Low-carbon Fuel Procurement Program

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Program overview

Under the Greening Government Strategy, we are committed to reducing greenhouse gas (GHG) emissions from Government of Canada operations and achieving net-zero emissions by 2050. A key part of this commitment is the purchase of drop-in low-carbon-intensity liquid fuels for our federal air and marine fleets.

Budget 2021 allocated $227.9 million in funding over eight years (fiscal years 2023–24 to 2030–31) to the Treasury Board of Canada Secretariat’s Centre for Greening Government to implement a Low-carbon Fuel Procurement Program (LCFPP) within the Greening Government Fund. This allocation will support the purchase of drop-in low-carbon-intensity liquid fuels for the federal air and marine fleets.

The LCFPP will provide funding to federal air and marine fleet departments to help offset the extra costs of purchasing these fuels. The LCFPP will support the purchase of more than 300 million litres of neat drop-in-low-carbon-intensity fuels by the end of fiscal year 2030–31. The volume of fuel purchased will be split between marine fuels and aviation fuels. The exact volumes will be determined once the procurement strategies are established.

Through the LCFPP, we will work other major fuel purchasers and key stakeholders to increase public and private sector procurement and market demand for low-carbon-intensity fuels. The LCFPP is one of several federal measures that support domestic production and use of low-carbon-intensity fuels. These measures include the recent investment of $1.5 billion for a Clean Fuels Fund and the federal Clean Fuel Regulations.

Low-carbon-intensity fuels

A low-carbon-intensity fuel releases fewer GHG emissions over its life cycle than the conventional fossil-based fuel that it replaces or is blended with. Low-carbon-intensity liquid fuels can be sorted in two categories, based on their compatibility with conventional fuels and systems: drop-in fuels and non-drop-in fuels.

Drop-in fuels are chemically similar to conventional petroleum-based fuel and are completely compatible with existing fuel infrastructure, distribution systems and internal combustion engines. They are generally synthetic hydrocarbon fuels, such as renewable diesel and sustainable aviation fuel.

For the LCFPP, the Government of Canada is focussing on the purchase of drop-in low-carbon-intensity fuels that are made from renewable feedstocks (such as biofuels).

Federal air and marine fleet operations

Historically, the federal air and marine fleets have been responsible for 40–45% of the Government of Canada’s annual operational GHG emissions. For example, in 2018–19, the federal fleet consumed 237 million litres of aviation fuel and 124 million litres of marine fuel and generated almost 950 kilotonnes of GHG emissions. Most of this fuel was consumed by National Safety and Security Fleet operations, which includes National Defence, the Canadian Coast Guard and the Royal Canadian Mounted Police.

Greenhouse gas emissions generated by the federal fleet (Government of Canada’s Greenhouse Gas Emissions Inventory)

Program timelines and key milestones

Timelines Key milestones
2020
  • Request for Information on Low-Carbon-Intensity Fuels for the Federal Air and Marine Fleets (24062-210076/B)
2021
  • Budget 2021 announces funding for LCFPP
2022
  • Request for Information on Low-Carbon Intensity Marine Fuel (24062-220076/A)
  • Establish low-carbon intensity marine fuel procurement mechanism
2023
  • Initiate low-carbon-intensity aviation fuel procurement process
  • First deliveries of marine fuels
2024
  • Anticipated first deliveries of low-carbon-intensity aviation fuel
2031
  • End of LCFPP

Industry consultations

Request for information: Low-carbon intensity marine fuel [open]

In May 2022, the Government of Canada launched a Request for Information (RFI) on low-carbon-intensity marine fuel (24062-220076/A), which closes on July 29, 2022. The purpose of this RFI is to consult the industry on its interest, capacity and ability to supply drop-in low-carbon-intensity liquid fuels from renewable feedstocks for the Government of Canada’s marine fleets. 

The feedback received from this RFI will be used to inform the marine fuel procurement strategy.

This RFI addresses only marine fuels. The Government of Canada will launch a separate process before the end of fiscal year 2022–23 to address aviation fuels.

Additional information on the RFI, including the proposed procurement strategy, requirements for drop-in low-carbon-intensity fuels and details on upcoming engagement sessions, is available through the tender notice.

The Government of Canada intends to purchase marine fuels, including those that contain a synthetic hydrocarbon component, for use by the federal marine fleet. The Government of Canada intends to issue, through a competitive process, one or more Standing Offers for fuel deliveries starting on June 1, 2023. The duration of these standing offers is expected to be a two-year term.

Request for Information: Low-carbon-intensity marine fuel (24062-220076/A)

Request for information on low carbon intensity fuels [closed]

In July 2020, the Government of Canada issued an RFI on the purchase of low-carbon-intensity fuels made from renewable feedstocks (such as biomass) for the federal air and marine fleets (24062-210076/B). Respondents to that RFI signaled their interest, ability and capacity to supply these fuels for the Government of Canada’s federal air and marine fleet.

Request for information: Low-carbon-intensity fuels for the federal air and marine fleets (24062-210076/B)

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