Canada: A New Canadian Zero-Emission Vehicle Strategy And The (Re)Emergence Of The Hydrogen Fuel Cell Electric Vehicle

Last Updated: November 29 2017
Article by Daniel Brock and Robin Edger

In May 2017, Federal Transport Minister Marc Garneau launched the development of a federal zero-emissions vehicle (ZEV) Strategy. The ZEV Strategy is part of Ottawa's Pan-Canadian Framework for reducing greenhouse gas emissions to 30 per cent of 2005 levels by 2030. Transportation accounts for one quarter of the country's total GHG emissions, mostly from cars and trucks. The ZEV Strategy would canvass options for addressing the key barriers to the greater deployment of ZEVs in Canada, including ZEV supply, cost and benefits of ZEV ownership, infrastructure readiness, public awareness, and clean growth and clean jobs.

The timelines to produce a ZEV Strategy were short. An Advisory Committee of two-dozen experts from the auto sector, academia, NGOs and federal, provincial and territorial government officials was quickly struck and tasked with developing a plan to significantly reduce GHG emissions by appreciably increasing the adoption of ZEVs. In Mid-September the Advisory Committee completed a first draft of the ZEV Strategy. The plan now heads for a round of consultation among senior federal and provincial officials with an announcement expected early in 2018.

At the time of its launch, the ZEV Strategy was to consider all avenues for reducing GHG emissions from transportation. Nothing was off the table, and the government hoped it would build on existing policy and programs. The 2017 federal budget had allocated $120 million for Natural Resources Canada to deploy infrastructure for alternative fuels and EV charging stations. Ontario, Québec and British Columbia offer consumers ZEV purchase incentives. Minister Garneau, however, did suggest that it was unlikely a national ZEV Strategy would follow the leads of governments in Québec and California and require automakers to sell ZEVs at certain established and increasing levels - the so-called mandatory ZEV mandate. Under a ZEV mandate automakers are assigned "ZEV credits," which represent the company's sales of electric cars and trucks. Automakers are then required to maintain ZEV credits equal to a set percentage of non-electric sales.

ZEV mandates are not a preferred approach among automakers which argue that broadening direct consumer-level incentives, both financial and non-monetary, to increasing ZEV adoption in the marketplace is the most effective pathway.  These incentives include robust vehicle purchase rebates, preferred parking, lower registration fees, access to high-occupancy vehicle lanes, supported by aggressive public awareness campaigns.

The Québec ZEV mandate requires automakers to generate credits equal to 3.5 per cent of sales for model year 2018, rising annually to 6.9% in 2020 and 15.5% in 2025. Currently under one per cent of Québec car sales are electric.  In California, automakers are required to maintain ZEV credits equal to 4.5 percent of sales in 2018, rising to 22 percent in 2025.  There are also restrictions on the amount of credits that can come from 'transitional' ZEVs that still have an internal combustion engine. In 2018, plug-in hybrid vehicles (PHEVs) can only account for 55 percent of credits, meaning at least 45 percent must originate from battery electric vehicles (BEVs) or hydrogen fuel cell vehicles (FCEVs). PHEVs are not eligible for ZEV credits in Québec. By contrast to Québec and California, Ontario has recently adopted a voluntary approach to help the province reach a ZEV goal of five per cent by 2020.

It remains unclear at the end of 2017 whether the federal government will hold fast to its pledge not to make mandatory for automakers the sale of ZEVs in Canada.  Nevertheless, there is a clear policy direction being adopted in Canada's largest vehicle markets to promote a wider adoption of cars with zero emissions.

ZEVs and the Hydrogen Powered Electric Vehicle

The centerpiece of a new ZEV Strategy for Canada will be the available ZEVs and related technologies. To be zero-emission, a vehicle must run on a battery. Of these there are two types available today: Battery Electric Vehicles (BEVs) or, the lesser known hydrogen-powered fuel cell electric vehicles (FCEVs). Though not currently available in Canada, FCEVs are poised to be an important ZEV option in the Canadian vehicle market.

Several automakers are leading the field in the development of FCEVs including Toyota, Hyundai, Honda, BMW, Kia, and Mercedes-Benz. Collectively, these companies have invested, billions of dollars in development of hydrogen fuel cell vehicles and the technology to mass-produce them cost-effectively. These clean, zero-emission vehicles are market-ready and being deployed in jurisdictions around the world where hydrogen fueling infrastructure is available. Hydrogen fuel cell-powered vehicles are electric vehicles - they have no internal combustion engine - that generate electricity onboard while in use. This is in contrast to the plug-in electric vehicles, which draw electric power from a battery previously charged.

Hydrogen gas carried onboard in pressure cylinders is supplied to the fuel cells, where the hydrogen bonds with oxygen to form pure water. This process produces electricity – silently and safely – which is the primary source of power for all of the vehicle's systems. A FCEV currently can drive much longer distances (400-600 km) than a plug-in electric vehicle because the amount of energy that can be stored in an EV battery is much less than the storage capacity of a FCEV's on-board hydrogen. And, when the hydrogen gas needs to be replenished, the FCEV can be refueled as quickly as filling up a conventional car with gasoline.

The experience of owning and operating an FCEV is quite similar to a gasoline-powered vehicle. They do not plug in to charge a battery, yet they are fully electric vehicles and zero-emission. Currently, FCEVs are more expensive to build than conventional gasoline - or diesel-powered cars, but less costly than plug-in electric vehicles. It is estimated that the 2015 incremental cost of FCEVs and plug-in electric vehicles compared to a typical car were approximately $6,000 and $12,000 respectively. But these costs are projected to drop as the technology evolves.  Between 2030 and 2040, the difference in costs between FCEVs, plug-in vehicles and highly efficient internal combustion engine-powered cars is estimated to be negligible. Despite the cost advantage of FCEVs compared to plug-in vehicles, they face a more formidable barrier: a lack of hydrogen fueling infrastructure.

Currently, there are over 5000 FCEVs in active use on the roads worldwide as private passenger cars, mostly in France, Germany, Japan, and California. In heavy-duty and industrial applications, such as buses and forklifts, there are more than 8,000 vehicles in the U.S. alone. The market is projected to expand swiftly as a hydrogen fueling network is built.  For example, in California alone, automakers have plans to deploy more than 40,000 FCEVs by 2022. In the absence of the necessary infrastructure, however, the potential of FCEVs cannot be realized.  In Canada, there is currently only one publically accessible hydrogen fueling station, and three additional stations will be built with the help of funds from the federal government. Hydrogenics Corporation, based in Ontario, will receive $1.6 million in federal government funding this year to build two hydrogen fueling stations in the Greater Toronto Area.  Hydrogen Technology and Energy Corporation, based in British Columbia, will receive federal funding this year to build one hydrogen fuelling station in Vancouver.  None of these stations are connected to the dedicated deployment of FCEVs in the Ontario or BC markets.

The hydrogen fueling networks that are currently operating elsewhere have received government support. In France, there are 26 publicly accessible stations either complete, in construction, or with funding for construction secured. In California, the State has allocated $100M to help fund the construction of up to 100 stations and to support operational and maintenance expenses.  In Germany, the government is supporting a plan to build a national network of 400 hydrogen refueling stations by 2025.

ZEV Strategy and FCEVs

Canada cannot be confident about meeting steep reductions in GHG emissions from transportation without a firm commitment to ZEVs generally, and FCEVs in particular. Authoritative, comprehensive analyses of decarbonization pathways within the transportation sector have found that the chances of achieving meaningful GHG emissions reduction are more successful if multiple pathways are supported. Assessing the scope of Canada's commitment may have to wait until the release of Canada's new ZEV Strategy, and the place within it of FCEVs and hydrogen refueling infrastructure.

As such, significant initial federal and provincial investment in hydrogen fueling infrastructure should be directed to the deployment of publically accessible fueling outlets in Québec, Ontario and British Columbia. It will take this sort of investment to make Canada a world-leading jurisdiction for the deployment of clean, zero-emission FCEVs. Given our understanding of the various ZEV technology options, once the barrier of the lack of hydrogen fueling infrastructure is removed, FCEVs will be poised to be an important part of Canada's ZEV marketplace.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions