Canada's hydrogen economy needs support
Ottawa must act quickly to realize huge potential, Bob Masterson writes.
Canada's chemistry sector stands at the centre of the emerging hydrogen economy with important roles as a significant hydrogen producer, distributor and consumer — all in pursuit of a low-carbon economy. How are they doing this and what does it look like?
Hydrogen is often a co-product in the production of Canada's electrochemistry and petrochemistry industries. For instance, the production of chlorine and sodium chlorate, both used in the production of clean drinking water and forest products among other uses, results in the release of hydrogen from the electrolysis of water.
In recent years, electrochemical sites across Canada have retooled to capture a portion of that hydrogen and use it as a combustion fuel for building heat in their own facilities. This replaces natural gas and reduces site-wide greenhouse gas emissions.
The hydrogen generated from these facilities, however, exceeds on-site needs. More recently, companies such as ERCO Worldwide and Chemtrade Logisitics are partnering with others to bring this hydrogen to market and accelerate the adoption of zero-carbon hydrogen in long-haul transportation.
Hydrogen is also a co-product in the production of petrochemicals, such as ethylene, the single largest produced industrial chemical in Canada. Like in the above-mentioned electrochemical space, a portion of this hydrogen is already being captured and reintroduced in facilities as a substitute for natural gas.
In November 2023, Dow announced plans to build the world's first net-zero scope 1 and 2 emissions petrochemical facility. The new facility will be designed to capture, clean and reuse the byproduct process off-gas, and reintroduce the resulting hydrogen as fuel in what is being referred to as “a circular hydrogen process.”
Dow is partnering with industrial gases and engineering company Linde, which is converting the methane formed as a byproduct in Dow's ethylene production into hydrogen and CO2, the latter of which is captured, transported and sequestered.
Other hydrogen production facilities are planned to support the transition to a low-carbon economy in key chemical producing clusters such as Fort Saskatchewan and in Bécancour Que., where Air Liquide has completed construction of the world's largest “green” hydrogen electrolyzer.
Chemistry will also play a key role in delivering Canadian-produced hydrogen to offshore markets and to assist key Asian nations in meeting their own climate-change commitments.
While carbon free, the transportation of hydrogen over long-distances is an expensive and technologically challenging task. One solution to this problem is to carry the hydrogen in an embedded form in other chemistries such as methanol or ammonia.
At present, there are more than 10 proposals in Alberta and B.C., several of which involve First Nations proponents, to generate hydrogen from Western Canada's abundant natural gas resources, capture and store the carbon dioxide emissions associated with the hydrogen production, and then convert the hydrogen to ammonia and/ or methanol. Producers will export this via the Port of Prince Rupert to Japan where it will displace coal in the production of electricity.
Japan estimates that its emissions from electricity generation can be reduced by 35 per cent through direct substitution of ammonia in place of coal.
While Canada's chemistry industry is indeed at the centre of the emerging hydrogen economy, more work needs to be done for the sector to maximize its contributions and to assist in realizing the objective of a $50-billion contribution from hydrogen as proposed under the federal government's Hydrogen Strategy for Canada, First, the investment tax credits (ITC) that have been announced by Canada must be enacted into the tax code. In particular, the Clean Hydrogen, Clean Technology and Carbon Capture Utilization and Storage ITCs are necessary for the realization of the envisioned hydrogen economy.
The federal government must also work closely with the provinces, which regulate all aspects of fuel combustion in homes, buildings and industry. New standards and rules need to emerge quickly to enable the maximum, safe utilization of hydrogen across the economy.
Finally, continued attention is needed by Transport Canada in developing the regulations and standards to support the movement of hydrogen over long distances, whether in Canada or abroad and whether in the form of hydrogen or in a chemical carrier such as ammonia or methanol.
Our Chemistry Industry Association of Canada members are at the forefront of innovation, working to continuously improve the environmental, health and safety performance of their own operations through our UN-recognized chemistry ESG initiative, Responsible Care.
They are also at the forefront of providing solutions to enable the low-carbon solutions for other areas of the economy, such as transportation, buildings, energy generation and in other industries. It should come as no surprise then that Canada's chemistry sector is positioning itself as a central contributor to the emerging hydrogen economy.