Mr. Speaker, the 2022 Reports of the Commissioner of the Environment and Sustainable Development to the Parliament of Canada, specifically, Report 3—“Hydrogen’s Potential to Reduce Greenhouse Gas Emissions”, found that Environment and Climate Change Canada, or ECCC, and Natural Resources Canada, or NRCan, had different approaches to assessing the role hydrogen should play in reducing greenhouse gas emissions. Environment and Climate Change Canada expected to achieve 15 megatonnes of carbon dioxide equivalent emissions reductions in 2030 whereas the Hydrogen Strategy for Canada, published by NRCan, projected up to 45 megatonnes. It should be noted that the difference between NRCan and ECCC’s estimated reduction potential is due to the different scope and analytical approaches used by the departments.
To generate the 15 megatonnes reduction estimate, ECCC used the EC-Pro model. EC-Pro is a provincial-territorial multi-regional, multi-sector computable general equilibrium model. It covers up to 50 industries and three final demand categories across all 13 Canadian provinces and territories. It is calibrated to the most recent input-output data from Statistics Canada and energy, or emissions, data from the Energy, Emissions and Economy Model for Canada, or E3MC. ECCC focused on modelling the Hydrogen Strategy as one of the many policies and measures announced in Canada’s strengthened climate plan and used a proxy, a 7.3 percent hydrogen–natural gas blending mandate, to incorporate potential emissions reductions from hydrogen.
As noted by the Commissioner of the Environment and Sustainable Development, NRCan looked at a transformative scenario where hydrogen could fill the gap in energy demand not met by other decarbonization means, such as electrification, biofuel, and emissions offset for fossil fuels. The Transformative Scenario was meant to represent the potential size of Canada’s hydrogen opportunity if bold action is taken in the near term. NRCan commissioned a third-party consulting firm, ZEN and the Art of Clean Energy, or ZEN, to undertake modelling for the Hydrogen Strategy for Canada. Together with the Institute for Breakthrough Energy + Emission Technologies, the modelling explored the potential role that hydrogen could play in Canada’s energy future including exploring issues such as hydrogen demand, deployment and emissions reduction potential for hydrogen use across all sectors of the economy, in the context of Canada’s net-zero climate commitments. ZEN’s modelling, which took a regional approach, considered six broad end-uses covering all aspects of the economy, namely transportation, the built environment, several industrial processes, oil and gas, clean fuels, blending with natural gas. The ZEN modelling estimated that hydrogen could contribute up to 45 megatonnes of reductions by 2030.
In addition to the transformative scenario, NRCan also considered an Incremental scenario, which was based on a business-as-usual approach with lighter policy measures and a slower start to adoption of hydrogen. Under this scenario, the potential reductions from hydrogen were expected to reach 22 megatonnes.