Suncor, ATCO to develop clean hydrogen project

Canada's Suncor Energy will partner with utility ATCO Ltd. to develop a clean hydrogen project near Fort Saskatchewan in one of the most significant steps taken by an oilsands producer to cut greenhouse gas emissions.

Canada's cash-rich oilsands firms are facing mounting pressure to spend on transitioning toward cleaner energy at a time when Prime Minister Justin Trudeau has pledged to cut carbon emissions 45 per cent below 2005 levels by 2030.

Suncor and ATCO expect to make a sanctioning decision in 2024 and, if finalized, the project could be operational by 2028.

The hydrogen project would be the biggest in Canada and among the top quartile globally. It would produce more than 300,000 tonnes per year of clean hydrogen, and cut carbon emissions in Alberta by more than 2 million tonnes per year.

Canada emits 729 million tonnes of greenhouse gases annually.

The country already produces “grey” hydrogen using emissions-intensive industrial processes. The Fort Saskatchewan project would produce “blue” hydrogen, which uses the same process but captures and stores the resulting carbon dioxide.

“One of the opportunities for the journey to net zero for the country is to convert grey hydrogen to clean hydrogen,” Suncor chief executive Mark Little said in an interview.

Around 90 per cent of the emissions in the hydrogen production process would be captured, the companies said. Roughly 65 per cent of the produced hydrogen would be used in refining processes at the Suncor Edmonton refinery, while another 20 per cent could be used in the Alberta natural gas grid.

Suncor will construct and operate the hydrogen production and carbon sequestration facilities, while ATCO will construct and operate associated pipeline and hydrogen storage facilities.