Can Canada Overcome Diesel Dependence in Remote and Northern Indigenous Communities?

Canada shifts to clean energy to reduce greenhouse gas emissions and combat climate change, but remote and northern communities face some of our most pressing challenges.

Over 170 predominantly Indigenous communities rely on diesel for both heat and electricity. Canada’s on-grid electricity is mostly sourced from low-emitting sources. Yet, off-grid communities depend on costly, carbon-intensive systems that impact economic development, environmental stewardship, and energy independence.

For more in-depth information, check out the full article, Overcoming Diesel Dependence and Supporting Clean Energy Transitions in Remote and Northern Indigenous Communities in Canada, by Lark Scientific Researcher, Lucas Bettle.

High Costs of Diesel Dependence in Canada

Canada’s 280 total off-grid communities consume 682 million litres of diesel annually, especially in northern communities.

• About 75% of those communities are Indigenous. 

• About 70% of off-grid communities rely on diesel. 

• The rest mostly use other fossil fuels and hydroelectric systems.

  
  

This diesel dependence has negative impacts.

Transporting fuel is logistically complex and costly, using bulk shipments in the summer or trucking over ice roads in the winter.

• So, energy costs in Nunavut can be more than 10X the Canadian average, which can worsen both energy and food insecurity. 

• Remote communities pay 6 to 10 times more for energy, even after $300-$400 million in annual subsidies.

• Plus, diesel impacts the environment and health because of fuel spills and air pollution. 

• Ultimately, limited power capacity constrains housing development and local economic activity.

  
  

Governance for Clean Energy Transitions

Outside governments, utilities, or organizations often lead clean energy projects in Indigenous communities. This leaves local governance structures sidelined. 

Challenges include:

• Extractive recognition: Indigenous rights acknowledged mainly to unlock subsidies, with few local benefits.

• Limited consultation: Communities engaged only after project plans are set.

• Unequal benefits: Profits flow to outside entities while locals see minimal returns.

• Capacity gaps: Few trained local energy champions or technical training opportunities hinder long-term project success.

  
  

Clean Energy Opportunities for Indigenous Communities in Canada

Indigenous-led clean energy projects in Canada show strong potential for long-term success when local leadership, cultural priorities, and community skills are central. 

Several renewable and alternative energy options are being explored:

• Small-scale hydro: Viable where water flow is steady, though northern variability and ecological risks remain.

• Biomass: Creates jobs using local feedstock but depends on a sustainable long-term fuel supply.

• Solar: Increasingly viable with lower costs and better batteries, though limited winter sunlight requires storage or backup generation.

  
  

Alternative fuels:

• Natural gas lowers emissions but demands infrastructure. 

• Hydrogen offers clean potential if produced renewably. 

• Methanol and dimethyl ether can power modified diesel engines with fewer pollutants.

  
  

Federal and provincial programs drive investment. Current key initiatives:

• Indigenous Loan Guarantee Corporation: $5B in loan guarantees for major projects.

• CERRC: Funding up to 90% of project costs for community-scale renewables.

• IODI: Training, mentorship, and project support for off-diesel transitions.

• Indigenous Leadership Fund: $180M for climate action by 2029.

  
  

Recent landmark projects highlight progress. These include a 200 MW solar farm by Montana First Nation in Alberta, Yukon’s largest Indigenous-led solar farm by First Kaska Utilities, and major solar initiatives by Ulkatcho and Vuntut Gwitchin First Nations.

Challenges remain, especially with diesel dependence and governance alignment. But these initiatives demonstrate that clean energy can improve community resilience, reduce emissions, and build sustainable futures.