Stream 2 of the federal Green Freight Program is now accepting applications for projects that include engine “repowers” and switching to cleaner fuels

The federal government has launched a request for proposals (RFP) under Stream 2 of its Green Freight Program, to help reduce the carbon footprint of medium and heavy-duty vehicle fleets (MHDVs) in Canada.

The current RFP is open to companies and a long list of other organizations with vehicle fleets ranging from Class 2B to Class 8. It covers up to 50 per cent of the total project costs, to a maximum of $5 million, but is limited to projects that focus on engine “repowers,” transitioning to low-carbon alternative fuels, and enhancing fleet transportation systems.

Vans, SUVs, pickup trucks, transit buses and off-road vehicles are not eligible.

“The future of our roads is a greener, cleaner transport sector. Medium- and heavy-duty vehicles are a key contributor to pollution in Canada, and [this] announcement is great news to support fleets across the country in making the switch to cleaner choices,” says Pablo Rodriguez, Minister of Transport in a press statement.

The Stream 2 RFP is the second round of funding offered under the Green Freight Program. It was launched in 2022 by Natural Resources Canada as an extension of the previous Green Freight Assessment Program, to encourage Canadian fleet operators to invest wisely in energy-efficient upgrades and transition to cleaner fuels for their MHDVs.

Overall, the program helps fleets reduce their fuel consumption and greenhouse gas emissions through fleet energy assessments, fleet retrofits, engine repowers, logistical best-practice implementation and the purchase of low-carbon vehicles. 

The initiative has a budget of $200 million spread over five years.

Program rules and eligibility

The Stream 2 RFP is open to companies, associations, Indigenous and community groups, academic institutions, and governments or their departments or agencies. Not-for-profit organizations, governments, their departments, agencies, and Indigenous businesses or community groups can request an increase in NRCan’s funding, up to 75 percent of the total project expenses.

The funding stream is divided into two types of eligible project activities.

Projects classified as “repowers” are those where the engine or drive train is replaced, and cases where additional kits are installed in the truck. Applicants must provide a list of the technologies or equipment involved in the project. These technologies must be permanent changes that can effectively cut down on diesel usage in MHDVs, while also decreasing GHG emissions.

The second category of projects that can receive funding involves purchasing vehicles that run on alternative fuel. To qualify, applicants must commit to using a minimum average of 40 per cent renewable or non-fossil fuels until March 2027.

The funding from the program will cover only the incremental costs of getting a new vehicle that uses cleaner fuels compared to purchasing a standard truck. To determine this extra cost, companies should provide a quote for the price of the diesel equivalent.

To be eligible for Stream 2 of the Green Freight Program, applicants must complete a fleet energy assessment report. The application window will remain open until November 16, 2023.

Government’s greener freight programs

NRCan launched the Green Freight Program’s Stream 1 RFP last December. The funding under Stream 1 was granted towards third-party energy assessments and fuel-saving retrofits.

Companies can receive funding for fleet energy assessments, covering up to half of the costs per company, with a maximum of $40,000. For equipment retrofits, the program has a list of approved technologies and will also cover up to 50 per cent of the costs per device, with a maximum of $250,000 per applicant.

Funding for Stream 1 is available on an ongoing basis until funding runs out.

NRCan has long been actively promoting better freight efficiency within Canada’s MDHV commercial fleets for years.

It says the Green Freight Program is a compliment to Transport Canada’s Incentive for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program, which assists businesses and communities transition to zero-emissions vehicles.

Carbon emissions from freight vehicles represent more than five per cent of Canada’s total carbon emissions.

NRCan has also helped fund Electric Autonomy’s EV Fleet Knowledge Hub, an online platform that provides all the tools and education necessary to help businesses transition their fleets to zero emissions.

The Government of Canada is working to ensure that 100 percent of medium- and heavy-duty vehicles sold in Canada will be ZEV by 2040.

More details on how to apply for the Green Freight Program can be found here.