Canada is thinking “each and every day” about establishing a low-carbon hydrogen sector capable of exporting the fuel and ensuring future employment for workers currently employed in its traditional oil and gas sector, a senior politician said at COP26 in Glasgow.

Natural Resources Minister Jonathan Wilkinson said Canada and other nations with significant oil and gas sectors believe building successful hydrogen sectors will be both economically and environmentally important.

“Certainly, from an economic perspective, for many countries — Chile, Canada, the United States and many countries in the European Union — this is not only a climate imperative in terms of the reduction of carbon, but it is an economic imperative,” he told a fringe event organised by the International Energy Agency (IEA) at the UN climate talks.

“There are enormous economic opportunities for countries that ... get into this game early to ensure that you are seizing those economic opportunities.

Canada launched a national hydrogen strategy in December last year as part of its plan to reach net zero carbon emissions by 2050.

Wilkinson underlined the strategy's core objectives of strengthening the economy, creating jobs and supporting energy workers.

“That is particularly important in countries like Canada where large numbers of people who work in the traditional oil and gas space are going to need to transition to new forms of employment," he said.

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“And so that is something that we are thinking about each and every day as we move through this transition.”

In April a steering committee comprising national and regional politicians, indigenous representatives, industry leaders and non-government organisations was set up to oversee implementation of these policies.

Canada’s oil and natural gas industry is active in 12 of its 13 provinces and territories.

Wilkinson said “blue hydrogen” produced from natural gas with effective carbon capture technology would be the initial focus with an intention in future to move to green hydrogen, which is produced by splitting water molecules using electrolysis powered by renewable energy.

“We see it potentially as an export opportunity,” said Wilkinson.

“We're focussed on low-carbon hydrogen and eventually zero carbon hydrogen.

“With blue hydrogen we've made a lot of advances, such that new capture technologies can capture up to 95% percent of the carbon.”

Great potential but just one solution

Also on the panel were IEA executive director Fatih Birol and Chile’s Mining Minister Juan Carlos Jobet.

Birol said the IEA sees hydrogen as having great potential but he cautioned he expects it will be just element of a cleaner global energy system of the future.

“We are not going to see a world totally dominated by hydrogen,” he said.

Several issues also need to be resolved to encourage hydrogen production and use to reach full potential, he said.

This included an urgent requirement to set globally recognised standards defining “low-carbon”.

“Blue hydrogen” would qualify as long as “the methane is totally nullified”, he argued.

But the biggest unresolved issue was finding out what measures and incentives governments will put in place to spur demand, he said.

“We need to know what are the rules of the game,” he said.

Birol noted that two years ago only three countries had national hydrogen strategies but this has already grown to 17 and 20 more nations were working on plans.

Jobet talked about Chile’s well-publicised aims of targeting green hydrogen produced from its abundant wind and solar resources.

The South American country last year published a national green hydrogen strategy that set out a target to have 5 gigawatts of electrolysis capacity under development by 2025 and to be one of the top three global exporters of green hydrogen by 2040.

“We set ourselves very ambitious goals to produce the cheapest green hydrogen on the planet by 2030,” said Jobet.

“We are making very good progress.”

Jobet said that the number of planned green hydrogen projects in Chile has tripled in just one year from 20 in 2020 to 60 currently.

But he added that Chile was still looking for offtakers and financing to come in to help the sector reach its full potential.

The IEA published a key report on hydrogen earlier this year.