Details of Federal $675 Million Methane Emissions Reduction Fund

Last week, the Federal Government released the details of the long awaited $675 onshore methane emissions reduction fund. The fund will take the form of an interest free repayable contribution with a 5-year payback term. Producers can apply for up to $20 million and must get their applications in by the end of November to catch the first tranche of funding.

What is the real opportunity here?

Producers can finance emissions reduction projects, such as instrument gas to instrument air conversions (IG2IA) at existing wellsites. These projects can then earn carbon credits, offset carbon tax, and reduce op costs such as fuel gas expenses. If a producer chooses well, the projects can more than pay off the repayable contribution over the 5-year term. This creates opportunities for producers to profit significantly from emission reduction projects.

How does it work?

Funding can be used to cover 75% of the cost of methane reduction projects. Funding can go up to 90% when stacked with other programs such as the Clean Industry Fund (CIF) in BC or Methane Technology Implementation Program (MTIP) in Alberta. Up to half of the contribution is eligible to be converted to a non-repayable grant, depending on methane abatement costs of the project and if carbon credits are generated. The remaining contribution is paid back, interest free.

What does success look like?

Westgen is currently working with one Alberta-based Producer who has identified 57 locations where IG2IA projects will result in economic returns. The Producer will spend $1.4 million and receive $4 million in funding to complete the retrofits. This project will result in an average of $2.9 million per year in carbon credit revenue for the next 8 years (a total of $22 million in carbon credit revenue) and will reduce fuel gas expenses by $230,000 annually

How to apply?

More details and instructions on how to apply can be found on the NRCan website. Westgen has developed an IG2IA quantification methodology and can use a producers pneumatics data to provide an economic analysis outlining the opportunity to take advantage of the methane emissions reduction fund. To get started, contact us at

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