As the U.S. treks on with efforts to establish its clean, competitive economy through Inflation Reduction Act (IRA) subsidies, Canada has recognized the race is on. To match the budget and clean energy targets of its southern neighbor, Canada has concluded annual investments of $100 billion are necessary to achieve net-zero emissions targets by 2050.
In 2022, with ambitious federal targets to decarbonize the transportation sector, Canada allocated nearly $1 billion to two zero-emission vehicle incentive programs, the Natural Resources Canada Zero Emission Vehicle Infrastructure (ZEVIP) and the Transport Canada Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Programs. These funding opportunities were met with high popularity, calling for Canada to expand its clean energy investment with yet another landmark program, the Green Freight Program (GFP).
This $200 million initiative builds on the ZEVIP and iMHZEV programs, which saw such profound demand from medium- and heavy-duty fleets that the Government of Canada recapitalized low-and zero-emission transportation investments for five years in its 2022 budget. GFP funds near-zero emission vehicles to encourage cleaner vehicle adoption in the freight industry, which requires higher payloads that cannot always be hauled by battery-electric vehicles.
GFP’s Stream 2 launched this summer, and through November 16 of this year, it will offer non-repayable contributions, or grant awards, towards fuel switching, engine repowers, and purchases of low-carbon alternative fuel.
How Does a Fleet Get Started?
Fleet managers looking to reduce vehicle emissions must first complete a fleet energy assessment. GFP makes this prerequisite easy by funding up to $250,000 per applicant for such assessments. Fleet managers must also commit to using at least 40% renewable or non-fossil fuels through 2027. To get started, access the GFP website to access information on how to apply. For any questions regarding the program or the application process, contact freightassessment-evaluationdeflotte@nrcan-rncan.gc.ca.
How Much Money Can Fleets Receive?
Fleets must determine the incremental cost of the new vehicle relative to a standard diesel truck. Applicants are eligible to claim a maximum of 50% of their eligible incremental project costs (i.e., capital expenses and professional services) up to $5 million.
Are There Any Exceptions?
This program is only open to Class 2B through Class 8 trucks and will not accept pickup trucks, transit buses, or off-road vehicles. GFP is designed to complement iMHZEV and will not fund battery-electric vehicles, plug-in hybrid vehicles, or fuel cell electric vehicles.
Why Now?
Nearly 25% of all greenhouse gas (GHG) emissions in Canada originate from the transportation sector. Medium- and heavy-duty vehicles present a significant source of effluence that negatively impacts Canadian air quality. Consequently, Canadians face “greater risk of respiratory and cardiovascular problems and certain types of cancers as temperatures rise and exacerbate air pollution,” according to Environment and Climate Change Canada.
Freight transportation in Canada accounts for 5% of overall emissions alone, generating negative air quality impacts such as increased diesel particulate matter, lower visibility, and elevated nitrous oxide levels (a precursor to ozone) within surrounding communities. These disparities escalate the susceptibility of Canadian citizens to develop cardiovascular and respiratory diseases, while also jeopardizing habitat for native plants and animals. Increasing awareness of these environmental issues will assist fleets with considering the human and environmental toll of their diesel vehicles that discharge toxic emissions to spur the transition to low-emission alternatives and improve Canada’s air quality.
What Are the Next Steps?
The GFP is well-timed, given Canada’s summer of wildfires that pervaded the country and demonstrated the disastrous effects of climate change on the environment. Thus, the GFP is a call to action for fleet managers from coast to coast to consider leveraging this multimillion-dollar opportunity to decarbonize.
Could your firm, agency, or organization use some help navigating the incentives, regulations, and policies coming to your fleet due to these new policies?
GNA, North America’s leading clean transportation and energy consulting firm, is here to help. Reach out if you would like to strategize around environmental justice and clean transportation. Here’s to a season full of transformational clean transportation — and human – investment.
