US industrial gas specialist Air Products has netted C$475m ($351m) in federal and provincial funding for its planned $1.6bn “net zero” blue hydrogen complex in the fossil fuel producing region of Alberta, Canada.
But the company has not addressed the issue of how it will store and verify the carbon dioxide produced by the Canada Net-Zero Hydrogen Energy Complex, or how it will account for the lifecycle methane emissions.
Canada’s federal government is putting up C$300m from the national Strategic Innovation Fund, while Alberta’s provincial government is contributing C$175m from two separate local funds.
The project will make hydrogen from fossil gas — which is produced in abundance in the area — storing the carbon dioxide emissions underground. Hydrogen produced this way is known as blue hydrogen.
Some of the blue H2 will then be liquefied, producing around 35 tonnes per day of liquefied blue hydrogen.
Around half of the project’s output is set to be delivered via Air Products’ existing Alberta Heartland Hydrogen Pipeline to US oil giant Imperial Oil, which has a refinery around 5km away and is planning to make renewable diesel at the site from biomass and hydrogen.
The remaining product will be liquefied and marketed to the transport sector for use in heavy goods vehicles, Air Products said, adding that electric solutions were unsuitable for the Canadian market.
It is not clear if Air Products has fuel cell customers in mind, or if its customers are considering using hydrogen as a drop in fuel for a modified internal combustion engine. Reports from Europe suggest that hydrogen fuel cell vehicles will be unable to compete with their electric counterparts on cost.
However, Air Products believes that Canada’s climate will push hydrogen’s advantage.
“Hydrogen is seen as having a substantial technological advantage over battery electric vehicles in heavy-duty applications due to those vehicles’ duty-cycles, especially in Canada’s extreme climate conditions,” the company said.
But how zero is the net zero complex?
The project will use an auto-thermal reformer (ATR) that can make blue hydrogen from fossil gas which will enable 95% emissions capture, Air Products said.
The company plans to store the emissions underground. It has not said where, although it will likely be in a depleted gas field, given the area’s geology. Nor has it said how it will verify and report the emissions, or how much it will cost — which might explain why the company is in receipt of such a large amount of public money.
None of the officials present at the announcement mentioned whether the project would be eligible for further public funding from Canada’s 40% low carbon hydrogen production tax credit, announced last week. The parameters of “low carbon” are set to be outlined in an upcoming public consultation.
Both the ATR and the liquefaction plant will be powered by a hydrogen power plant, which the company says will also export electricity to the local grid, effectively offsetting any residual carbon emissions.
The major fly in the ointment is methane emissions, which account for around 30% of global warming to date. Canada’s record on upstream and fugitive methane emissions has improved — coming in at around 5.2 tonnes per million tonnes of oil produced — but is still far below the performance of oil-producing countries such as Norway, which have brought methane emissions down to almost negligible amounts.
Nevertheless, local and national politicians were out in force for the announcement, with Johnathan Wilkinson, Canada’s minister of natural resources, hailing the export prospects of Canadian-produced H2.
“Unlocking the potential of hydrogen is an essential part of the federal government’s plan for a sustainable economic future – not just for the domestic opportunities for emissions reductions but also for its potential as an export opportunity: to provide clean energy to countries around the globe,” he said.
Canada signed a hydrogen alliance with Germany over the summer, with a view to eventually exporting green hydrogen-derived ammonia to German customers trying to reduce their dependence on Russian gas.
But most of the projects involved in this initiative are located on Canada’s eastern coast, with easy access to the Atlantic sea routes. Alberta, on the other hand, is located thousands of miles from the nearest coastline on the west.
Efforts to deliver Alberta’s fossil gas as LNG exports to Asian markets famously foundered over the past decade due to cost and regulatory difficulties — it is hard to see how exporting hydrogen would be any easier.
