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German Chancellor Olaf Scholz and Prime Minister Justin Trudeau take a walk during their bilateral meeting on the sidelines of the G7 summit at Castle Elmau in Kruen, near Garmisch-Partenkirchen, Germany, on June 27.Kerstin Joensson/AFP/Getty Images

Johanne Whitmore, Senior Researcher, Chair in Energy Sector Management, HEC Montréal, and Paul Martin, Chemical Engineer and Process Development Expert, co-founder of the Hydrogen Science Coalition.

With threats to natural gas supplies, German Chancellor Olaf Scholz is planning to visit Canada in August to discuss new Liquid Natural Gas (LNG) deals. To help allies transition away from Russian gas, Prime Minister Justin Trudeau stated at the G7 in June that Eastern Canada LNG infrastructures could be expanded on the basis “they could then be used for hydrogen exporting,” thereby “keeping it consistent with Canada’s longer term climate goals.”

However, how realistic is it to repurpose LNG infrastructure for hydrogen exports?

Hydrogen is not an energy source, but rather an energy carrier similar to a battery. Producing it is expensive and energy intensive. Renewable (or green) hydrogen, which can align with climate goals, is typically produced using renewable electricity. “Clean” fossil-based hydrogen, also known as blue hydrogen, is produced using fossil fuels coupled with Carbon Capture and Storage (CCS). Without CCS, a technology that is unproven economically at large-scale, fossil-based grey hydrogen is more polluting than using natural gas outright.

As academics and engineers with decades of experience in energy, we are concerned that Canada’s dash to build new LNG infrastructure in the hope of exporting hydrogen is not only scientifically baseless, but risks locking both Canada and Germany into a fossil-based economy. We explain why, below.

Hydrogen-ready LNG infrastructure doesn’t exist today - and is technically challenging

The perceived advantage of hydrogen is its resemblance to natural gas – it exists as liquid or gas, flows through pipes, stores in tanks and burns in engines. Switching one gas for the other seems logical. However, hydrogen-ready LNG terminals do not actually exist today because both gases have different properties which require different infrastructure. Repurposing existing infrastructure would require extensive retrofitting at great expense. New infrastructure will take years to build, which won’t help Europe meet near-term energy needs, or abate its emissions.

Exporting liquid hydrogen is also technically challenging, with huge energy losses incurred from production to end use (30 per cent, compared to LNG’s 8 per cent). Hydrogen should only be considered second to electrification and energy efficiency, which avoid intensive energy losses. The world’s first liquid hydrogen ship is also under investigation after a serious fire incident was reported, highlighting the challenges of safely developing an export industry. Taken together, these factors mean risking billions on a solution that is yet to be technically and economically proven.

Clean hydrogen isn’t guaranteed to reduce emissions

The Canadian government has committed to “clean hydrogen,” placing fossil hydrogen with CCS at the centre of its strategy. As CCS is unproven economically at large-scale, and fossil-based hydrogen is more polluting than using natural gas outright on a life-cycle basis, it cannot be considered “clean” by default. Canada’s Shell Quest project, currently one of the few large-scale fossil hydrogen with CCS projects globally, has emission capture rates of less than 50 per cent. That’s far short of the 90 per cent often promised by industry, and this is before factoring in emissions from energy used for CCS, harmful methane fugitive emissions, as well as hydrogen leaks whose warming potential are two to six times higher than previously thought.

The economics don’t stack up

Some view repurposing LNG infrastructure to hydrogen as a way to avoid stranded assets as we progress towards a net-zero economy. However, hydrogen production and export are not expected to be economically viable without huge public subsidies. Experts argue that shipping liquid hydrogen would be at least five times as expensive as LNG. As Europe’s energy crisis intensifies demand for North American LNG imports, this will only lead to higher gas prices and costs to consumers. A future tight market means fossil hydrogen with CCS won’t be a low-cost solution, even before the costs of scaling CCS are accounted for. By default, hydrogen will always be more expensive than the energy used to produce it.

Finally, the IPCC estimated that hydrogen would represent, at best, 2.1 per cent of total energy consumption in 2050. International Energy Agency Executive Director Fatih Birol is calling for Europe to focus on slashing gas demand. Promises of future hydrogen exports to justify significant LNG expansion only serve to distract from real cost-effective solutions. Directing investments and efforts towards energy efficiency, a circular economy and direct electrification is the fastest way for Europe to wean off Russian gas.

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