In late August, the multinational gas giant Linde announced plans to build and operate a $2-billion clean hydrogen facility in Fort Saskatchewan, Alta. The facility will be the largest clean hydrogen project in Canada and one of the largest globally.
The company says the facility will ultimately capture more than two-million metric tonnes of carbon dioxide emissions each year.
“Linde is helping to build a more sustainable future,” said the company’s CEO, Sanjiv Lamba, in a company statement. “Our technology, experience and execution are enabling the transition to a cleaner economy.”
The Alberta government also hailed the investment as a win for the economy and environment. But green energy experts caution that hydrogen’s role in decarbonization has serious limitations.
“[Hydrogen] will fill a lot of niches, but we have not produced a modeling scenario where it is a key contributor to broad-based, cross-sectoral decarbonization,” said Brendan Frank, director of policy and strategy at Clean Prosperity, a non-profit that advocates for practical climate policy solutions.
“It can do a lot of things, but it’s not the clear winner in many industrial applications.”
‘Big buzz’
Hydrogen can be extracted from hydrocarbons, such as oil or natural gas, leaving carbon behind as a waste product. In clean hydrogen processes, this resulting carbon can be captured, rather than released into the atmosphere.
Historically, hype for hydrogen has tended to occur in cycles, says Frank.
“There was a big, big buzz around hydrogen in the 1980s, and then again in the 2000s, and then it died down because there aren’t a tonne of applications for it.”
In recent years, federal and provincial governments have again been bullish on hydrogen’s possibilities.
The federal Clean Fuel Regulations, which came into effect in June 2023, create incentives for the transportation sector to use clean hydrogen. And since June of this year, companies have been able to claim a federal Clean Hydrogen Investment Tax Credit for eligible capital investments.
“The impact of the federal investment tax credit for clean hydrogen is yet to be seen,” says Stefan Pauer, manager of technology and economic analysis at Clean Energy Canada, a climate policy program affiliated with Simon Fraser University.
“[It is not yet clear whether] it will be able to attract investments here in Canada given that our southern neighbour has been spurring clean hydrogen production with the US Inflation Reduction Act,” he said.
Alberta has also been creating incentives for hydrogen investment.
The province, which in 2021 released a Hydrogen Roadmap, says it wants to expand hydrogen use in four areas: heating for residential and commercial properties, power generation and storage, transportation and industrial processes.
But Frank sees hydrogen being primarily used for industrial purposes.
“There are five applications in total where hydrogen makes the most sense or has no real alternative,” he says, referring to the Hydrogen Ladder, a summary of hydrogen’s potential uses compared to alternative power sources.
“As you move down the ladder, you get less and less plausible applications,” he said. “We really don’t see any pathway for domestic heating, or heating households with hydrogen, for example.”
Pauer agrees.
“It’s best to use clean hydrogen in a targeted way, where other options are extremely difficult, more costly, or not even available,” he said.
“Instead of using electricity to produce hydrogen that could be used for heating a home, it’s much more efficient to use electricity for running a heat pump. Likewise, electric vehicles — not hydrogen-powered cars — are the clear pathway to decarbonize passenger transport,” he said.
Learning curve
Frank says Canada’s adoption of hydrogen will ultimately be determined by the “speed and direction” of the United States.
“The U.S. Department of Energy wants to cut the cost of producing green hydrogen from five to one,” Frank said, referring to hydrogen generated from water using renewable electricity. “If that doesn’t happen, that’s a real constraint on growth.”
“The spending power of the United States government is so enormous that we will, whether we like it or not, climb down the learning curve with them on many technologies, including hydrogen.”
Despite these concerns, Canadian governments at the federal and provincial levels are pressing ahead.
Josh Aldrich, press secretary to Alberta’s Minister of Energy and Minerals Brian Jean, said in an emailed statement that hydrogen is a “tool the province is using to decarbonize.”
He highlighted various programs the province has implemented to attract investment in the space, including its Alberta Petrochemicals Incentive Program, which offers government funding up to 12 per cent of the capital cost of eligible projects.
Aldrich declined to say how much the province’s subsidies were helping to fund Linde’s $2-billion clean hydrogen investment.
