How the OBPS Proceeds Fund supports industrial emissions reduction projects

By GrantHub Research Team · · Lire en français

How the OBPS Proceeds Fund supports industrial emissions reduction projects

Industrial facilities in Canada’s carbon pricing system often struggle with the high costs of cutting greenhouse gas (GHG) emissions. The Output-Based Pricing System Proceeds Fund (OBPS Proceeds Fund) helps by returning carbon pricing dollars to industry as funding for emissions‑reduction projects. The goal is to lower industrial emissions and keep Canadian facilities competitive.


What is the Output-Based Pricing System Proceeds Fund?

The OBPS Proceeds Fund is a federal program run by Environment and Climate Change Canada (ECCC). It gives back proceeds collected under the federal Output-Based Pricing System (OBPS) to projects that cut industrial GHG emissions.

Key features:

  • Funding comes from carbon pricing paid by OBPS‑regulated facilities
  • Support goes to industrial emissions reduction projects
  • Projects must show real, measurable, and provable GHG reductions
  • Funding is provided through application-based intakes

Facilities can use carbon pricing dollars to improve operations, not just pay compliance costs.


Who is eligible for OBPS Proceeds Fund support?

Eligibility depends on the federal OBPS.

You may qualify if your business:

  • Runs an industrial facility regulated under the federal OBPS
  • Is in a province or territory where the federal OBPS applies
  • Owns or controls the project site
  • Can measure expected GHG reductions with approved methods

Most eligible applicants are from industries like manufacturing, mining, oil and gas, chemicals, and other large operations.

Tools like GrantHub’s eligibility matcher quickly show if your facility and province are covered by the federal OBPS.


What types of industrial emissions reduction projects are funded?

The OBPS Proceeds Fund supports projects that cut emissions in the short and long term. While rules change by intake, common project types include:

  • Energy efficiency upgrades

    • Improving processes
    • Upgrading equipment
    • Adding waste heat recovery
  • Fuel switching and electrification

    • Using lower‑carbon fuels
    • Switching to electric equipment
  • Low‑carbon technology adoption

    • Installing advanced controls
    • Using new processes that cut emissions
  • GHG measurement and verification improvements

    • Better emissions tracking linked to reduction results

Projects must clearly reduce emissions at OBPS‑regulated facilities and fit the intake’s priorities.


How much funding can your project receive?

There is no single fixed amount for OBPS Proceeds Fund support. Funding depends on:

  • The intake stream
  • Eligible project costs
  • Expected GHG reductions
  • Proceeds available for your province or territory

Funding is usually a non‑repayable contribution. Each intake sets maximum limits, cost‑share ratios, and stacking rules in its official guide.

Always check the latest intake documents from ECCC, since funding details can change.


How the application process works

Each intake is a bit different, but most follow these steps:

  1. Intake announcement
    ECCC shares eligibility, deadlines, and application forms.

  2. Project development and emissions analysis
    Applicants estimate GHG reductions using approved methods.

  3. Application submission
    Submit technical, financial, and emissions documents.

  4. Assessment and selection
    Projects are ranked on emissions impact, feasibility, and value for money.

  5. Contribution agreement and reporting
    Successful applicants track progress and report results.

Because applications are technical, start preparing early.


Common Mistakes to Avoid

  • Applying without OBPS coverage
    Only facilities regulated under the federal OBPS are eligible. Provincial systems do not count.

  • Weak emissions reduction estimates
    Calculations must be defensible and follow federal methods.

  • Ignoring intake-specific rules
    Each intake has its own cost‑share rules and priorities.

  • Assuming funding is automatic
    The program is competitive and funding depends on available proceeds in your province or territory.


Frequently Asked Questions

Q: Is OBPS Proceeds Fund funding repayable?
No, funding is usually a non‑repayable contribution, but you must meet performance and reporting rules.

Q: Can OBPS Proceeds Fund money be combined with other grants?
Yes, you can stack funding, but total support cannot exceed set limits. These are in each intake’s guidelines.

Q: Are small projects eligible?
Project size does not decide eligibility. Projects must deliver meaningful GHG reductions for the cost and meet intake rules.

Q: How often are application intakes launched?
Intakes are announced from time to time, based on available proceeds. There is no set yearly schedule.

Q: Are feasibility studies funded?
Some intakes may allow early-stage or planning costs, but this changes. Always check the intake guide.

GrantHub tracks active federal and provincial grant programs, including climate and industrial funds, so you can match the right funding to your facility.


Next Steps

If your facility is under the federal OBPS, the OBPS Proceeds Fund can help pay for emissions reduction projects. Start by checking your OBPS status, then match your projects to the latest intake priorities. Using a central grants platform like GrantHub can help you find OBPS and other grants that fit your needs, so you can plan your funding strategy with less stress.

See also:

  • How to Plan Short-Term GHG Reductions for Federal Climate Programs
  • How to Improve Industrial Energy Management Using Government Programs
  • How to Fund Oil and Gas Emissions Reduction and Infrastructure Projects

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