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Hydrogen can help nations meet their carbon dioxide reduction goals as the fuel can be used in manufacturing, shipping and mass transportation where it can be more difficult to use battery technology.AFP/Getty Images

On the breezy eastern shores of the island of Newfoundland, there are wind turbines generating electricity. Soon, the western region will also be home to turbines churning to make hydrogen gas.

World Energy GH2 Inc., an affiliate of Boston-based World Energy LLC, has secured the land for the initial phases of the project and landed several rounds of funding to build three wind farms and a hydrogen processing plant in and around Stephenville, N.L., 750 kilometres west of St. John’s.

The hydrogen will be converted into ammonia and shipped overseas for the likes of retrofitted coal plants, or sold to local businesses, such as manufacturers trying to move away from fossil fuels. The company claims it will be the first commercial green hydrogen/ammonia producer in the country.

“Things are moving quickly,” says Sean Leet, managing director and chief executive officer of World Energy GH2, which has plans to generate hydrogen by 2025, ramping up to produce 250,000 tonnes a year.

The low-carbon promise

Hydrogen gas gets talked about a lot these days because it’s a clean alternative to natural gas. When burned as a fuel or used in a fuel cell, or used when it’s been converted to ammonia, it emits no carbon-dioxide gas, often just producing water as a byproduct.

Hydrogen is abundant on Earth, but as a compound combined with other elements. To be used as a fuel, it needs to be separated out. This requires some energy, and the current processes we have rely on electricity or natural gas. In the case of the latter, to reduce the greenhouse-gas contribution, companies increasingly capture and store the carbon.

Hydrogen can help countries meet their CO2 reduction goals – Canada has committed to be net zero by 2050. The federal government released its Hydrogen Strategy for Canada in 2020, vowing that the country would be a global leader in renewable fuels, and this year’s budget promised an estimated $17-billion over five years in hydrogen tax credits.

“You need both clean electricity and hydrogen to get to net zero,” says Matthew Klippenstein, regional director for Western Canada for the Canadian Hydrogen and Fuel Cell Association, and executive director at Hydrogen BC. While clean electricity can satisfy the majority of an economy’s energy needs, some uses need a gas. “You don’t get to net zero without a whole bunch of hydrogen,” he reaffirms. Energy-analysis firm BloombergNEF estimates hydrogen could meet up to 25 per cent of the world’s energy needs by 2050.

As talk has moved from carbon reduction to a dire need to eliminate it, hydrogen – which we’ve known how to make safely and effectively for decades – has become a priority. Canada is already a top 10 producer of hydrogen globally, but demand is soaring.

“Canada’s got a massive opportunity to be a first mover in hydrogen and satisfy a significant amount of the demand for this energy,” Mr. Leet says.

But there’s a risk of falling behind. “Now is an urgent time in the industry, there are a lot of other countries who’ve had a lot more lead time,” says Janet Howard, partner and regional leader of the global energy and climate group at law firm Fasken.

Who uses hydrogen?

According to Mr. Klippenstein, hydrogen can generate the high temperatures needed in heavy manufacturing and can help make the feedstock used to produce chemicals – the chemical industry is a huge user of fossil fuels and is attempting to change that.

“We believe the shipping industry will be an early adopter,” says Mr. Leet, who says his company will target deep-sea shipping, as ports around the world retrofit to support the transition to hydrogen.

Mr. Klippenstein says hydrogen suits heavy ships and vehicles. “Batteries are fantastic for cars. But with a big carrier, you end up with a massive, honking battery,” he says. Meanwhile, electric batteries become less efficient in the cold – he says Edmonton Transit Service’s electric buses saw 23-per-cent range reduction in winter, hence its piloting the use of a hydrogen fuel cell-powered bus.

As well, Mr. Klippenstein says Canada often generates a surplus of electricity. “We’re landlocked with our renewables. So instead of just sending some excess electricity along the wires to the States, we can package that energy up as hydrogen or ammonia and ship it to Korea, Japan or Germany,” he explains.

Cross-country projects

Canada is already a hydrogen player, with world-leading fuel-cell manufacturer Ballard Power Systems based in Vancouver. HTEC, also of Vancouver, which specializes in hydrogen-powered transportation and has plans to build production facilities, is leveraging $16.5-million from the province to buy, refuel and service six heavy-duty trucks powered by hydrogen fuel cells.

Meanwhile, World Energy GH2′s operation is just one of many projects in Atlantic Canada, including Nova Scotia’s EverWind Fuels, which earned a recent $125-million federal loan to help build its green-energy hub.

Multinational industrial gas company Air Products is building a $1.6-billion facility in Edmonton that will produce 35 tonnes of liquid hydrogen a day to be transported in existing pipelines. TESCanada H2 of Montreal recently announced a Quebec plant that will generate 70,000 tonnes annually of hydrogen from wind and solar power when it opens in 2028.

Pressure stateside

As of 2022, the U.S. government has offered a production tax credit worth up to US$3 per kilogram of hydrogen produced via low-carbon means. Also, the United States will invest billions in as many as 10 hydrogen hubs across the country.

“A hub strategy is sensible,” Ms. Howard says, noting that Canada is developing de facto hubs, but south-of-the-border firms will get more of a boost. “They’ll be able to get access to capital and actually build these projects far quicker.”

Limited funding and red tape could hamper the industry and relegate Canadian companies to providing production components and expertise, similar to how the auto industry works. “The jury’s still out if this is how it will play out,” she says, and whether this is a potential problem.

A limited supply chain and lack of expertise in the industry, meanwhile, could add to the challenges, Ms. Howard adds.

Mr. Leet predicts a global undersupply of hydrogen over the next five to 10 years, with Canadian companies poised to benefit if they can get to market. “We’re impressed with the speed the federal government and our provincial government have moved to adapt,” he says. “In saying that, we still need to move faster.

Editor’s note: A previous version of this story stated incorrectly there are several wind farms on the western shores of Newfoundland. Existing wind farms are on the eastern shores. This version has been updated.

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