$25.8M in carbon cap and trade proceeds used for Ontario clean tech fund

Image of a low carbon Ontario by 2050

Proceeds from Ontario’s carbon market will fund an initiative aimed at boosting the development and commercialization of green technologies, according to the provincial government.

The Low Carbon Innovation Fund which will support technologies in areas such as alternative energy generation and conservation, new biofuels or bioproducts, transportation, and carbon capture and usage, will receive funding amounting to $25.8 million. The money will come from proceeds from Ontario’s carbon cap and trade program, according to Daiene Vernile, parliamentary assistant to Reza Moridi, minister of Research, Innovation, and Science.

Vernile said the initiative is part of Ontario’s Climate Change Action Plan.

“The Low Carbon Innovation Fund challenges local innovators to tackle greenhouse gas emissions – which is great for our province’s economy,” said Vernile. “Working together to develop creative solutions will help us fight climate change while preparing industries to thrive in a competitive, low-carbon economy.”

The fund includes two streams:

  • The Technology Demonstration stream will support the development and commercialization of innovative low carbon technologies through testing in real-world settings. Self-assessments and Expressions of Interest for the Technology Demonstrationstream are due September 22, 2017.
  • The Technology Validation stream will fund proof of concept or prototype projects from eligible Ontario companies or academic organizations. This earlier-stage funding is expected to seed game-changing technologies and help them get to market faster.  Applications for the Technology Validation stream will open in fall 2017.

Projects eligible for funding include new greenhouse gas (GHG) reduction technology that addresses a specific need, and projects that show a significant improvement to an existing GHG reduction technology solution.

The Climate Change Action Plan and carbon market form the backbone of Ontario’s strategy to cut greenhouse gas pollution to 15 per cent below 1990 levels by 2020, 37 per cent by 2030 and 80 per cent by 2050.

Under the cap and trade program, the government sells to companies, limited numbers of permits to discharge specific quantities of carbon for a period of time. Businesses that want to increase their emissions have to buy permits from others willing to sell them.

As of June this year, a total of 25,296,367 current (2017) allowances were sold at a settlement price of $18.72 and a total of 1,674,000 future (2020) greenhouse gas emission allowances were sold at a settlement price of $18.30.

The auction generated an estimated $504,182,190 in proceeds, which by law will be invested in programs that will reduce greenhouse gas pollution and help families and businesses reduce their own emissions through the Climate Change Action Plan.

“By investing proceeds from Ontario’s carbon market into innovative initiatives such as the Low Carbon Innovation Fund, our government is helping accelerate the growth of Ontario’s thriving clean tech sector,” according to Chris Ballard, minister of Environment and Climate Change. “This will ensure Ontario companies develop homegrown solutions to reduce greenhouse gas emissions and help the province transition to a prosperous, low-carbon economy.”

Proceeds from the province’s carbon market auctions are funding programs that help people and businesses across Ontario reduce pollution, including:

  • $50 million for improved cycling infrastructure in cities to reduce commuting trips in gasoline vehicles
  • $200 million to improve energy efficiency and lower GHG emissions in public schools by installing new, more efficient windows, lights and furnaces
  • $100 million to help homeowners reduce their energy bills and cut emissions in their homes through high-efficiency retrofits
  • $20 million to create a network of fast-charging electric vehicle stations across Ontario to make it easier to drive electric vehicles and reduce pollution
  • $92 million for energy efficient repairs and retrofits for social housing units and buildings
  • $100 million for small, medium and large-sized businesses to adopt leading-edge technologies, increase energy efficiency and reduce greenhouse gas emissions
  • $13 million to support economic growth in First Nations communities by reducing reliance on diesel fuel and provide them with the training, tools and infrastructure to address climate change.

“The Low Carbon Innovation Fund will help our innovators advance their concepts, create jobs and lead to a cleaner, healthier environment and a better quality of life for Ontario families and people around the world,” said Moridi.

According to the Ontario government, the province says it has the fastest growing clean tech sector in Canada, with $8 billion in revenue, 3,000 companies, and 65,000 employees.

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