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Merran Smith is the executive director and Sarah Petrevan is the policy director of Clean Energy Canada, a program at Simon Fraser University’s Centre for Dialogue.

Hydrogen as an energy source is hardly new. After all, it was hydrogen that fuelled the first internal combustion engines. But there are plenty of innovations changing how it’s created and how it will be used in the coming decades – and that’s getting people talking.

The International Energy Agency cited a “growing international consensus that clean hydrogen will play a key role in the world’s transition to a sustainable energy future.” Research service BloombergNEF, meanwhile, estimates that clean hydrogen could meet up to nearly a quarter of the world’s energy demand by 2050. And a Bank of America analyst even compared the investment opportunity in the sector to that of smartphones before 2007.

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The reason for these excited forecasts? Hydrogen has a number of unique advantages as a climate solution, particularly in sectors that are the most difficult to decarbonize and where alternatives are limited. These areas are often referred to as the “toughest third” of emissions: trucking, shipping and the production of steel, fertilizer and cement.

The inflection point in hydrogen is now upon Canadians. The Alberta government unveiled a natural gas vision plan last week, calling for significant growth in hydrogen, which would help in “creating jobs, generating government revenue and contributing clean fuel to the global economy.” The federal government is expected to release its own national hydrogen strategy this fall. The paths laid out will decide whether Canada’s hydrogen sector grows and succeeds, or withers and disappears.

But a good strategy will hinge on whether it acknowledges this core truth: Not all hydrogen is created equal.

While previous estimates found Canada to already be a top-10 global hydrogen producer, supplying some three-million tonnes annually for industrial use, most of this hydrogen is made using fossil fuels. In other words, it’s still part of the climate problem.

That doesn’t need to be the case. By capturing and storing this carbon pollution, “blue hydrogen" – which is low carbon but generated using non-renewable energy sources – can be produced. Given Western Canada’s hydrocarbon endowment and experience with carbon capture and storage, blue hydrogen has been described as a potential lifeline for the struggling oil and gas sector.

While current blue hydrogen is indeed a significant improvement over conventional hydrogen from a climate perspective, and while it can play a role in helping build out the hydrogen economy, a successful hydrogen vision for Canada must also plan for a future in which “cleaner” hydrogen could be outcompeted by the “cleanest.”

Today, that takes the form of green hydrogen, produced using renewable electricity and a process called electrolysis. In the future, green hydrogen could be in competition with hydrogen created through other innovative methods, such as the process being developed by Alberta-based Proton Technologies, which separates hydrogen from heavy oil underground, leaving the carbon behind.

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It remains to be seen how much cleaner blue hydrogen might become, but what is clear is that cost and cleanliness will dictate which jurisdictions' hydrogen sectors are best positioned to compete.

The good news is that, according to researchers at Harvard, Canada is among a small group of countries with the highest potential for exporting clean hydrogen, thanks to plenty of access to water (required for electrolysis) and a clean power system (82 per cent of Canada’s electricity grid is already non-emitting, while Alberta has strong solar and wind potential).

The time to act is now. Already, 18 economies comprising more than 75 per cent of global GDP are developing and rolling out their hydrogen strategies. Some, such as the European Union and South Korea, have dedicated post-pandemic recovery funds to make it happen. Not unlike its contribution to wind power in the 1990s and 2000s, Germany’s priming of the hydrogen market with a €9-billion strategy could lead to a snowballing competitive landscape – and cheaper clean hydrogen.

If Canada is to succeed in the global hydrogen economy, we must harness our competitive advantages right now, with a plan to produce, use and export the world’s cleanest hydrogen and its related technologies. A $1-billion federal fund over five years could be invested in strategic regional hubs that leverage local expertise, supporting research and development and, critically, deployment.

Hydrogen offers Canada an opportunity to sustain its role as an energy leader while cementing a role as a climate one. It offers new economic opportunities, both at home and abroad, both as a commodity and a technology play. And, critically, hydrogen can help Canada achieve net-zero emissions by 2050.

But success is not a foregone conclusion. And the race is already afoot.

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