procurement, Public Services and Procurement Canada
• Environmental Code of Practice for Aboveground and Underground Storage Tank Systems Containing Petroleum and Allied Petroleum, Canadian Council of Ministers of the Environment
• NATO Bulk Fuel Strategy (available in English only)
• NATO Standardization Coordination, CJWC NATO Standardization Coord Site (available in English only)
• NATO Logistics Handbook
• NATO Standard AJP-4.7, Allied Joint Doctrine For Petroleum (available in English only)
• NATO Document AC/112-D (2020)0001, Petroleum Committee Vision On Future Fuels
• Defence Climate and Sustainability Strategy 2023-2027, Government of Canada website
• Defence Environmental Strategy, ADM(IE) intranet site
• Fleet Card Information, SJS intranet site
• CJOC Logistics Agreements, CJOCHQ J4 Sharepoint site
• The Federal Sustainable Development Strategy, Government of Canada website