Natural Resources Committee on April 26th, 2021

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

It's very poor. I don't know if your connection can be rectified, Ms. Johnson, but maybe you can have somebody else answer that question.

[Mollie Johnson]

Absolutely.

[The Chair, Liberal, James Maloney]

Yes, it's very choppy.

[John Moffet]

Maybe I could jump in.

[The Chair, Liberal, James Maloney]

Okay. Do you want to try?

[John Moffet]

You have raised a couple of really important issues.

One is a repeat of the question about whether increased incentives for biofuels will have an impact on what we use our crops for and on their availability for food.

The clean fuel standard has explicit criteria built into the regulations such that we will not provide credits for crops or forestry products that displace or expand into high-biodiversity areas. We have seen no impact over the last decade, as my colleague from Agriculture and Agri-Food indicated, and we don't expect to see that kind of an effect. What we do expect to see is more efficient use of the kinds of wastes that you talked about.

Now, not all wastes will—

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Excuse me, but if you're talking about using something like mustard seed or canola, and you're saying that's not displacing—

[John Moffet]

No, it's not, because it's—

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Well, canola is used, as you know, for food around the world. We export it for uses as food around the world, so how can you say that?

[John Moffet]

It's because we already have an established supply of canola for this use. We are exporting a lot of it for the production of clean fuels. We want to use that production in Canada. We're also going to use crop waste more efficiently. We're going to use forestry waste more efficiently.

To your second point, absolutely we will not be able to obtain all waste efficiently. That's why, again, we come back to the importance of life-cycle analysis. The tools we are using and are developing will account for the full emissions associated with producing, acquiring, processing, and then using those fuels. There will be a scale of fuels that are ranging from virtually zero to very high emissions—

[The Chair, Liberal, James Maloney]

Thank you, Mr. Moffet.

[John Moffet]

—and all incentives will be focused on the lowest life cycle as possible.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Zimmer.

Mr. Lefebvre, we go over to you.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

My thanks to all the witnesses for being here.

It's very interesting. It's a very important topic in light of what's happening in the environment. At the same time, the spotlight is on the economy. We want to ensure that, as we transition, our low-carbon energy will meet the economic needs and allow us to reach our 2030 and 2050 targets.

I've had the pleasure of sitting on the panel at the Clean Energy Ministerial in my past life as parliamentary secretary to the Minister of Natural Resources, with respect to hydrogen, and listening to world leaders and looking at Canada as a world leader in this sector.

It was interesting, because in our history in Canada back in the 80s, with Ballard, I recall watching the news with my dad back then and hearing about these new hydrogen fuel cells and how they would change our world. Here we are today, 30 years later or more—I'm dating myself here—and still, because of the ebbs and flows of hydrogen that have gone on over the past decades, people are looking at Canada as a world leader in this sector.

Either Ms. Johnson, if she's still there, or Mr. Hoskin, with regard to the economic opportunities for Canada in this sector—not just within Canada, but in the world—why are people looking at Canada? What are the economic opportunities that this represents for us in Canada and around the world?

[Dr. Aaron Hoskin]

Thank you.

My apologies; I think Mollie dropped off. Maybe her house went through a tunnel.

Anyway, the hydrogen strategy points to both economic and environmental opportunities across the entire country. It's a great point. It really positions us to be the world leader for hydrogen and the technologies that use it. We're already providing our technologies to pretty much every country in the world that's deploying hydrogen.

That economic opportunity has changed significantly in the past year. Projections a year ago were that the global market would be about $2.5 trillion, and by September 2020, those projections led to $11.7 trillion. More than 20 countries have released their own hydrogen strategies in the past year as well, backed by more than $80 billion in guaranteed investments and upwards of $200 billion in total investment.

Canada continues to provide the technologies into that market, but countries—you're right—are looking to us to also provide clean hydrogen.

You may have seen about a month ago that we entered into a agreement with Germany to look at opportunities for Canada to provide clean, low-cost hydrogen to the European market. Recent studies show that upwards of 25 to 35 megatonnes of hydrogen could be produced in Quebec, in Canada's east coast, that could be exported into the European market. Again, that's an $11.7-trillion global market.

Similarly, our natural resources—natural gas and petroleum with carbon abatement—can provide sources of large quantities of clean hydrogen, which could be exported into Asia or also into the United States. We're already exporting hydrogen into the United States, which is produced in Bécancour, Quebec, for instance, by Air Liquide. It's low-carbon-intensity hydrogen.

You're right that it's not just the technologies; our companies are exporting their fuel cells. Look at any country in the world that's using hydrogen right now, and they're using Canadian technology: buses in California, in Japan, in Europe; and light rail in Europe. They're looking to Canadian technologies to keep going forward. The hydrogen story has been a Canadian story for more than a century, and we'll keep pushing forward.

[Paul Lefebvre, Liberal, Sudbury, ON]

It's certainly something that I knew, but it was really amazing to be sitting with 20 other countries and hearing them talk about our technology. Sometimes we need to leave Canada, even virtually, to realize the amazing technology and the amazing people we have here, and what they've accomplished and how we are contributing.

The other question I have is very simple.

Mr. Hoskin, again, why is hydrogen important to reaching our 2030 targets and our 2050 targets? I know you mentioned it, but it's so important that in the report we highlight why hydrogen will help us meet our 2030 targets and our 2050 targets. Why is that?

[Dr. Aaron Hoskin]

The hydrogen strategy modelling done for the strategy shows that by 2030, if hydrogen makes up 6% of our energy source, it could drive down emissions by 45 megatonnes. That number will grow by 2050. If hydrogen reaches 30% of our energy source, that results in 190 megatonnes of emissions. That takes into account every production pathway and the average carbon intensity, regardless of production pathway, of that hydrogen over time, so it's 190 megatonnes.

It drives down emissions in those hard-to-abate sectors, industries like steel and manufacturing, and in on-road transportation, especially medium-duty and heavy-duty, as well as mass transit. It's also a key feedstock into things like oil sands upgrading.

As the carbon intensity of Canada's hydrogen mix is driven down, that inherently reduces the carbon intensity of our conventional oil sector as well. It comes with significant emissions reductions across the economy, but also across the country in marine ports, in rail, in mining, in different applications in transportation. It really drives down emissions, but it also presents that economic opportunity.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Lefebvre.

Mr. Patzer, we'll go over to you.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

I'm going to go to Mr. Jurgutis here.

I'm wondering whether there are established targets for how much canola production there's going to need to be in Canada to meet the requirement for this new biofuel standard.

[Steven Jurgutis]

I might turn to one of my colleagues on this as well. I think, in principle, it's not looking at specific inputs or crops in order to reach targets.

There's an opportunity for it to be done partly through canola. However, in terms of looking at it from the lens of the inputs, I think it's not really what the approach would be in order to meet the targets.

I'm not sure whether any other colleagues want to add anything.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Quickly then, what other crops are you considering? Is it canola, corn? Are there others? What are we looking at there? What are the crops that are going to be used to meet this demand?

[Steven Jurgutis]

I would say that certainly the big ones are canola and corn, as you've pointed out, and corn in particular on the ethanol side, but increasingly, as I was talking about as well, it's moving into increasing the amount of input that comes from what we've traditionally been seeing as waste. A higher degree of effort and programming has been put in place to help drive that as well, to make advancements in that area so that we can start to take advantage of those opportunities rather than just the inputs from what would have been seen as some of the more traditional types of commodities.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I guess what I'm trying to get at here is that right now we're growing canola and corn, and farmers also grow a lot of wheat, durum, peas, lentils and mustard. There's a whole other variety of crops that are out there, and those crops are needed around the world, especially when we look at the pulse crops. Overall we provide a majority of that to the rest of the world.

As we pursue biofuels here, how much of those crops is going to be replaced by biofuel stock just simply to pursue clean fuel?

[Steven Jurgutis]

You're right that there are a number of other sources that are being grown and used. To go back to a little bit of the answer that I was providing before, I don't think what we're seeing is much of an issue of trading one for the other in terms of food security or food availability and the opportunity that exists now.

Increasingly, as I said, looking at rendering fats, manure and other opportunities into biogas, you start to see more of the opportunity to meet those targets coming from those additional sources, but, as was stated earlier, not a situation in which we're seeing crops grown for food being displaced in order to meet or be part of a solution to help reach some of those targets.