Alberta has lofty hopes for the hydrogen energy market. But there are still a few gaps to be filled

It would seem the hydrogen energy market has caught the eye of Alberta's new premier, Danielle Smith.

In a recent interview with the Edmonton Chamber of Commerce, Smith lauded the fuel source and Alberta's potential future role in delivering it to the world.

"There's been something quite dramatic that has happened in this province in probably the last five years," she told the audience.

"I watched the innovation and the innovators and the new ideas coming up. And I don't think I've ever seen our business community as aligned on this issue that we not only can do this, we can do it better than anyone else.

"And that's the message that the rest of the world needs to hear."

Hydrogen is being touted globally as a key role in decarbonization as it produces zero emissions when used as a fuel source.

The International Energy Agency says hydrogen demand reached 94 million tonnes in 2021. It estimates it could reach 115 million tonnes by 2030 under current conditions, noting it is well below the 200 million tonnes needed by 2030 to be on track for net-zero emissions by 2050.

A Bloomberg outlook estimates that in the most optimistic scenario, hydrogen could provide up to 24 per cent of global energy demand almost 700 million tonnes per year by 2050.

Alberta has been using hydrogen for years as feedstock for industrial processes. It's now aiming to be a hydrogen giant with ambitions outlined in its 2021 Hydrogen Road Map.

By 2030, the province wants to have incorporated the energy source in its domestic system as well as "established itself as the global supplier-of-choice in clean hydrogen exports."

Alberta currently produces around 2.4 million tonnes of hydrogen per year. It aims to export three million tonnes by the end of the decade.

So what's the big deal about hydrogen?

Hydrogen is an abundant chemical element and energy carrier that is almost always found as part of a compound. It must be separated into pure hydrogen for use as a fuel.

That is achieved through a number of processes, including reforming natural gas or electricity splitting water into its elements.

The methods for production are often colour-coded according to their emissions. These include:

• Grey, typically made from natural gas without capturing emissions
• Blue, typically made from natural gas but emissions are captured
• Green, typically made from renewables with no emissions

At the moment, steam methane reforming using a high-temperature steam to produce hydrogen from a methane source like natural gas is the most common and cost-effective source of production.

By itself, that process still produces greenhouse gas emissions. Carbon capture, usage and storage where emissions are deposited into geological formations can reduce those emissions up to 85 per cent.

"Alberta is really technology agnostic when it comes to hydrogen," Heather Campbell, executive director of clean technology at the provincially-funded agency Alberta Innovates, said in an interview earlier this month.

"It's not about the specific production technology and being beholden to one production technology. It's about producing low or no carbon hydrogen with that low carbon intensity."

Autothermal reforming, another process with better carbon capture, is also being developed.

Today, hydrogen as a fuel is typically used in refining oil and fertilizer production. There are still technological and infrastructural gaps that must be addressed to scale production up, however.

"I would say it's integration plusresolving some of the downstream technologies and [carbon capture, usage and storage]," Campbell said.

Alberta Innovates aims to move the dial forward on some of these technologies through funding competitions, reviews, and providing laboratory and testing space for demonstrations and pilots, she said.

Where does carbon capture fit in with hydrogen?

There is definitely an expensive hitch when it comes to hydrogen: the cost of maintaining existing infrastructure and building for the future.

David Layzell, an energy systems architect with the Transition Accelerator and a professor at the University of Calgary, said adding carbon capture to existing facilities is expensive.

The Transition Accelerator is a non-profit and one of the partners of the Edmonton Region Hydrogen hub, a centre for hydrogen development established last year in partnership across multiple levels of government.

"Certainly, it requires some new infrastructure to be built," Layzell said. He points to the Shell Quest project as a carbon capture facility now online with more expected within two to three years.

Although just producing hydrogen is not the end of the road.

"We have to build an entirely new value chain around hydrogen in order to make it so that it can be actually a credible energy carrier for the future," Layzell said.

One issue being looked at is the most economical method for transport. Pipelines facethe obstacle of embrittlement cracking caused by the interaction of hydrogen atoms and metals.

Another is ensuring there is an end-use technology like a furnace or car that will use the fuel.

"They don't exist yet, or they're just coming online right now."

Layzell said what is economically viable within the next four to five years is hydrogen-fuelled heavy trucking, trains, and some off-road vehicles that currently use large amounts of diesel.

So what markets are available for Alberta?

Dale Nally, associate minister for natural gas until a cabinet shuffle last week, attended a hydrogen ministerial meeting in Japan at the end of September.

In an interview earlier this month, he said his message at the conference was to look beyond the hydrogen's colour and focus on carbon intensity. Nally said companies in Japan and the world are looking to Alberta.

"They see us as a key provider of their affordable clean hydrogen."

Nally said the province is currently shipping hydrogen derivatives by rail already and could leverage that network in the future.

Japan is an especially attractive target.

In 2017, it became the first country to create a national hydrogen framework. It aims to increase its hydrogen market from two million tonnes per year to three million tonnes by 2030 and eventually 20 million tonnes by 2050.

Japan is attempting to decarbonize while utilizing existing expertise in trading liquefied natural gas, according to Jane Nakano, a senior fellow at the Center for Strategic and International Studies in Washington, D.C.

Companies like Toyota are also looking to remain competitive in a market increasingly focused on reducing emissions, she said.

"They're not wedded to just renewable-based hydrogen," Nakano said. "They are looking to import methane-based or natural gas-based hydrogen, so long as the carbon is captured."

Japan is looking around the globe for sources but Canada, along with the United States, is at a distance disadvantage as compared to nearby countries like Australia.

"There's emerging rivalry amongst prospective hydrogen exporters to be able to capture the Japanese market."

And what about the federal government?

Both the provincial and federal governments are aligned in the desire to build a hydrogen market. Canada released its own hydrogen strategy in 2020, positing it could generate almost $50 billion in sector revenue by 2050.

"We see this as an enormous economic opportunity for Canada and an enormous opportunity to help the world to decarbonize," Natural Resources Minister Jonathan Wilkinson said in an interview earlier this month.

Wilkinson said the government is developing regulations for the development of hydrogen alongside international partners and making investments in the technology.

In the spring, the environmental commissioner said Canada may not be able to reach its 2030 emissions reductions targets because the strategy was based on "overly optimistic" assumptions.

Many of the reports recommendations were accepted and Wilkinson said there is work towards clarifying differential numbers between his office and Environment Canada.

"We continue to focus on those targets, and targets, even if they are ambitious targets, really drive action."