Developing Canada's hydrogen market could create jobs and reduce emissions

Developing Canada's nascent hydrogen market could create up to 350,000 jobs by 2050 while also reducing greenhouse gas emissions by 26%, according to a report from EY Canada and The Canadian Energy and Climate Nexus.

According to the report, the Canadian annual market potential for hydrogen could reach $100 billion and reduce emissions from 729 million tons of carbon dioxide equivalent (Mt CO2 eq) in 2018 to 511 million in 2050. At that projection, hydrogen would represent 27% of Canadian energy demand. 

Today, however, hydrogen accounts for less than 1% of Canadian energy demand, with 3 million tons of hydrogen produced in the country annually, predominantly as an industrial feedstock. Growing the sector will require hugely expanding hydrogen’s usage across various realistic applications, including as a replacement for diesel in transportation and mining, gasoline in automobiles, and natural gas for heating. 

“Canada has an immediate opportunity to integrate existing energy infrastructure into the evolving hydrogen value chain to become a global leader in hydrogen production, distribution, and market use,” said Lance Mortlock, EY Canada energy leader. “It’s time for leaders across public and private sectors to assess the size of the opportunity and how their respective organizations can help enable the hydrogen future.”

As a top 10 producer of hydrogen, Canada is well-positioned to be a leader in the field, according to the EY report. However, the private sector will require carrots and sticks to advance the use of hydrogen, so the government will have to enact effective incentives and regulatory regimes. This includes regulations and fuel standards that encourage investment, research, and innovation.

Manufacturers will also need investment incentives, funding programs, subsidies, and long-term policies to pursue development of the required market applications.

“Hydrogen has tremendous potential to expand its market application while helping to decarbonize the economy, but it needs to be explored as part of the broader equation,” said David Milia, president and CEO of The Canadian Energy and Climate Nexus, a non-profit that focuses on developing all-inclusive energy systems in balance with climate change constraints. “If we’re going to move the needle forward on decarbonization, we need to work collaboratively — across sector, public, and private companies — to find a middle ground that addresses all sources of energy and finds a balanced approach that supports a climate-friendly future.”