Natural Resources Canada has opened a second funding stream under its Green Freight Program to help offset the costs of engine repowers and shifts to low-carbon fuels.

Funding will cover up to 50% of the costs – up to $5 million per company — to repower existing equipment and convert it to run on low-carbon diesel alternatives. Fleets can also earn up to half the incremental costs of new trucks that run on low-carbon fuels.

Any repowers must be permanent. Eligible projects include replacing the engine or drivetrain, adding kits, or introducing dual-fuel options.

Fleets that purchase new trucks that run on low-carbon fuels need to commit to using a minimum average of 40% renewable or non-fossil fuels until March 2027.

Applications will be accepted until Nov. 16.

“In the transportation sector, which accounts for one-quarter of Canada’s emissions, the Government of Canada is continuing to help businesses reduce their emissions,” Energy and Natural Resources Minister Jonathan Wilkinson said in a press release.

“Applications for the second stream of this program are now open for 90 days, bringing us one step closer to a healthier environment and more prosperous economy for all Canadians.”

“The future of our roads is a greener, cleaner transport sector. Medium- and heavy-duty vehicles are a key contributor to pollution in Canada, and today’s announcement is great news to support fleets across the country in making the switch to cleaner choices,” added Transport Minister Pablo Rodriguez.

The federal government is investing $199.6 million over five years for the new Green Freight Program, which follows the Green Freight Assessment Program.

Where feasible, medium- and heavy-duty vehicles sold in Canada will need to be zero-emission models by 2040.