Low Carbon Economy Challenge
The Low Carbon Economy Challenge (the Challenge Fund) leverages Canadian ingenuity to reduce greenhouse gas (GHG) emissions and generate clean growth.
The Challenge Fund continues to support a wide range of Canadian recipients to implement projects that deploy proven, low-carbon technologies resulting in material GHG emissions reductions across sectors, focusing on its cost-effectiveness objective to maximize GHG emissions reductions.
- Approximately $450 million total to support the Challenge Fund
- Only one annual program application process under the Challenge Fund, there will no longer be multiple program streams (e.g., Partnerships and Champions)
- Projects must result in GHG emissions reductions in 2030 and
- New! Projects must align with Canada’s goals for net-zero emissions by 2050
- Simpler application process:
- Expression of Interest no longer required
- More support:
- New! Self-Screening Tool for understanding project eligibility and competitiveness
- Earlier access to the Applicant Guide
The Challenge Fund will invest approximately $450 million over 5 years starting in 2024-25.
Federal cost share
Applicants may request 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 project expenditures that an applicant can receive from the Challenge Fund, depending on the applicant type.
Example: A for-profit business is eligible for a 25% federal cost share. The federal contribution will be no less than $1 million. Therefore, a for-profit business, eligible for up to 25% of eligible project expenditures, would need to have a project that will incur eligible expenditures of at least $4 million overall.
The maximum federal cost share for specific recipients is as follows:
- 25% for for-profit businesses
- 50% for not-for-profit organizations
- 50% for public sector body or board
- 50% for provinces and provincial entities
- 50% for research, academic and educational institutions
- 50% for regional/local/municipal governments or their entities located in a province
- 75% for regional/local/municipal governments or their entities located in a territory
- 75% for territories and/or territorial entities
- 75% for Indigenous recipients (including Indigenous for-profit organizations)
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:
- sources of GHG emissions controlled by the applicant or project partner (direct) and/or grid electricity emissions (acquired)
- beyond what is required by existing regulations, standards, or codes and ongoing work by project proponents (incremental)
- directly and immediately the result of activities funded by the program
Projects must also meet other eligibility criteria, such as:
- 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)
Self-screening tool: Complete this tool to understand how your project aligns with program eligibility and its competitiveness. To access the tool, please send an email to email@example.com.
Any project that explores or encourages methods of reducing GHG emissions without implementing these methods is not eligible.
Examples of ineligible projects:
- research, development, and demonstration projects
- educational or capacity-building projects
- projects that primarily incent behavioural change
- feasibility or other pre-engineering studies
Ineligible projects or those eligible but not selected for funding may consider other funding opportunities through:
What makes a competitive proposal?
The Challenge Fund is a competitive program. 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. Because of the time and effort it takes to apply, it is important that applicants take the time to understand the merit of their project before deciding to apply.
Find more details on the merit criteria in the Applicant Guide.
Cost-effectiveness is defined as the ratio of federal funding requested per tonne of carbon dioxide equivalent (CO2 eq) 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
How to apply
We will be accepting applications from October 3, 2023 to January 12, 2024.
- September 2023: Self-screening tool and Applicant Guide are available
- October 3, 2023: Application period open
- Summer 2024: Final funding decisions
- Project completion: March 31, 2028
Environment and Climate Change Canada (ECCC) will provide applicants with updates on the status of their application during the evaluation stage. If needed, program officers may request clarifications to confirm project eligibility or to accurately assess merit. Applicants will be informed of final funding decisions in summer 2024.
How to apply
- Applicants are encouraged to complete the self-screening tool prior to accessing the application portal. To access the tool, please send an email to firstname.lastname@example.org.
- October 3, 2023: all application materials and guidance are available on the portal Program Information Management System (PIMS)
- To access PIMS: create a Single Window Information Manager (SWIM) profile
- Instructions for creating a profile: how to complete a user profile including a written step-by-step walkthrough and accompanying tutorial videos
- Low Carbon Economy Leadership Fund
- Indigenous Leadership Fund
- Implementation Readiness Fund
- Low Carbon Economy Fund: visual image guidelines
If you have questions about the Challenge Fund, please contact the program advisors at email@example.com.
- your name
- contact information
- the organization you are representing
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