Thank you for the invitation to speak today.
My name is Ivette Vera-Perez. I'm the president and CEO of the Canadian Hydrogen and Fuel Cell Association, or CHFCA. We are the national voice for the hydrogen sector in Canada, representing approximately 200 companies across the hydrogen value chain.
Canada has always been at the cutting edge of the global hydrogen industry, from the creation of the first electrolyzer over a century ago to the development of a fuel cell cluster, with companies selling their products in 42 countries.
Despite our past leadership, building a hydrogen industry on the scale needed requires calculated yet rapid responses. Canada has announced several tax incentives, including the clean hydrogen investment tax credit, which would help propel the industry to the next level. However, in order to foster the growth of Canada's hydrogen industry, to remain competitive in a new North American landscape and to ensure we meet our ambitious goals—including the government's 2025 hydrogen export targets, 2030 emissions reduction objectives and 2035 transportation decarbonization aims—it is imperative to provide additional direct support to the sector.
Earlier this month, CHFCA members visited Ottawa and met with some of the members of this panel. We made several recommendations to officials, some of which I bring here today.
The first is to establish a Canadian hydrogen office. This office would centralize efforts related to hydrogen projects, ensuring efficient program management and delivery. It would also serve as a valuable resource for businesses navigating regulatory and programming channels, facilitating the advancement of new projects. Other countries' successful hydrogen office models include Germany's, the U.S.'s and Chile's.
Second, dedicate funding to hydrogen development. While existing clean energy funding programs are valuable, we recommend that the government dedicate funding programs to advance Canada's hydrogen industry. This would assist in levelling the playing field for smaller producers and normalize competition among the nascent hydrogen industry and more established ones. As an example, the U.S. just announced $7 billion in bipartisan funding to support seven hydrogen hubs. It is estimated this injection of capital will unlock $40 billion in private sector investments.
Third, streamline regulatory processes. Efficient regulatory processes are essential for the development of clean energy projects. The government should explore avenues to streamline regulations and align standards with key jurisdictions like the U.S. and the EU. While doing so, it is imperative to respect the rights of indigenous communities and develop truly meaningful and impactful partnerships.
Finally, we need timely implementation of tax measures, as Paul just said. The government must quickly implement tax measures that support the hydrogen industry. Investment tax credits, such as the clean hydrogen ITC, offer substantial capex—capital expenditure—incentives for low-emission hydrogen production. Accelerating the implementation of such measures will enhance Canadian competitiveness and encourage the adoption of clean hydrogen production.
Specifically regarding the clean hydrogen ITC, CHFCA recommends that the government include all existing and emerging clean hydrogen production pathways in ITC eligibility—Paul mentioned pyrolysis of methane—and apply the same principle to hydrogen carriers, such as ammonia and others; make grid-connected electrolysis projects eligible for a minimum of 30% ITC, so we can help kick off the sector; seamlessly connect tax credits by drawing a clear boundary between them and ensuring the equipment would be eligible under one or another investment tax credit; provide clarity on the specific tax credit eligibility of common infrastructure not directly linked to the production of hydrogen or ammonia, but necessary for storing and transporting hydrogen; and allow eligibility of all clean hydrogen production facility equipment, as well as the design, engineering, project management, construction and civil capital costs.
In conclusion, Canada's hydrogen industry shows great promise, yet we must now shift from potential into action. The sector can significantly cut emissions, create jobs and drive innovation, but it requires tangible government support. By implementing these strategies, Canada can lead not only in the North American landscape but globally.
With that, I thank you and look forward to the question session.