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Hydrogen opportunities: Key findings

Development of an at-scale, clean hydrogen economy is a strategic priority for Canada, needed to diversify our future energy mix, generate economic benefits and achieve net-zero greenhouse gas emissions by 2050. This will require a radical transformation of Canada’s energy system. Canada has all the ingredients necessary to develop a competitive and sustainable hydrogen economy. The research and consultations that led to Canada’s Hydrogen Strategy highlighted how we can get there.

Key principles

In our research and consultations, the following cross-cutting themes emerged.

  • Momentum: The interest in hydrogen is growing throughout the world. Canada needs to act now to ensure we are not left behind.
  • Action: There are specific things we can focus on now, such as ensuring supply and demand grow at the same pace and creating hubs to bring multiple stakeholders, across value chains, together.
  • Signature projects: Increased focus can be brought to the creation and implementation of large-scale projects that could be highlighted and promoted internationally.
  • Domestic deployment: Canada needs a strong domestic hydrogen market to ensure it can take advantage of and seize opportunities internationally.
  • Low carbon intensity: As the market grows, so should our focus on ensuring that hydrogen is produced using methods that have the lowest environmental impact.
  • Head start: Canada has a burgeoning hydrogen industry that gives us a significant competitive advantage.

You can read more about how these themes will apply to different segments of the hydrogen value-chain below.

 

Production

Canada is rich in feedstocks such as water, electricity, fossil fuels and biomass. Coupled with our skilled labour force and our strategic energy assets, Canada is well positioned to become a top global producer of clean hydrogen. The scale of projected hydrogen demand requires development of all low-carbon intensity pathways across the country, and each region will have a unique mix of production based on local resources and economic factors.

Distribution and storage

Canada has many innovative ways to distribute and store hydrogen. Canada’s extensive natural gas pipeline network, combined with new storage and distribution assets, can be leveraged to move hydrogen from production to end-use locations.

To ensure we are ready to take full advantage of the many benefits of hydrogen, processes must be put in place to enable uptake of new technologies, accelerate pipeline blending, and increase the number of refueling stations from coast to coast.

Transportation

Increased infrastructure investments will incentivize the adoption of zero-emission vehicles, including a coordinated hydrogen refueling infrastructure investment plan, focused on regional hubs. High profile, medium- and heavy-duty fuel cell electric vehicle pilot projects will help raise awareness and best practices for pilot deployments of zero-emissions vehicles for goods and people movement in all sectors: on-road, rail, marine, and aviation.

Heat and power

To encourage the decarbonization of natural gas networks, the first steps would be to safely increase hydrogen blending into the natural gas grid and to develop a suite of public tools and resources to increase awareness and to help end-users evaluate hydrogen options. Blending low-carbon intensity hydrogen into Canada’s natural gas networks, for use in both industry and the built environment, provides the largest demand opportunity for hydrogen.

Feedstocks for industry

Hydrogen can be used as an energy source and feedstock in many industrial processes. For example, it is an essential component for oil sands upgrading and can be used to decarbonize steel manufacturing. Government needs to develop policies that will ensure long-term certainty to encourage private sector investment and innovation. There is opportunity in identifying synergies between hydrogen and other bio-based renewable fuels, as well as in creating a market for low-carbon products being used in domestic infrastructure.

Cleantech and innovation

Canada is a leader in hydrogen and fuel cell technologies. There is a need for sustained support for innovation across the value chain to ensure Canada maintains its competitive edge. Activities can be coordinated through regional research centres that leverage specific expertise and through fundamental collaborations between public- and private-sector researchers, domestically and internationally.

A growing opportunity

Hydrogen made through Canada’s clean and abundant resources and diverse pathways has the potential to deliver up to 30% of our end-use energy by 2050. This amount would abate up to 190-megatonnes (Mt) of carbon dioxide equivalent (CO2e) of greenhouse gas through hydrogen deployment in all sectors, from transportation to power generation to heating and to industrial applications.

With worldwide demand for hydrogen increasing, the global market could reach over $11 trillion by 2050. Each region of Canada can utilize their unique resources to produce and deploy hydrogen domestically as well as to supply a growing export market. Based on their existing country strategies, demand potential, and proximity, Europe, Asia, and the United States have been identified as potential export markets for Canadian clean hydrogen. Implementing the Hydrogen Strategy can spark early economic recovery, lead to a $50 billion domestic hydrogen sector, and generate more than 350,000 high paying jobs from coast to coast.

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