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The federal government has rolled out $800-million for clean fuel projects, the first round of cash from a $1.5-billion fund launched by Ottawa in 2021 to help accelerate Canada’s plan to reduce greenhouse gas emissions in the fight against climate change.

Canada’s Clean Fuels Fund was launched with the aim of increasing the production of clean fuels such as hydrogen, renewable diesel and natural gas, cellulosic ethanol, synthetic fuels and sustainable aviation fuel. The idea is to help clean fuel project proponents address barriers to growth by taking the risk out of the capital investments required to build new facilities, or expand existing ones.

For now, the federal government is remaining mum on the details of who exactly gets how much cash, as it undertakes negotiations to finalize the terms of funding for each project.

Natural Resources Minister Jonathan Wilkinson said Monday that details of the projects will be released in the coming weeks, but added they include production facilities, as well as feasibility and front-end engineering and design studies. The projects span seven jurisdictions and cover five fuel types.

Funding decisions on the next round of projects will likely be finalized in December.

“Clean fuels are an essential part of the clean technology mix in a net-zero world,” he said at an event in Vancouver announcing the first round of project funding.

Canada’s goal is to reduce greenhouse gas emissions by 40 per cent to 45 per cent by 2030.

Global demand for fossil fuels will decline by 2050, with investment in clean energy growing, IEA says

Mr. Wilkinson said while the country is making “good progress,” it’s important to remain focused on putting plans into action.

“It’s all about implementation,” he said. “In the context of Canada, it’s about actually ensuring that we do the things that we said we were going to do.”

Hydrogen is a large part of the federal government’s clean fuels focus, as is Canada’s potential as a clean hydrogen producer and supplier to global markets.

Hydrogen is light, storable and energy-dense. Produced through natural gas or water, it produces no direct emissions of pollutants or greenhouse gases when used as a fuel, which has drawn the attention of countries targeting net-zero emissions.

“To governments and industries around the world in countries like Japan or South Korea or in Europe, hydrogen is absolutely a critical part of how they see the future,” Mr. Wilkinson said. “And to be honest with you, I don’t think there is likely a very simple pathway to net zero without hydrogen being part of the solution in some sectors.”

But the Clean Fuels Fund is broader than just hydrogen, he said.

The first round of projects also include a “significant chunk” of funding for projects and feasibility work in renewable natural gas, biodiesel, ethanol and sustainable aviation fuels.

Mr. Wilkinson also announced close to $9-million through two federal programs to help build 10 hydrogen and natural gas refuelling stations in British Columbia, Alberta and Ontario.

Transportation accounts for 25 per cent of total greenhouse gas emissions in Canada. The federal government will ban the sale of new fuel-powered cars and light trucks from 2035 to help the country toward its goal of net zero by 2050 – a move that Mr. Wilkinson said will drive the adoption of electric and hydrogen vehicles.

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