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Our committee launched a study titled Hydrogen: A Viable Option for a Net-Zero Canada in 2050?. We were concerned with solutions for climate change. We wanted to understand hydrogen’s potential role in the energy transition for Canada to achieve its goal of net-zero greenhouse gas emissions by 2050 (NZE2050).

Achieving NZE2050 in Canada’s energy system will depend, in part, on low-carbon intensity (CI) electricity and low-CI fuels, including hydrogen. Low-CI electricity will do most of the work of achieving NZE2050, but in the sectors and applications where electricity is not a good option, low-CI hydrogen can possibly replace high-CI fossil fuels. This would be something fundamentally new for Canada, requiring a transformational change to infrastructure and energy mixes over the coming few decades. If successful, new industries, products, and services could emerge with different regional benefits.

However, it does not make sense to consider hydrogen in isolation from the alternatives. To get to NZE2050 requires a systems perspective that looks at all the options for the energy system and optimizes for the outcomes we want. There are no low-CI options that are silver bullet solutions for the energy transition. The systems perspective makes transparent the tradeoffs between low-CI options and helps us understand their different social, environmental and economic values and costs. The perspective can help us protect current and future generations by identifying and considering their concerns in decision-making and energy planning today.

How hydrogen is made and whether it is made from methane or water is less important than what its life cycle carbon intensity is. NZE2050 demands that eventually Canada use only the lowest carbon intensity energy options in our economy. But the hydrogen Canada produces and consumes today is more than twice as carbon intensive as methane, so low-CI hydrogen supply and demand needs to grow from near-zero to play a role in achieving NZE2050.

While there are lots of potential pathways for producing and using low-CI hydrogen in Canada, some are more promising than others. The Government of Canada described many of these pathways in its national vision for the hydrogen sector, the Hydrogen Strategy for Canada: Seizing the Opportunity.

At the same time, the provinces and territories have their own hydrogen ambitions depending on their natural resources, energy supplies, policy environments, economies, infrastructure, and other factors. What ends up determining the hydrogen pathway in each region may come down to the relative cost of methane, geological sequestration of greenhouse gases, and of low-CI electricity.

The Government of Canada has supported the hydrogen sector for many years, including through research and development, funding programs, tax incentives and regulations. But the domestic low-CI hydrogen sector is unlikely to develop on its own without further government supports – or at least it will not develop at the pace required by NZE2050. The domestic hydrogen sector is also at risk of investments going to other countries, such as the United States with its Inflation Reduction Act of 2022, that offer more generous incentives than Canada provides.

New Government of Canada policies have recently been announced to support the hydrogen sector. Our report, Hydrogen: A Viable Option for a Net-Zero Canada in 2050?, outlines our findings and provides our recommendations to the Government of Canada as it designs policies to help Canada achieve NZE2050.

Membership of the Committee during this study which was held under the presidency of the Honourable Senator Paul J. Massicotte.

Ex-officio members of the committee: The Honourable Senator Marc Gold, P.C., or Raymonde Gagné, the Honourable Senator Donald Neil Plett, or Yonah Martin

Other Senators who have participated in the study: The Honourable Senators Pierre-Hugues Boisvenu, Claude Carignan, P.C., Clément Gignac, Peter Harder, P.C., Frances Lankin, P.C. and Hassan Yussuff