Hydrogen as part of Canada’s energy transition

As Canada navigates the clean energy transition, cleaner technologies and solutions are attracting attention. Hydrogen has made headlines globally as a vital component of future energy systems.

The clean-burning fuel does not produce carbon emissions upon consumption and so can replace fossil fuels in many sectors including heavy industry, transportation and heating. But its full potential for reducing emissions depends on how it is produced, which in turn is influenced by costs and technologies. Its future role in Canada’s energy transition is yet to be determined.

This media brief summarizes some of the existing information about hydrogen use in Canada, while identifying key uses, technologies and Canadian companies involved.

KEY FACTS

What is hydrogen?

  • Hydrogen is an energy carrier rather than an energy source. This means its potential role has similarities with that of electricity.

How and why is it currently produced?

  • Currently, the majority of hydrogen around the world is produced from fossil fuels (76% from natural gas, 23% from coal). This is known as grey and black hydrogen, respectively.
  • In some cases, hydrogen from fossil fuels is produced in conjunction with carbon capture and storage, meaning that the carbon pollution is captured during production and sequestered. This is known as blue hydrogen.
  • It can also be produced from electricity and water using a process called electrolysis. This method does not produce direct emissions but requires electricity. Hydrogen produced from renewable electricity (wind, solar, hydropower, tidal, etc.) is known as green hydrogen.
  • Hydrogen from other non-emitting sources—such as nuclear power—does not currently have an established colour designation.
  • Blue and green hydrogen are commonly referred to as “clean” hydrogen. Clean hydrogen currently makes up a small proportion of the total produced worldwide (less than 0.7%).
  • Canada ranks in the top 10 of global hydrogen producers and produces some 3 million tonnes of hydrogen annually for industrial use—approximately 4% of the global total (69 million tonnes per year).
  • Most hydrogen in Canada is produced by the chemical industry from fossil fuels (53%) and the oil and gas sector (47%). Geographically, most hydrogen* is produced in Western Canada (76%), followed by Central Canada (17%) and Atlantic Canada (7%).
  • Only 0.01% of hydrogen produced globally is currently used in hydrogen-powered vehicles.

What is its potential?

  • Black and grey hydrogen are not climate solutions as the emissions released during the production process will impede decarbonization efforts.
  • Clean hydrogen’s carbon-cutting potential is large however, particularly in heavy-duty transportation and industry where decarbonization options are limited. Options include:
    • Transportation: Hydrogen can be used in fuel cells for personal vehicles, trucks, trains, ships, and aircraft. It has particular benefits for heavy-duty transportation, with hydrogen fuel cells providing advantages over other zero-emission technologies—like battery electric vehicles—for longer journeys. Canadian hydrogen fuel cell technology is in use in hydrogen-powered trains in Germany.
    • Industry: Hydrogen has been flagged as a potential solution for industries like steel that require extremely high temperatures that are difficult to reach with other clean fuel sources. There is a pilot project underway in Sweden that is exploring this technique.
    • Heating: Many buildings use natural gas for heat, and a portion of that energy could come from hydrogen instead. Pilot projects are underway trialing hydrogen into the natural gas network (e.g. in Keele in the U.K.).

How much does it cost?

Hydrogen as a Canadian industry

  • In 2017, the Canadian hydrogen and fuel cell sector had revenues of $207 million and provided over 1,600 jobs in Canada. The majority (80%) of these jobs were in British Columbia, 13% in Ontario, and 7% elsewhere in Canada. The predominant market focus of the sector is applications for light-, medium- and heavy-duty vehicles, fuelling infrastructure, and hydrogen production. Companies include:
    • Ballard Power Systems in Burnaby, B.C., a developer and manufacturer of fuel cell products with US$106.3 million in revenue as of 2019, and some 700 jobs as of 2020.
    • Hydrogenics in Mississauga is a developer and manufacturer of hydrogen generation and fuel cell products with $34 million in sales revenue in 2018 and around 160 jobs as of 2017. It was acquired by major U.S. diesel engine manufacturer Cummins in the fall of 2019.
    • New Flyer in Winnipeg is North America’s largest manufacturer of transit buses and motor coaches. It has assembled fuel cell buses for demonstration projects.
    • Hydrogen Technology & Energy Corporation (HTEC) in North Vancouver is a developer and provider of hydrogen supply solutions, including fuelling infrastructure.
    • Renewable Hydrogen Canada (RH2C) in Sidney, B.C., plans to produce hydrogen from electrolysis using renewable electricity and has partnered with utility FortisBC.
    • Proton Technologies in Calgary, Alberta, hopes to develop a process for producing low-cost hydrogen by injecting oxygen into abandoned oil reservoirs to combust unswept oil, while leaving underground the emissions released during this reaction.

*While these data are dated, total production of 3.4 million tonnes of hydrogen in that year is comparable to annual production levels reported by Natural Resources Canada in 2019. Therefore, production by sector and region in 2004 likely still offers a useful indicator for more recent hydrogen production. Western Canada comprises British Columbia, Alberta, Saskatchewan, and Manitoba. Central Canada comprises Ontario and Quebec. Atlantic Canada comprises New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

SOURCE

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