Canada has been making significant strides in the realm of clean technology and clean energy investments. As one of the countries that has committed to achieving net zero emissions by 2050, enshrined in legislation since 2021, the nation has positioned itself as a global leader in clean tech innovation and sustainability.
Canada already ranks #2 on the Global Cleantech Innovation Index 2023 and is the 2nd most represented country in the Global Cleantech 100. Canada is the 3rd largest producer of Hydropower and prides itself on acquiring 66.6% of its electricity and 18.9% of its energy supply from renewable sources.
The country is also a recognized leader in hydrogen and fuel cell technologies, with about 90% of its tech exported, as well as holding an impressive 20% share of the world’s large-scale carbon capture, utilization, and storage projects.
Latest CleanTech and Clean Energy Government Investments in Canada
Since 2017, the Canadian government has invested more than $2.3 billion and earmarked billions more towards innovation, commercialization, and adoption of clean technology. This continuous flow of investment has fostered a vibrant environment of programs and services aimed at assisting cleantech entrepreneurs and adopters throughout the country. As of July 2023, Canada boasted a total of 2,427 pure-play cleantech companies. Among these, Ontario led with 852 firms, followed by British Columbia with 492, Quebec with 400, and Alberta with 391. These four provinces collectively constitute 88% of the country’s cleantech enterprises.
Let’s delve into some of the most recent cleantech and clean energy investments in Canada that are further spurring cleantech growth:
- $3.5 Million to Support the Growth of Clean Hydrogen in Owen Sound, Ontario
- September 2023: The Government of Canada announced a significant investment of over $3.5 million in Hydrogen Optimized Inc. (HOI) located in Owen Sound, Ontario, to boost the production of clean hydrogen. HOI, known for its groundbreaking RuggedCell™ technology, is set to accelerate its production capacity by fivefold, aided by this investment. This Canadian company produces green hydrogen using renewable energy sources and will support the decarbonization of major industries. This initiative is expected to create 50 high-skilled jobs and help HOI expand its presence in both domestic and international markets, contributing to Canada’s sustainability goals and economic growth.
- $175+ Million Investment in 12 Alberta Clean Energy Projects
- September 2023: Canada’s Minister of Energy and Natural Resources, unveiled funding for 12 projects in Alberta, aimed at generating and storing clean electricity while creating job opportunities. These projects play a pivotal role in Canada’s energy future and economic growth. Supported by the Smart Renewables and Electrification Pathways Program (SREPs), with a commitment of up to $4.5 billion by 2035, they will promote the shift from fossil fuels to smart renewable energy and storage, reducing greenhouse gas emissions and bolstering the transition to an electrified economy.
- Energy Innovation Program (EIP) Invests $5 Million in Medicine Hat’s Clear Horizon Project
- September 2023: Natural Resources Canada introduced Canada’s Carbon Management Strategy and allocated $5 million in funding from the Energy Innovation Program (EIP) to Medicine Hat’s (Alberta) Clear Horizon project. This financial support backs the Front-End Engineering and Design (FEED) study for carbon capture and storage (CCS) technology, aimed at emissions reduction. Project Clear Horizon, one of nine chosen from 96 submissions across Alberta, Saskatchewan, and Manitoba, focuses on capturing CO2 emissions from large sources and storing them underground to curb carbon emissions.
- $90 Million Infusion Into Eavor Technologies Inc. in Calgary
- October 2023: The Deputy Prime Minister and Finance Minister, introduced the inaugural investment from the Canada Growth Fund, with a $90 million infusion into Eavor Technologies Inc., a pioneering geothermal energy firm in Calgary. Eavor Technologies has developed the Eavor-Loop™, a groundbreaking scalable technology for closed-loop geothermal power and heat generation, harnessing geothermal energy to generate reliable, emission-free heat and electricity. This investment will enable Eavor to expand its emissions-reducing technology, maintain its Canadian headquarters and workforce, and generate new employment in Calgary.
- ARC Clean Technology Receives $7M Funding Award From Gov of Canada
- October 2023: ARC Clean Technology in Saint John, NB, has secured a $7 million funding grant from the Government of Canada’s Electricity Predevelopment Program. This funding will support the advancement of initiatives aimed at fostering the future expansion of a fleet of ARC-100 small modular reactors (SMRs). The ARC-100 is an advanced small modular reactor designed to generate 100 MW of clean energy for various electrical grid and industrial applications.
To view more current investments in clean energy in Canada, click here.
Startup Opportunities in CleanTech and Clean Energy in Canada
The future of Canada’s energy landscape presents a unique opportunity for startups in the clean energy and technology sectors. Key findings from Canada’s Energy Future 2023 report predict many pivotal prospects for startups to contribute to this important mission.
- Electrification of industries: Electricity is poised to become the predominant end-use energy source, accounting for 41% in the Global Net-zero Scenario and 39% in the Canada Net-zero Scenario by 2050, compared to just 17% in 2021. This shift towards electricity is driven by the adoption of electric vehicles, heat pumps, and the electrification of various industries.
- Hydrogen and Biofuel Alternatives: The emergence of hydrogen and biofuels as viable alternatives, particularly in heavy freight transportation, aviation, and industrial processes, presents promising avenues for innovation and investment. These changes are underpinned by a substantial reduction in fossil fuel use, with a 65% decrease in the Global Net-zero Scenario and a 56% decrease in the Canada Net-zero Scenario from 2021 to 2050.
- Decarbonization: By 2050, more than 99% of electricity is predicted to be generated from non- or low-emission technologies such as wind, nuclear power, hydro, natural gas with CCUS, bioenergy with carbon capture and storage (BECCS), and solar. Wind energy, in particular, sees exponential growth, with a ninefold increase from current levels, offering significant opportunities for startups, especially in provinces like Alberta, Saskatchewan, British Columbia, and Ontario. Hydroelectricity, already a substantial source of generation, continues to expand, while natural gas-fired generation with CCUS becomes pivotal, notably in Alberta and Saskatchewan. Nuclear generation, through small modular reactors (SMRs), is on the rise, with a strong presence in Ontario and other provinces. Solar generation steadily increases, accounting for 5% of total generation by 2050.
- Innovative tech: Emerging technologies are pivotal in Canada’s pursuit of net-zero emissions. These innovations include Carbon Capture, Utilization, and Storage (CCUS), hydrogen, negative emission tech, BECCS, direct air capture, and nature-based solutions present exciting startup opportunities in Canada’s clean energy and tech sectors.
Government Support for Startups Emerging in CleanTech and Clean Energy
Canada is actively driving clean innovation through various policies and investments. These include a commitment to achieving net-zero emissions by 2050, a carbon pricing system set to reach $170 per tonne of CO2 emissions by 2030, and over $100 billion in public investments for climate action. Clean technology is a central focus in promoting clean economic growth.
Canada’s 2023 federal budget allocated an additional $83 billion for clean electricity, cleantech, manufacturing tax credits, and strategic financing. Specific policies and regulations are as follows:
- Canada Growth Fund (CGF): A $15 billion public initiative to boost private investment in clean energy and cleantech.
- Strategic Innovation Fund (SIF): The 2023 budget allocated $500 million over a decade for cleantech, and directed up to $1.5 billion from SIF’s resources to sectors like clean technologies.
- Energy Innovation Program (EIP): Promotes clean energy tech for Canada’s climate goals and the shift to a low-carbon economy through research, development, and demonstration projects.
Cleantech Tax Credits:
- Clean Technology Investment Tax Credit: Offers a 30% refundable tax credit for investments in clean technologies.
- Clean Hydrogen Investment Tax Credit: Provides varying support levels for clean hydrogen projects, with a 15% tax credit for hydrogen-to-ammonia conversion equipment.
- CCUS Investment Tax Credit: Available for capital investments in various CCUS applications.
- Clean Growth Hub: A federal initiative assisting cleantech companies in accessing federal programs and services.
- Clean Technology Data Strategy (CTDS): Measures the impact of Canada’s cleantech sector and provides crucial data for policy and growth.
The Growth of the Private CleanTech and Energy Market in Canada
The Canadian cleantech market has experienced remarkable growth in private investment in recent years. Between 2018 and 2022, cleantech funding is estimated to have quadrupled. In 2022, Canadian cleantech saw significant venture capital (VC) investment, totalling CA $1.2 billion across 46 deals. This included CA $40 million in seed investment, CA $452 million in early-stage (Series A and B), and CA $621 million in late-stage VC investment. In 2022, the average deal size reached CA$26 million, the highest since 2018. In the first quarter of 2023, the sector attracted CA $174 million in investment across 21 deals, with an average deal value of CA $8.26 million.
Canada’s rich natural resources, supportive policies, and vibrant ecosystem of innovators and entrepreneurs position it as a global leader in clean technology and clean energy. As we move forward, it is vital to continue innovating, investing in and supporting cleantech initiatives to build a cleaner, greener, and more sustainable world.
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