Two Alberta energy companies team up on proposed hydrogen project outside Edmonton, but say federal and provincial governments must act quickly on regulatory changes to ensure it gets built . They would also like to have money to help them.
Hydrogen, which does not emit carbon dioxide when burned, plays a critical role in Canada’s plan to achieve net greenhouse gas emissions by 2030. While the federal and provinces find the best way to develop a robust hydrogen sector to help meet climate goals, Suncor Energy Inc. and ATCO Energy Ltd. proposed a new facility that would produce more than 300,000 tonnes of hydrogen from natural gas each year.
The facility near Fort Saskatchewan would capture approximately 90% of the emissions generated by the production process. Most of the hydrogen produced there would be used at the Suncor refinery in Edmonton. ATCO and Suncor say the remaining 20% could be used in Alberta’s natural gas system to further reduce emissions.
In its recent budget, the federal government said it would create a Carbon Capture, Use and Storage Tax Credit, or CCUS. This credit will be essential to develop a hydrogen sector in Western Canada, where the fuel is derived from natural gas with carbon emissions trapped by CCUS technologies.
ATCO and Suncor are participating in consultations on the new federal tax credit, and Suncor CEO Mark Little told The Globe and Mail on Tuesday that this was part of the reason they have pitched the project now. .
“Having a consultation with a specific project so you can say, ‘Look, here’s how we can do it. Now what must happen? is much easier than having a conversation about government policy in the abstract, without really understanding what the projects look like, ”he said.
“Things have to change because you can’t sit in a regulatory queue for 10 years and expect to achieve Canada’s ambition of deep cuts by 2030. It just won’t happen.
Ottawa and Alberta released hydrogen strategies last year, aimed at establishing a $ 50 billion domestic hydrogen market by 2050. But the success of these plans will require a host of efforts. regulatory and policy changes regarding things like mixing hydrogen into the natural gas distribution system and how hydrogen exactly fits into Canada’s new clean fuel standards
Mr Little and ATCO CEO Nancy Southern acknowledged that some government programs and regulations had already been put in place to support the development of a hydrogen industry, but said the sector needed more. greater regulatory certainty and fiscal support to help Canada meet its net zero goals. .
Ms Southern hoped that coming up with a concrete project could speed up these discussions and contribute to well-informed political discussions.
“It will be essential for Canada if we are to meet the new expanded targets for 2030 – as well as 2050 – that we continue with this,” Southern told The Globe. “If there is no certainty, there will be no investment.”
While Ms. Southern acknowledged that “the path economically will be difficult” for the new facility, she hopes it can stand on its own as a viable project.
Alberta, Ottawa and industry are all aligned on developing a hydrogen sector, added Little, so “if we’re going to do this, we have to act quickly.
Dale Nally, Associate Minister of Natural Gas for Alberta, said his government had consulted widely on how best to become a leader in hydrogen and that he had “a good understanding of the regulatory barriers and political catalysts necessary to achieve our ambition ”.
He said how the province plans to support the growth of the sector will be contained in the province’s hydrogen roadmap, although there is no date for the release of the plan yet.
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