As part of an effort to move towards global carbon neutrality, Canada published its 2030 Emissions Reduction Plan in March of 2022 which focuses on achieving net-zero carbon emissions by 2050.1 Working towards a strong economy underpinned by clean technology and innovation, Canada has since developed a Net Zero Accelerator initiative (NZA) and a Hydrogen Strategy.2,3 NZA works in tandem with Canada's Strategic Innovation Fund (SIF).4 SIF supports Canadian innovation projects by providing funding to innovative sectors, such as clean technology and clean resources, through a simplified application process.5
Under NZA, $8 billion of support will be granted to large-scale investments in key industrial sectors across the country.6 On March 18, 2022, Canada released an NZA call to action that targeted industrial decarbonization of high-emitting sectors (Call to Action).7 The Call to Action invited industry leaders to submit project proposals aimed at decarbonizing key sectors of Canada's economy.
Canada's Hydrogen Strategy provides an ambitious framework for actions that seek to solidify hydrogen as a tool to achieve the goals set in the 2030 Emissions Reduction Plan. The Hydrogen Strategy seeks to capitalize on Canada's position as a top 10 hydrogen producer to kickstart new developments contributing to a clean economy.8
On November 8, 2022, Canada released news of significant investments in relation to NZA, the Hydrogen Strategy, and the Call to Action.9
NZA Hydrogen Funding Granted in Alberta
The November 8, 2022 press release announced that Canada will invest $300 million through the NZA to support a $1.6 billion project undertaken by Air Products Canada Ltd. (Air Products Project). Alberta will contribute an additional $161.5 million, and Emissions Reduction Alberta will contribute $15 million as a part of its Shovel-Ready Challenge.10,11 The Air Products Project is a landmark net-zero hydrogen energy complex in Edmonton, Alberta, and will position Edmonton as the center of western Canada's hydrogen economy.12 The Air Products Project is positioned to become one of the most competitive and lowest-carbon-intensity hydrogen networks in the world.13
The Air Products Project will be comprised of an innovative combination of well-established technologies, taking advantage of Alberta's abundant and low-cost natural resources, extensive infrastructure, and highly skilled workforce.14 Among other attributes, the Air Products Project will host carbon capture operations capable of achieving 95% removal, a power generation facility fueled 100% by hydrogen, and connection to the existing Alberta Heartland Hydrogen Pipeline network (Pipeline).15
NZA Call to Action Funding
The Call to Action encouraged industry leaders to engage with Innovation, Science and Economic Development Canada to explore possibilities for projects that bolster the decarbonization of key sectors in Canada's economy. The Call to Action identified Canada's two strategic investment paths:
- Path 1: High-emitting sectors pathway; and
- Path 2: Transformational ideas pathway.
Path 1 is aimed at project proposals that offer significant emissions reductions within the decade. Path 2 is aimed at project proposals that may be in earlier stages of development with long-term potential to set high-emitting sectors on a transformative path to net zero by 2050 or sooner.
In the November 8, 2022 press release, Canada announced that ten projects have been selected to move from the first project assessment phase into the second phase of consideration. In phase two, selected project proponents will present their projects to an interdepartmental panel of experts for further assessment.
The ten selected project proponents are as follows:
- Capital Power Corporation
- ENMAX (Shepard Energy Centre)
- Federated Co-operatives Limited (FCL)
- Strathcona Resources Ltd.
- Lafarge Canada Inc.
- ArcelorMittal Mining Canada G.P.
- Suncor ATCO Heartland Hydrogen Hub
- Alberta Power (2000) Ltd. (Heartland Generation)
- Stelco Inc.
- Dow Chemical Canada ULC (Decarbonization Component)
The selected projects are primarily focused on delivering critical services and materials. Such services and materials include electricity generation, hydrogen production, and iron for the steel industry. Based on the proposals, the selected projects are estimated to reduce GHG emissions by up to 10 million tonnes by 2030. Canada equates this to taking approximately two million cars off the road.16
The mixture of existing and forthcoming provincial and federal government funding provides optimism that Canada may solidify itself as a fierce competitor in a burgeoning global net-zero economy. The potential for cohesive government and industry partnerships supports Canada's strong desire to position itself as an industrial leader in clean renewable fuels and is encouraging for new, clean Canadian investment opportunities and project proponents targeting this space.
The author would like to acknowledge the support and assistance of Bailey Szoke, articling student at law.
1. The Government of Canada, 2030 Emissions Reduction Plan: Canada's Next Steps to Clean Air and a Strong Economy (March 2022), online: 2030 emissions reduction plan : Canada's next steps to clean air and a strong economy.: En4-460/2022E-PDF - Government of Canada Publications - Canada.ca
2.The Government of Canada, Net Zero Accelerator Initiative (March 18, 2022), online: Net Zero Accelerator Initiative (canada.ca)
3. The Government of Canada, Hydrogen Strategy for Canada (December 2020), online: Hydrogen strategy for canada (nrcan.gc.ca)
4. The Government of Canada, Strategic Innovation Fund (June 17, 2020), online: About the program (canada.ca)
6. Supra note 2.
7. Government of Canada, Government of Canada launches call to action targeting industrial decarbonization of high-emitting sectors (March 18, 2022), online: Government of Canada launches call to action targeting industrial decarbonization of high-emitting sectors - Canada.ca
8. Supra note 3.
9. Government of Canada, Government of Canada makes significant investment in Alberta's clean hydrogen sector and outlines next steps to help Canadian industry sectors cut pollution (November 8, 2022), online: Government of Canada makes significant investment in Alberta's clean hydrogen sector and outlines next steps to help Canadian industry sectors cut pollution - Canada.ca
10. Emissions Reduction Alberta, Shovel-Ready Challenge, online: Shovel-Ready Challenge: $176 Million Announced for 16 Shovel-Ready Projects Worth More than $2 Billion - Emissions Reduction Alberta (eralberta.ca)
11. Air Products Inc., Air Products to Receive Approximately $475 million (CAD) in Funding for Alberta, Canada Net-Zero Hydrogen Energy Complex from Government Energy Transition Programs (November 8, 2022), online: Air Products to Receive Approximately $475 Million (CAD) in Funding for Alberta, Canada Net-Zero Hydrogen Energy Complex from Government Energy Transition Programs
16. Supra note 9.
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