Low-carbon Fuel Procurement Program
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Under the Greening Government Strategy, the Government of Canada is committed to reducing greenhouse gas (GHG) emissions from its operations and achieving net-zero emissions by 2050. A key part of this commitment is the purchase of low-carbon-intensity liquid fuels (henceforth referred to as low carbon 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 low carbon 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 low carbon 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 with other major fuel purchasers and key stakeholders to increase public and private sector procurement and market demand for low carbon fuels. The LCFPP is one of several federal measures that support domestic production and use of low carbon 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 liquid fuels
A low carbon fuel releases fewer GHG emissions over its life cycle than the conventional fossil-based fuel that it replaces or is blended with. Low carbon 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 low carbon fuels are chemically similar to conventional petroleum-based fuel and are completely compatible with existing fuel infrastructure, distribution systems and internal combustion engines at blends of up to 100%. They are generally synthetic hydrocarbon fuels, such as renewable diesel and sustainable aviation fuel.
Non-drop-in low carbon fuels have a different chemical structure than conventional petroleum-based fuels and are only compatible with existing fuel systems at relatively low blends (e.g. <10%). They are non-hydrocarbon fuels, such as biodiesel and ethanol.
For the LCFPP, the Government of Canada’s primary focus is the purchase of drop-in low carbon 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.
Program timelines and key milestones
Industry consultations and solicitations
Request for proposal: Low carbon marine fuel for St. John’s, Newfoundland and Labrador (F6854-230049-A)
In September 2023, the Government of Canada issued a Request for Proposal for up to 5.5 million litres of marine fuel (F6854-230049-A) containing 50% by volume of synthetic hydrocarbon components (also known as renewable diesel), for the Canadian Coast Guard at St. John’s, Newfoundland and Labrador.
In September 2023, the Government of Canada issued a Request for Proposal for up to 8 million litres of naval distillate fuel (W0103-249543_A), containing 40% by volume of synthesized paraffinic diesel (also known as renewable diesel), for the Department of National Defence at CFB Esquimalt, in British Columbia.
In September 2023, the Government of Canada issued the first Request for Proposal for up to 11 million litres of finished, blended aviation turbine fuel (W0125-241000_A), containing 30% by volume of synthetic hydrocarbon components (also known as sustainable aviation fuel), for the Department of National Defence at CFB Trenton, in Ontario.
In November 2022, the Government of Canada issued a Request for Standing Offers (RFSO) on Low Carbon Marine Fuel (F1719-221000/A) for Canadian Coast Guard marine fleets, located in British Columbia. More than one Standing Offer was issued as a result of this Solicitation.
In May 2022, the Government of Canada launched a Request for Information (RFI) on low carbon marine fuel (24062-220076/A).
This RFI was issued to consult industry on its interest, capacity and ability to supply drop-in low carbon fuels from renewable feedstocks for the Government of Canada’s marine fleets. The feedback received through this RFI was carefully considered and informed a refined marine fuel procurement approach and strategy.
In July 2020, the Government of Canada issued an RFI on the purchase of low carbon 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.
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