Canada: Scaling clean hydrogen for more than just fuel cells

The “Cambrian explosion” of interest in hydrogen in recent years has reached the Canadian shores where the modern fuel cell industry was born. Long home to a vibrant hydrogen and fuel cell sector – which even in 2017 posted revenues above $200m – Canada’s national and sub-national governments have built policy pillars to raise it to new heights.

Federal Policies

In December 2020 the Canadian Government issued its Hydrogen Strategy for Canada, establishing that hydrogen could provide up to 30% of final energy consumption in a Net Zero Canada by the year 2050. This is similar to the UK Hydrogen Strategy estimate that hydrogen could provide 20%-35% of UK final energy consumption by 2050. In the same month Canada announced a Clean Fuel Standard to progressively reduce the emissions intensity of liquid fuels used across the country. It drew from California’s successful Low Carbon Fuel Standard, for which the credit price is currently in the $170/tonne CO2 range, or roughly $200/tonne CO2. By comparison Canada’s current carbon price is $40/tonne, with plans to raise it to $170/tonne by 2030.

An example of what University College London professor Mariana Mazzucato calls a market-creating regulation, the Clean Fuel Standard creates the conditions with which the country can build and scale its production of low-emissions hydrogen and other benign fuels.

To support the Clean Fuel Standard, the Government of Canada also announced a $1.5bn Clean Fuel Fund with a carve-out of at least ten hydrogen projects. With the interest the fund has attracted industry advocates hope for a follow-on program to help reduce emissions further, faster.

Three projects from the oil and gas-rich province of Alberta illustrate the emerging hydrogen landscape. With the province home to possibly the cheapest natural gas in North America, all involve “blue hydrogen”, or low-emissions hydrogen derived from methane reforming combined with carbon capture and sequestration. Two CO2 sequestration pipelines, the Alberta Carbon Trunk Line and Quest, are already in operation in the province.

In May oil/tar sands producer Suncor and energy utility ATCO announced plans to build a 300,000 tonne per year low-emissions hydrogen facility (800 tonne per day) near the former’s refineries. Most of the hydrogen would be used for refining and cogeneration, with a portion used to reduce the carbon intensity of Alberta’s gas grid. (ATCO, a combined gas-and-electricity utility, sees a need for zero-emission gas energy in the Alberta communities it serves.)

In June Air Products announced a $1.3bn Net Zero Hydrogen Energy Complex to produce 400 tonnes per day of blue hydrogen by 2024. The company designed an autothermal reforming process with 95% carbon capture, inviting a Canadian eNGO, the Pembina Institute, to perform an independent analysis. To make the project Net Zero, a portion of the hydrogen will be combusted for electricity to displace emissions from Alberta’s natural gas-dominated grid. A 30 tonne per day hydrogen liquefier is also planned, to supply the transportation sector.

And in August, Petronas and Itochu announced they would explore building a $1.7bn facility to produce hydrogen for “blue ammonia” for export, by 2027. At one million tonnes of ammonia per year, the facility would require roughly 500 tonnes per day of blue hydrogen.

For comparison, Alberta’s current hydrogen production – for the refining and petrochemical industries – is on the order of 5,000 tonnes per day. So the three projects would be the equivalent of 30% of current hydrogen production.

All three projects have been proposed for the Edmonton region, which is moving forward with Canada’s first hydrogen hub. A detailed census of energy suppliers and consumers in the region was recently completed by the Transition Accelerator, a heavy duty vehicle trial will soon begin, and hub development is moving swiftly.

But Canada’s story isn’t limited to Alberta; other provinces are racing forward as well.

British Columbia

Home to fuel cell pioneer Ballard Power Systems and a constellation of related start-ups, British Columbia has long been a leader on climate. The province introduced a revenue-neutral carbon tax in 2008 and ten years later its CleanBC climate legislation committed it to reducing greenhouse gas emissions 40% by 2030 from pre-carbon tax (2007) levels.

The CleanBC plan required that 15% of the gas energy delivered in British Columbia be provided by Renewable Gas. Hydrogen electrolysed with the province’s vast hydroelectric resources qualifies in the market-creating regulation.

The province commissioned the British Columbia Hydrogen Study in 2019 and became the first Canadian province to publish a strategy document with this year’s BC Hydrogen Strategy.

Given the signficantly higher challenges and costs of deploying plug-in electric vehicle infrastructure in these building types, British Columbia’s build-out of North America’s second largest light duty vehicle hydrogen refueling network is understandable. Eight public hydrogen stations are operating or in development, with an additional 10 stations to be built through a recent request for proposals.

Finally, with hydrogen fuel cells from British Columbia companies powering more than 4,500 heavy-duty vehicles worldwide, plans are also in development to deploy the technology at home.

Quebec

The fourth largest hydroelectric power producer in the world, Canada’s francophone province of Quebec has moved to leverage its clean electricity to aggressively decarboniae its own economy. The recently completed 20MW electrolyzer in Becancour – for now the largest PEM electrolyser in the world – is producing hydrogen for industrial and emerging transportation uses.

Electrolyser deployments in the 100’s of MW have also been proposed by 2025 with the green hydrogen production allotted for natural gas blending, biofuels and transportation. One example is the Varenees Carbon Recycling plant, which will divert municipal waste from landfills with hydrogen from an 88MW electrolyser to produce biofuels and industrial chemicals.

The Quebec government has dedicated $15m to develop a green hydrogen sector in the province, and the Quebec Strategy for Green Hydrogen and Bioenergy is expected by year’s end. Buoyed by the government’s green industrial policy, trade association Hydrogene Quebec (a branch of the Canadian Hydrogen and Fuel Cell Association) has also shown rapid growth.

Their hydrogen policies sliding into place and projects following close behind, Canada and its provinces are poised to surf the wave of renewed interest in hydrogen and its related climate solutions. With effort and advocacy, early successes will inspire still stronger policies and faster deployments, leading to a bigger hydrogen sector, and more vigorous greenhouse gas reductions.