‘The potential is here if we skate to where the puck is going’: Feds release hydrogen strategy

A hydrogen charging station in the U.K.

The federal government on Wednesday unveiled its Hydrogen Strategy for Canada, a 104-page document that lays out the opportunities and benefits of building a hydrogen energy industry, though it is light on details about how to do it.

Hydrogen, the first element on the periodic table and the most abundant on earth, is a versatile energy carrier that emits zero carbon at the point of use. As a result, it is increasingly drawing interest as an alternative to natural gas, and for applications where electricity is not practical, as countries such as Canada seek to cut their emissions to comply with Paris Agreement targets set in 2016.

The hydrogen strategy document is mostly aspirational, with the government hoping to cut carbon emissions while also bolstering the economy.

The government said it hopes to help develop Canadian production and build distribution infrastructure over the next five years, while regulations such as clean fuel standards help encourage private investment. It also has said it can dip into its $1.5-billion Low Carbon and Zero Emissions Fuels Fund to help develop hydrogen energy projects.

“A $1.5-billion fund spread across all technologies, that’s not a large investment compared to other jurisdictions,” said Simon Dyer, deputy executive director at the Pembina Institute in Edmonton.

But he nonetheless applauded the strategy, because it makes clear that not all hydrogen is the same and that it supports an effort to define a clear carbon-intensity scale: Hydrogen energy can be created using coal and natural gas or, on the other end of the spectrum, wind, hydro and solar power, which have very different carbon profiles.

The government’s document notes that the European Commission is already creating a measurement system that takes into account the total greenhouse-gas emissions associated with hydrogen so that clean producers can be certified as such.

“It will be important for Canada to develop and adopt national definitions and standards for ‘clean’ hydrogen, whereby CI (carbon intensity) thresholds are established and can be independently certified,” the document states. “Hydrogen’s decarbonization benefits will only be realized if Canada adopts low CI hydrogen, and any government investment in the development of new supply in Canada needs to reflect this.”

The spectrum has led to different labels for hydrogen, with green being the lowest carbon-intensity, followed by blue and grey.

“It’s not simply as easy as saying green, blue, grey,” Dyer said. “We’re going to need rigorous carbon measures for every hydrogen stream.”

He said he expects intense competition for the $1.5-billion fund, which should ensure that only the best projects are funded.

At a news conference on Wednesday, Seamus O’Regan, Minister of Natural Resources, said he envisions hydrogen as a pathway in helping the country reduce its carbon emissions, while simultaneously bolstering the economy.

He cited a study that suggested hydrogen energy could grow into a global $11.7-trillion industry per year by 2050. It is currently estimated to be less than $2 billion per year, according to U.S.-based market data firm Grand View Research.

 Minister of Natural Resources Seamus O’Regan.

O’Regan said hydrogen has the potential to reduce Canada’s carbon emissions by 45 million metric tonnes a year by 2030, and could add 350,000 new jobs during the next three decades.

“This is the vision, and this is the plan that will get us there,” he said at a press conference, “a blueprint that provides certainty to all investors looking to get in on the ground floor of a potential game changer.”

Canada is already one of the world’s top 10 producers of hydrogen. Hydrogen is already used as a feedstock by oil refineries, in fertilizer and other industrial applications, and so there is considerable production in Alberta and other western provinces. Much of that hydrogen is considered blue or grey.

But there are also well-known companies such as Burnaby, B.C.-based Ballard Power Systems Inc., which designs and builds hydrogen fuel cells for buses, trucks and trains. Hydrogen fuel cells are considered suitable for heavy-duty vehicles because they have greater range than electric ones, and can also be considered net zero.

 Hydrogen fuel cells stand at the Ballard Power Systems Inc. facility in Burnaby, B.C.

Ballard chief executive Randy MacEwen, who was present at the government’s press conference, has said his company is riding a wave of investment in clean vehicles, including in China where it has formed partnerships. It has already produced more than 3,200 buses, and tens of thousands of forklifts and trains.

But hydrogen can also be used to heat and power buildings, as well as in a variety of other applications.

At the press conference, O’Regan said industries such as mining, steel, cement as well as remote communities that rely on diesel power could transition to hydrogen relatively easily.

“The potential is here if we skate to where the puck is going,” he said.

Financial Post

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