By Marc Lagace, Managing Editor
This past year, we have all witnessed how volatile global oil and gas markets have become, caused in part by ongoing geopolitical uncertainties and the rise of inflation practically everywhere.
As a result, Canadians are seeing a sharp increase in diesel prices at the pump, which has affected the cost of everyday consumer goods and caused financial stress for wide swaths of Canadian industries reliant on diesel-powered vehicles, including and especially the transportation logistics and agricultural sectors.
Future-proofing your bottom line has never been more important, as we attempt to navigate and find stability in a time of unending volatility. Finding ways to reduce fuel costs and future reliance on diesel, in particular, has become an urgent issue that businesses must address in the coming years.
Compressed natural gas (CNG) has proven to be a reliable fuel alternative that is well-suited for return-to-base fleets operating medium and heavy-duty trucks, providing diesel-equivalent power output while reducing greenhouse gas emissions and also lowering fueling costs. The cost of repowering fleets to run on CNG is comparable to that of traditional diesel engines, and considerably less expensive than adopting full-electric or hydrogen-cell alternatives. The financial and environmental benefits of converting fleets to natural gas can be further compounded by seeking out sources of renewable natural gas (RNG) which can provide a safe, independent, and scalable supply of fuel for fleets.
Natural gas trucks are able to displace the equivalent CO2 emissions from a diesel-powered truck. If the source of the fuel is RNG, the truck may qualify as carbon-negative, due to the lowered tailpipe carbon emissions coupled with the diversion of greenhouse gases from the atmosphere during the production of RNG.
Another incentive for fleets considering RNG as an alternative fuel is that RNG is exempt from Canada’s carbon pricing scheme and most provincial road taxes. Anyone involved in the Canadian trucking industry is well aware of the carbon tax and its effect on rising fuel prices in our country. By switching to RNG, fleet operators should see immediate savings for refueling costs, which can result in significant year-over-year improvements to a company’s bottom line.
In recent years, there have been several successful pilot projects in Southern Ontario that have highlighted the different ways RNG can be used to fuel fleets of all sorts. In 2021, the City of Hamilton introduced Ontario’s first carbon-negative articulated transit bus that would be fueled exclusively with RNG through a partnership with a local supplier. This built on the transit utility’s existing partnership with Enbridge Gas Inc. to reduce carbon emissions by converting its bus fleet to run on CNG. Finding a way to source RNG for the fleet was the logical next step to achieve net-zero emissions.
In August 2022, The Ontario Waste Management Association and Bluewater Recycling Association partnered with Enbridge Gas Inc. to roll out Ontario’s first refuse-collecting truck in London, ON, which would be fueled by RNG produced mainly from cow manure collected from a local dairy farm. The RNG truck was expected to displace the equivalent CO2 emissions of 18,000 litres of diesel in its the first six months, and there is just something poetic about a waste-collecting truck that runs on repurposed waste.
These types of stories show how centralized fleets can use RNG today to help meet their environmental goals for the future and begin the transition away from diesel entirely. Once a local RNG supply chain is developed and fueling partnerships secured, it is a net-positive for fleets who receive a clean and reliable source of fuel, and for the surrounding communities that will see the environmental benefits of less greenhouse gas emitted into the atmosphere.
With the ongoing effects of climate change being felt around the globe and increasingly severe weather events becoming the new reality for many communities in North America and beyond, the time for serious actions to be taken was yesterday. Even so, it is still vitally important for all industries, including transportation and logistics, to make important investments into greener technologies so that we can reduce the environmental impacts, keep our economy strong, and help Canada achieve its climate targets by 2050.
Now is the time for Canadian companies operating medium and heavy-duty fleets to assess how they can modernize their vehicles to take advantage of new advancements and technologies. To achieve decarbonization within the transportation industry, investments can be made to retrofit or purchase fleet vehicles already maximizing carbon emission reduction and begin transitioning away from industry reliance on fossil fuels by exploring new opportunities to pursue greener, more cost-effective fuel alternatives.
Green Freight Program is open for applications
As part of Budget 2022, the federal government has earmarked almost $200 million in funding for Natural Resources Canada (NRCAN) to expand the Green Freight Assessment Program, now shortened to just the Green Freight Program, to make more funding available for Canadian business looking to decarbonize vehicles currently on “the road and invest in new, greener vehicles to replace aging fleets.
The program offers two streams of funding focused on identifying opportunities for improvement and providing financial assistance for qualifying projects:
Stream 1 provides grants for third-party fleet energy assessments and funding for retrofitting projects available for Class 3 to 8 trucks and/or trailers to run more efficiently and is currently open for applications. This stream aims to increase knowledge and provide financial support for members of the freight transport sector who are investing in new solutions for improving fleet energy efficiency through retrofits to enhance aerodynamics, anti-idling, and auxiliary power units.
Stream 2 is launching in Spring 2023, with successful applicants able to receive up to 50% cost-share funding, up to a maximum of $5 million, for fleets who have completed a fleet assessment and are looking to further act upon the recommended engine repower projects, or switch eligible fleet vehicles over to run cleaner fuels (such as RNG for natural gas trucks or diesel engines retrofitted to run on CNG), or for larger fleets who have completed fleet assessments and are looking to tackle complex, large-scale enhancements to follow best practice projects.
Stream 1 applicants who have completed a third-party fleet assessment will be best positioned to apply for Stream 2 when applications open. The funding window for Stream 2 will remain open for four years, until March 31, 2027, so there is plenty of time to apply for Stream 1 funding and receive assistance in covering the cost of fleet energy assessments, and then be better qualified to apply for Stream 2 funding. The program is designed to make transitioning away from diesel easier and to encourage adoption of greener technologies.
This federal program can also be stacked with complementary programs available in some provinces, such as Quebec Eco-Trucking, which provides funding to assist fleets operating in Quebec looking to switch over to CNG trucks.
More information about the Green Freight Program, including application requirements, can be found on the NRCAN website: www.nrcan.gc.ca/energy-efficiency/transportation-alternative-fuels/greening-freight-programs/green-freight-program/20893.
