The federal government says industries across Canada – from shipping to oil refining, heating and long-haul trucking – will have the opportunity to pivot to low-carbon hydrogen as the country works toward positioning itself as a global leader in hydrogen production.
The Hydrogen Strategy for Canada, released on Wednesday by Natural Resources Minister Seamus O’Regan, will work along with Ottawa’s other plans to reduce emissions, including the carbon tax and Clean Fuel Standard. Designed to spur investment, the strategy is underpinned by a $1.5-billion low-carbon fuels fund announced in last week’s climate change plan, with the hope that providing market certainty will draw the rest of the $5-billion to $7-billion needed to establish a hydrogen economy in Canada.
The federal Liberals say using hydrogen could help reduce annual emissions by up to 45 million metric tonnes a year by 2030.
Alberta has produced hydrogen for decades. Nearly half of it comes from the oil processing and petrochemical region just north of Edmonton in Sturgeon County.
“We know how to do this, because we’re already doing it,” Sturgeon County Mayor Alanna Hnatiw said on Wednesday.
“The faster that Alberta and Canada can get into the game, the sooner we will achieve a secure, competitive future for our economy. And that makes our natural resources and environment more sustainable than ever before,” she said.
Alberta already has its own plan to build a hydrogen sector to heal some of the economic damage wrought by low oil prices and reduced demand owing to the pandemic.
Provincial Energy Minister Sonya Savage said in a statement on Wednesday that the federal strategy “will rely on our industry’s experience and expertise in natural resource production and emissions reduction technology.”
Mr. O’Regan stressed on Wednesday that each region of Canada has resources to make hydrogen and use it for local industries, be it hydrogen-powered equipment at a sea port or long-haul trucks powered by fuel cells. Production can also take advantage of regional assets. Hydro-powered electrolyzers could be used in Quebec or Manitoba to produce renewable (or “green”) hydrogen, for example, or natural gas and carbon-capture technology can be combined to produce so-called blue hydrogen in British Columbia or Saskatchewan.
Mr. O’Regan said Ottawa does not have a preference for either kind of hydrogen.
“I’m not going to choose amongst my children. I would make the argument that what matters here is lowering emissions,” he said.
The Transition Accelerator, a climate-focused non-profit pushing for the development of a hydrogen economy in Alberta, consulted on the federal hydrogen strategy. Its chief executive officer, Dan Wicklum, told The Globe and Mail the plan is a rare instance where all parts of Canada could benefit economically from the move to reduce emissions to net-zero by 2050.
The strategy signals Canada’s resolve and leadership on hydrogen, he said, which will likely help attract investment. But how that money is invested is as important as how much it is, and where it comes from.
“When you’re trying to get a hydrogen economy to self-sufficiency, the reality is that there are places across the country that will be more or less easy to do that,” he said.
“For us, it’s a competitiveness play. I think that’s what the industry is going to be thinking about very carefully. It’s not just, ‘What’s our domestic policy,’ but, ‘What do we have to do in order to remain competitive and to win in this very quickly changing world?’ ”
Julia Levin of Environmental Defense called the strategy a missed opportunity to make Canada a global leader in renewable hydrogen.
“Not only does the strategy focus on promoting fossil-derived hydrogen, but the government has also committed to more huge handouts for the oil and gas sector.”
Federal Environment Minister Jonathan Wilkinson rejected that argument, saying investments in hydrogen are aimed at reducing emissions, and don’t amount to fossil fuel subsidies.
“This is about actually enabling our economy to decarbonize. It’s about enabling Canada to meet its climate commitments. It’s about enabling Canada to be competitive in a lower-carbon world,” he said on Wednesday.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.