Low-carbon Fuel Procurement Program

On this page

• Program overview
• Low-carbon-intensity liquid fuels
• Federal air and marine fleet operations
• Carbon dioxide removal
• Program timelines and key milestones
• Industry consultations and solicitations
• Related links

Program overview

Under the Greening Government Strategy (GGS), the Government of Canada is committed to reducing greenhouse gas (GHG) emissions from its operations and achieving net-zero emissions by 2050. The GGS defines net-zero emissions as reducing GHG emissions from operations to as close to zero as possible and then balancing out any remaining emissions with an equivalent amount of carbon dioxide removal (CDR).

The Treasury Board of Canada Secretariat’s Centre for Greening Government operates a Low-carbon Fuel Procurement Program (LCFPP) within the Greening Government Fund. The LCFPP has $134.9 million in funding over eight years (fiscal years 2023–24 to 2030–31) to support the purchase of low-carbon-intensity liquid fuels for federal air and marine fleet operations and in 2024, the program was expanded to include the procurement of CDR services.

Through the LCFPP, we are working with other major purchasers and key stakeholders to increase public and private sector procurement and market demand for low-carbon-intensity liquid fuels and CDR services. The LCFPP is one of several federal measures that support the domestic development of these technologies and markets. These measures include the Clean Fuels Fund, Clean Economy Investment Tax Credits and the Clean Fuel Regulations.

Low-carbon-intensity liquid fuels

The LCFPP provides funding to federal air and marine fleet departments to help offset the extra costs of purchasing low-carbon-intensity liquid fuels (henceforth referred to as low carbon fuels). The LCFPP aims to support the purchase of approximately 200 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.

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.

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

Carbon dioxide removal

As defined in the GGS, CDR refers to “human activities that remove carbon dioxide from the atmosphere (for example, direct air capture, enhanced carbon mineralization) and durably store it in natural reservoirs or in products.” The GGS commits to using permanent CDR to help address air and marine GHG emissions from its national safety and security fleet operations.

It’s important to note that the top priority under the GGS is emission reduction. The role of CDR is to address residual emissions from government operations that can’t be avoided or reduced. As stated in Canada’s Carbon Management Strategy, Canada needs to scale up solutions that permanently remove emissions from the atmosphere, since some residual emissions are likely to remain despite aggressive mitigation efforts, including in agriculture, aviation and shipping. The removal of carbon dioxide from the atmosphere is also the only way to directly address historical emissions, which have accumulated in the atmosphere over centuries of industrial activity and continue to contribute to global temperature rise.

In October 2024, the President of the Treasury Board announced the Government of Canada’s commitment to purchase at least $10 million in CDR services by 2030 through the LCFPP. This investment will enable the government to lower its emissions, while supporting the development of these critical technologies and markets so they are available when we need them the most.

The Government of Canada is seeking industry input on their interest, capacity and ability to supply offset credits that have been generated from CDR projects that meet the government’s greening requirements. For more information, see the Industry Consultations and Solicitations section.

Program timelines and key milestones

Industry consultations and solicitationsa

Related links

• Greening Government Strategy
• Greening Government Fund
• Greening Initiatives
• Policy on Green Procurement
• 2030 Emissions Reduction Plan
• Canada’s climate plan
• Clean Fuel Regulations
• Clean Fuels Fund
• Canada’s Carbon Management Strategy
• Clean Economy Investment Tax Credits