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Hydrogen: What is it, and what is the opportunity for Canada?

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CALGARY — Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed a deal this week to help kick-start a transatlantic hydrogen supply chain, with the first deliveries expected by 2025. Here’s a quick look at hydrogen and the opportunities it might hold:

What is hydrogen?

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The first element on the periodic table, hydrogen is the simplest and lightest element — approximately 14 times lighter than air. Hydrogen is abundant throughout the universe, however on earth it is rarely found in its natural state, meaning it must be extracted from other sources (typically water and methane).

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What is it used for?

Hydrogen can be used as a fuel in fuel-cell-powered electric vehicles, combusted to produce heat, or used in a range of chemical and industrial processes.

Is hydrogen a “clean” fuel?

Hydrogen is a clean-burning fuel, meaning it does not produce greenhouse gases, black carbon, particulates or ground-level ozone at the point of use. When used in an electrochemical fuel cell, like the kind that powers hydrogen vehicles, it emits only water and heat.

The carbon footprint of hydrogen production varies greatly, however. Hydrogen can be extracted from a variety of sources — including water and electricity, fossil fuels, biomass, and as a byproduct from industrial processes. From an environmental perspective, the goal is to use as many renewable or zero-emission sources as possible in the production of hydrogen.

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Canada has identified the domestic deployment of hydrogen as key to meeting its climate change commitments. It says in a best-case scenario, up to 30 per cent of Canada’s energy could be supplied by hydrogen by 2050, resulting in 190 million tonnes of greenhouse gas emission reductions per year.

What is the economic opportunity?

Canada is already one of the top 10 hydrogen producers in the world, with an estimated three million tonnes of hydrogen produced per year (mostly by the chemical and oil and gas sector from fossil fuels).

Because demand for hydrogen is increasing, with the global market expected to reach more than $2.5 trillion by 2050, many believe Canada could become a leading supplier. The country already has rich feedstock reserves, a skilled energy sector labour force, and access to strategic infrastructure assets including pipelines and deepwater ports.

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What are the challenges?

Many of the factors limiting hydrogen use today are economic rather than technological. While implementation of the federal Clean Fuel Standard will help to make hydrogen more cost-competitive compared to conventional fuel sources, experts say other forms of policy and fiscal support will be needed in the next five to 10 years to attract investment and help the industry achieve scale.

If domestic production and demand grows over time, dedicated infrastructure such as hydrogen pipelines and liquefaction plants will also be needed. Canada will be challenged with building these crucial assets in a co-ordinated and timely manner to ensure low-cost, clean hydrogen can be delivered to domestic and international markets.

Source: Natural Resources Canada

This report by The Canadian Press was first published Aug. 24, 2022.

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