To effectively address climate change we will need a range of solutions, and there are strong reasons to believe that hydrogen could be an important part of our decarbonization efforts.

That’s why it’s encouraging to see Canada’s federal government thinking holistically about how to leverage hydrogen, not only to reduce emissions but also to drive economic growth. These are the themes of the government’s new Hydrogen Strategy for Canada, released today.

Clean fuels like hydrogen can be an important part of the decarbonization effort. In our new policy report, Creating Clean Prosperity, we cite evidence that clean hydrogen could be an important part of our decarbonization efforts—especially in sectors like industry, aviation, shipping, and electricity storage.

We believe carbon pricing is one of the best ways to support the growth of clean hydrogen. A carbon price of $60/tonne makes it economical to capture the emissions generated by producing hydrogen from natural gas—so-called blue hydrogen. As the carbon price rises, it will make blue hydrogen cost-competitive with natural gas, and incentivize its use in a variety of sectors, from transport to steel production. 

“Carbon pricing is essential for driving the growth of hydrogen as an energy source.”

Carbon pricing is essential for driving the growth of hydrogen as an energy source. But a broad range of additional policy supports are needed—to help stimulate demand, build necessary infrastructure like pipelines, and create a clear regulatory framework. We’re pleased to see these included in the new plan.

While we think hydrogen will be an important part of the clean energy future, it’s important to design policies that give it a chance to compete without crowding out alternative technologies that may turn out to be superior to hydrogen in certain applications. For example, the case for hydrogen seems much more compelling in shipping and long-haul aviation than it does for passenger vehicles.

Overall, we think the government’s Hydrogen Strategy for Canada is a helpful step in the right direction, and we look forward to seeing how hydrogen can help us reduce our emissions and grow our economy.