Environment Committee on Oct. 21st, 2022

[The Chair, Liberal, Francis Scarpaleggia]

I call this meeting to order.

Welcome to meeting number 31 of the House of Commons Standing Committee on Environment and Sustainable Development.

I'd like to begin the meeting by electing a member of the Conservative Party to the position of first vice-chair, as this position is vacant.

For this portion, I will turn it over to the clerk, who will take care of the election of the first vice-chair.

[The Clerk of the Committee, Mr. Alexandre Longpré]

Pursuant to Standing Order 106(2), the first vice-chair must be a member of the official opposition.

I am now prepared to receive motions for the first vice-chair.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I nominate Damien Kurek.

[The Clerk]

It has been moved by Dave Epp that Damien Kurek be elected as first vice-chair of the committee.

Are there any further motions?

[Terry Duguid, Liberal, Winnipeg South, MB]

I second the motion.

[The Clerk]

It has been moved by Dave Epp that Damien Kurek be elected as first vice-chair of the committee.

Is it the pleasure of the committee to adopt the motion?

[Greg McLean, Conservative, Calgary Centre, AB]

Can I second that motion?

[The Chair, Liberal, Francis Scarpaleggia]

It was seconded already, but I guess you can. We know your intent now, so it's noted.

[The Clerk]

Is it the pleasure of the committee to adopt the motion?

(Motion agreed to)

I declare the motion carried and Damien Kurek duly elected first vice-chair of the committee.

[The Chair, Liberal, Francis Scarpaleggia]

Congratulations, Mr. Kurek. We look forward to working with you on the steering committee, which meets not too often, but from time to time.

We are completing our hearings for the clean-tech study today in the first hour. I would just like to mention that, in accordance with our routine motion, all the witnesses have completed their technical tests, and they have passed, so we're set to go.

We have three witnesses today.

We have Ivette Vera-Perez from the Canadian Hydrogen and Fuel Cell Association. From Fogdog Energy Solutions Inc., we have Swapan Kakumanu. From the Greater Victoria Harbour Authority, we have Ian Robertson.

Each witness has three minutes to give their opening remarks.

We'll start with Ms. Vera-Perez.

[Ivette Vera-Perez, President and Chief Executive Officer, Canadian Hydrogen and Fuel Cell Association]

Good afternoon.

My name is Ivette Vera-Perez. I am the president and CEO of the Canadian Hydrogen and Fuel Cell Association, CHFCA, with over 160 members at all stages of the hydrogen supply chain. Our members export clean technologies to over 42 countries that account for 65% of the world population.

According to a recent report by EY, the annual Canadian hydrogen market could reach $100 billion and create 350,000 jobs by 2050. Recognizing this potential and the fact that we cannot get to net zero without hydrogen, CHFCA members recently visited Ottawa, where we made a number of recommendations that I bring to you today.

Canada must keep up with the ambition and activity in jurisdictions across the globe. Countries like Germany, China and the U.S. have made massive strides in scaling up the industry. The Inflation Reduction Act in the U.S. is one example. Its simplicity and the amount offered for hydrogen outpace Canada. We must operate in a global context when developing funding and policy so that we don't see our projects and companies migrate to other jurisdictions.

The Canadian 2020 hydrogen strategy committed to develop 30 hubs by 2030. Since then, there has been much discussion about the Canadian hydrogen sector, but not significant action at the federal level. Canada's commitments for the sector continue to increase, including the agreement to export clean hydrogen by 2025, but we're far behind in meeting this target. Deployment of the hydrogen strategy must be appropriately resourced to accelerate its implementation.

Programs like the strategic innovation fund and the clean fuels fund are great signals of the ambition the government has for Canadian clean-tech companies and for the industry, but the resource-intensive application process and the long wait times are a deterrent for project proponents. We must commit to a reasonable turnaround time for SIF, CFF, CIB and any other future funding.

Finally, federal strategies and policies should build on and enable each other, but too often they work at cross-purposes. This is costly, inefficient and ineffective. We recommend that all proposed federal strategies and policies undergo an assessment of how they support the government's vision. For example, Canada has declared a goal of net-zero emissions by 2050. Hydrogen has a key role to play in this respect. We must put forth the right set of enabling policies that jointly work to attain these goals.

In closing, Canada has always been at the forefront of the global hydrogen industry, but with the rapid development of the sector and our lack of action at home, Canada is falling behind. We must invest smartly, heavily and rapidly to reclaim our leadership position in the hydrogen sector.

Thank you very much. I look forward to your questions.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Vera‑Perez.

You're next, Mr. Kakumanu. You have three minutes.

[Swapan Kakumanu, Chief Financial Officer and Co-Founder, Fogdog Energy Solutions Inc.]

Thank you.

My name is Swapan Kakumanu. I'm the co-founder and director of Fogdog Energy Solutions Inc.

Fogdog is a privately owned Canadian company headquartered in Calgary, Alberta. Fogdog's mission is to eliminate landfills. We do that by creating groundbreaking innovations, where Fogdog systems use materials that would have otherwise been sent to landfills. Those materials provide sustainable green energy and raw materials while reducing greenhouse gases. Fogdog is currently working on a few joint venture partnerships and projects in Canada, as well as internationally.

To put this into context, Canada currently produces around 32 million tonnes of landfill waste per year. Fogdog's mission is to remove these 32 million tonnes from landfills and, in turn, help reduce the climate change temperature by up to 3°C in Canada. Fogdog can process many forms of waste, such as municipal, plastic, tires, oil waste, agricultural waste, etc., and, in turn, create high-quality products, such as graphite, graphene, hydrogen and other green fuels. Graphite, for example, is in high demand in the electric vehicle industry; it's used to manufacture batteries to run these electric vehicles. Currently, China is the largest exporter of graphite in the world.

Let me explain a bit about landfills.

Landfills are a huge problem and have a direct impact on climate change temperature. Less than 10% of plastics are recycled and the rest end up in landfills. Landfills are reaching capacity and new ones need to be built. They contribute up to approximately 30% of Canada's methane emissions—a powerful greenhouse gas. Methane, as everybody knows, is 21 times more potent than CO2.

The full-cycle cost of an average landfill is over $30 million, and it also has a long-term environmental liability and impact. Landfills are huge fire hazards. We have recently seen several of these going up in flames and, in turn, emitting harmful gases as the landfills burn. Currently, landfills do not provide any revenue or energy but are a huge cost, both financially and environmentally. Municipal waste management is expensive. Municipal governments in Canada collectively spend around $4 billion per year on waste collection, transportation and disposal, and on maintaining these landfills. Finally, every landfill leaks. Leachate, a toxic brew of waste chemicals, leaks into the ground system.

Let me talk a bit about Fogdog and the municipalities.

[The Chair, Liberal, Francis Scarpaleggia]

I'm sorry to interrupt, Mr. Kakumanu, but the three minutes are up.

Please wrap up quickly. A period of questions and answers will follow.

[Swapan Kakumanu]

Sure, I will do that.

Around 2017, China stopped taking all the plastic and waste to process, resulting in most of the countries, including Canada, now facing huge problems in maintaining waste. The Fogdog process does not need upfront segregation or separation of waste. It takes its waste as it comes. The Fogdog process—

[The Chair, Liberal, Francis Scarpaleggia]

Thanks very much. We'll have to stop there.

We'll go to Mr. Robertson for three minutes.

[Ian Robertson, Chief Executive Officer, Greater Victoria Harbour Authority]

Thank you for the opportunity to appear before you today as you continue your important work on clean technologies in Canada.

My name is Ian Robertson. I'm the CEO of the Greater Victoria Harbour Authority.

To start, I wish to acknowledge with respect the Lekwungen peoples, on whose traditional territories we operate, and the Songhees Nation and the Esquimalt Nation, whose historical relationships with the land continue to this day. Both nations form part of our eight member agencies.

For those who are not aware, the Greater Victoria Harbour Authority is a community-based not-for-profit organization that is committed to the stewardship and sustainable growth of Victoria's dynamic working harbour. Our organization is governed by a 13-member board of directors, represented by four independent members and eight member agencies.

The Victoria cruise terminal at the Breakwater District is Canada's busiest port of call. Victoria is an essential Canadian cruise port of call for vessels operating in the coastal waters of southeast Alaska and British Columbia. In 2022, Victoria will have welcomed 330 ship calls carrying 725,000 passengers.

In 2018, greenhouse gas emissions from the Victoria cruise terminal were equivalent to just over 3,200 cars on the road per year. Since 2010, criteria air contaminants have decreased by 41%; sulphur dioxide has been reduced by 95%; particulate matter has been reduced by 79%; and cruise passenger counts have increased by 45%, while GHG emissions have increased by only 19% due to increasingly stringent emission standards. Cruise emissions account for 96% of all emissions at the Victoria cruise terminal.

In January 2019, we contracted Synergy Enterprises to develop a full-scale emissions inventory for the terminal to help identify where we could make improvements to emissions under our control and jurisdiction. After extensive study of various shore power technologies, frequency conversion technology installed with the shore power connection has been recommended to optimize for variability in types of cruise and non-cruise vessels, further adding to the long-term diversification of the deepwater port.

The study found that by implementing a shoreside power system at two berths, the estimated annual reduction of carbon emissions is between 6,400 and 7,300 tonnes of CO2. This equates to a total savings of just over 131,000 tonnes of CO2 through 2040 over a no-action scenario. Sulphur dioxide and nitrogen oxides would also similarly reduce as well. These reductions would be in addition to gains made by the cruise industry to meet the global challenge of reducing the rate of carbon emissions across the fleet by 40% by 2030.

As other ports in North America and elsewhere have seen, shore power technology drastically reduces emissions where vessels are in port, as well as reducing emissions from buildings and fleet vehicles, along with other vessels being able to plug into the shore power infrastructure. This is an important move that is being adopted by the cruise lines themselves. By 2030, 85% of all vehicles calling to the Victoria cruise terminal will be shore power-capable. That number will—

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll have to stop there, but there will be opportunities to share information in the Q and A period.

We'll start the first round of questions with Mr. Deltell.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you very much, Mr. Chair.

Good afternoon, honourable colleagues.

Welcome to the witnesses, who are joining us by videoconference.

My first questions will be for Ms. Vera‑Perez on hydrogen.

It's good to see you, Madame Ivette Vera-Perez. I'm very pleased to see you at our committee.

When it comes to hydrogen, it's impossible to set aside the issue of electricity and the enormous energy requirements involved in producing green hydrogen.

Can you tell us more about that?

What are the challenges that Canada faces in meeting the electricity needs when it comes to hydrogen?

[Ivette Vera-Perez]

Thank you for the question. It is a good question.

I have read before that Canada has agreed at a national level that it would have to double or triple its capacity, as a rule of thumb. This is not only for hydrogen, but in general for electrification.

Hydrogen actually provides an avenue to enhance the grid, if you will, in the sense that hydrogen can be produced when the peak needs of electricity consumption are not there. In those times when you need less, you can store hydrogen. Hydrogen is one of the few mediums that you can store at the terawatt level for a long period of time. Fortunately, in Canada we have a blessed geography that allows us to store hydrogen in depleted natural gas caverns and salt caverns. That's not only in Ontario, but in different provinces as well.

For example, you can extend the life and the size of projects in the solar and wind space, but allow them to produce hydrogen when the grid is not in a position to absorb all that electricity, and then use it when needed. At the same time, transmission lines can be a bottleneck, if you will, when it comes to bringing more renewable wind and solar energy on board. Hydrogen provides that avenue as well.

Depending on the different provinces in Canada, we need to understand how and when in the 24-hour period it is more optimal to produce hydrogen.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

If we look at the Quebec situation, as you know we have a great expertise and a great asset when we talk about hydroelectricity since, I would say, the 1950s and the 1960s. There are also other projects.

Maybe you noticed that the premier of Quebec said three weeks ago that he was open to having a brand new facility for that.

Do you think it would be a good thing to ensure we have more dams in Quebec, where that's feasible, obviously? However, it's important to realize that constructing a new dam takes at least 10 years.

For example, the iconic Manic‑5 Dam began construction in 1959 and operation in 1968. It's the emblem of Quebec and the pride of all Quebeckers. It took nearly 10 years to complete it.

What do you see as hydro's potential as it relates to hydrogen and green hydrogen?

What other sources of energy could produce electricity?

[Ivette Vera-Perez]

That's a very good question.

You're very right. Hydro provides a tremendously stable potential for electricity generation, but it takes a long time. This is why we need to think short-, medium- and long-term. It's the same as nuclear, for example. There are lots of conversations in Ontario.

These technologies take time to be at the product's full capacity. Hydro is an option. Again, thinking long-term, we're looking to develop a new way to scale up an industry here. We think about the volumes we want to produce in 2040 and 2050. At that time, obviously, the hydro power facility will likely be up and running—if it is approved, of course.

In the meantime, you think about what is quicker to develop. There are renewable energy projects, for example, like solar and wind. Wind also has its lead time to production, but it tends to be a little bit shorter. There's solar as well.

Then there's always the utilization of the grid. Again, think about what times of the day are the most optimal. There's also the possibility of producing hydrogen through all our methods, which are not necessarily producing hydrogen by electrolytic means. There's also pyrolysis, etc.

It's about looking at the overall mix and thinking about how many tonnes we want to produce, for example, for 2025, 2028, 2030 and 2050. When will the hydro plant come in and what do we need before then? Then work backwards.

I know companies like Hydro-Québec are looking at the whole mix of the options in Quebec. Right now, Quebec is leading the charge, if you will, in the production of hydrogen from electrolysis.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you very much for your testimony.

We believe very strongly in the power of hydro. We also welcome with great enthusiasm the Premier of Quebec's intention to relaunch major projects. They aren't just about building brand new plants. It could also be other plants that would be added to existing ones.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Go ahead, Mr. Duguid.

[Terry Duguid, Liberal, Winnipeg South, MB]

Thank you, Mr. Chair. Thank you to all of our witnesses today.

My first questions are for Ms. Vera-Perez.

You referred to the right set of enabling policies in order to scale up hydrogen production. You only had three minutes to amplify on that, so I'll give you the opportunity to give us a little more detail. While you're doing that, perhaps you could reflect also on the Inflation Reduction Act and some of the gaps you see between Canada and the U.S. and the threats to our competitiveness.

These are issues that have come in with this committee repeatedly.