Thumbs up from industry for Ottawa’s new hydrogen strategy

Rating: High school and post-secondary

Summary: Markham interviews Mark Kirby, CEO of the Canadian Hydrogen and Fuel Cell Association, about the Dec. 16, 2020 announcement of a Canadian hydrogen strategy from the federal government.

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This interview has been lightly edited.

Markham Hislop: Big day for the Canadian hydrogen industry today the federal government announced it’s a hydrogen strategy. It’s ambitious, it’s well thought out, there’s money attached, and it looks like this is going to be a real shot in the arm for the Canadian industry and for the Canadian economy. So to talk about that, we’re going to speak with Mark Kirby, who’s the head of the Canadian Hydrogen and Fuel Cell Association.

Let’s start with your response to the announcement today by Natural Resources Minister Seamus O’Regan.

Mark Kirby: Well, we’re naturally very pleased with the announcement of the hydrogen strategy, from Minister O’Regan. It’s been a long time in the making. They have consulted extensively and they have listened. They have put in place a number of key recommendations that we think will really help to drive the commercialization of hydrogen energy in Canada, and really position us to be a leading country in this area, a lot of work to be done.

The 80-plus members of the Canadian Hydrogen and Fuel Cell Association are very keen to get to work, to flesh them out and bring forward projects. Because it’s all about projects, getting actual work on the ground and getting those funded and getting those moving forward.

Markham Hislop: Now for my take, there seem to be four components of this plan: stimulating domestic demand, stimulating the domestic supply of hydrogen, exports of hydrogen, and hydrogen technology. Is that a fair way to look at this point?

Mark Kirby: It’s a very good point. Technology is critical. The technology has advanced, but to maintain Canadian leadership, we are going to have to continue investing in technology. And I think that we have a very good track record of that, and we can be very proud of the, of the companies, the researchers, and so on.

Looking at the demand and supply part of it, those two go hand in hand. You need to be in parallel developing demand as you develop supply, and that’s challenging. And that’s where the federal government and other levels of government really do need to step in and help to de-risk that because it’s very hard to make those multi-billion dollar investments in hydrogen production if you’re not sure about demand. Conversely, it’s very hard to rely on hydrogen as your main source of energy until you are certain about where you are going to get it from.

So this, this is a very clear signal that hydrogen will be available, that Canada will be a leader in the supply of low cost, low-carbon hydrogen. And if you’re looking to make investments as an energy company, look at hydrogen because there’s going to be growing massive growing demand for it. This is a huge business opportunity.

Those two together – domestic demand and the starting of the domestic supply – will lead to international markets. We need to recognize that it’s going to take some time for those markets to develop, again a huge role for the federal government in making sure that the pathway is there, that the codes and standards are in place for exports and to bring together the industry partners. So we can bid credibly on supplying Korea or Japan or whoever it happens to be.

Markham Hislop: A number of the provincial governments have announced that they either will have hydrogen strategies, or they have them now. In Alberta, for instance, you see the government moving towards a “blue hydrogen” strategy where you’re using natural gas, then sequestering the CO2, which leaves you with [relatively low-carbon] hydrogen. But in Quebec, we’re looking more at “green hydrogen” where they’re making it with electrolysis and, and hydro-power.

How is the federal government going to work with the provincial strategies?

Mark Kirby: I think it’s really acknowledged by the feds that every region is going to have its own pathway to producing hydrogen. It’s going to have its own applications. That makes sense.

The way that the strategy has been promoted is to have regional blueprints developed in partnership with the provincial governments and actually even going down to a more regional level, looking at hubs. And this is a key thing because hubs or clusters or valleys, are areas where you have low-cost supply combined with multiple applications [that consume hydrogen] to get scale.

It’s an approach that’s being followed around the world, and it’s an approach that we can follow in Canada, and we must follow in Canada. And that is a very much a provincial or local effort that needs to take that needs to be undertaken.

That’s again, where we as an association are really keen to support that. We’re kicking off provincial branches. We have working groups together to look at advancing hub projects in key areas.

Alberta has taken a real leadership role in this, but I’m hearing about them in a Sarnia, in the Maritimes in BC, Quebec, etc. There’s really a good opportunity right across the country to look at the strengths and the opportunities and come together with meaningful projects.

The key thing that needs to back all this up is going to be funding. And the measures in the revised climate plan for Canada do have some important funding measures. The $1.5 billion allocated to clean fuels is a good step, but honestly, it’s just a first step. And I think that is acknowledged in the plan that there is going to have to be much more investment than that.

If you look at what’s happening around the world, if Canada expects to stay in the forefront, here, there is going to have to be more investment. But again, a great start. We, as an industry, need to show that we will use that money, that we will start getting projects on the ground.

Markham Hislop: Last question, Mark I’ve read a fair amount about hydrogen development in different countries. And one of the things that seem to be primed for this is the eagerness of the financial markets to get into clean fuels. And it would seem that if you have the right regulatory environment, the right export strategy, you’ve got credible companies with credible projects, this looks to be a really good time for the investors and the financial community to step up and support this.

Mark Kirby: Absolutely. I think there are enormous opportunities right now. And as you say, investors are recognizing it.

Just yesterday there was an announcement of an investment in a good Canadian company, H Tech, $20 million investment by a US company, recognizing they want to be in the Canadian market. They want to have access to Canadian technology.

And I think that’s just a precursor of some of the other work that’s going to go forward. It is going to be a huge investment opportunity. There is going to have to be a role from government to help in de-risking those early investments again, around demand, around some of the technology risks. I think any smart investor is now starting to look at this and seeing that there’s huge potential.

Some of the numbers are a little bit scary. You look at the trillions that they’re talking about are going to be needed in this area. And when we look around Vancouver alone, just one little area, you know, we need to invest in hydrogen production. We have the ports, the vehicles, it’s really a very exciting economic opportunity that is going to come out of this.

Markham Hislop: Final question, Mark. I always get asked by students and teachers, where are the jobs coming from? And it would seem to me, I think the minister mentioned in his press release, there’ll be 350,000 new jobs across Canada.

And what kind of jobs might these create? Are these jobs for which we already have skill sets or will, you know, universities and technical schools, high schools even have to put in place training programs and education programs?

Mark Kirby: Yes, to all the above. We are certainly going to look to our technical colleges and universities to recognize and support the development of skills in this area. Just my member companies, we’re all expanding, looking for good, talented people.

We are an energy and energy technology exporting nation. We’ve done this for decades. And a lot of those skills are very transferable. You know, you look at our oil patch and some of the skills that are there in terms of processing pipelines those are all directly applicable over to hydrogen.

Our massive renewable power and independent power producers, they are going to have lots of opportunities. So even going much further down to the level of servicing and maintenance of fuel cell vehicles you know the electric vehicles that are being now being built in Ontario you know that will have the opportunity to expand into fuel cell electric vehicles.

I think there’s going to be employment opportunities right across the board. As this reality, the world today, we’re going to have to look at developing talent at moving talent and retraining people from different sectors and add immigration to bring in those talents that we’re going to need, because it’s going to be busy.

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