Canada’s hydrogen strategy advances, challenges remain

Source: Reuters Events Renewables | · LINKEDIN · | August 21, 2024

Canada’s clean hydrogen strategy is developing with new projects and increased government support, but familiar challenges plague the industry.

Canada unveiled its clean hydrogen strategy in 2020 and in a May 2024 Progress Report the government highlighted a slew of developments, including the introduction of investment tax credits for hydrogen production, clean technology and manufacturing methods, and carbon capture, utilization, and storage (CCUS).

Some 80 low-carbon hydrogen projects have been announced, representing an expression of interest of over CAN$100 billion ($73 billion) in potential investment, as well as the establishment of 13 low-carbon hydrogen production facilities. Projects are also underway to boost demand across the energy spectrum.

“Hydrogen continues to have a role to play in meeting global energy needs in the context of energy security, energy transition and the broader climate imperative. This provides significant investment and export opportunities across Canada,” says Michael MacDonald, Natural Resources Canada spokesperson.

In March, the government finalized an export accord with Germany, together committing around CAN$600 million to establish a transatlantic hydrogen corridor.

However, since the original strategy was announced four years ago, developers and producers alike have struggled with a slow roll out of government subsidies, few final investment decisions (FIDs), insufficient infrastructure, and uneven definitions of what constitutes clean hydrogen.