The global energy industry is abuzz with hydrogen. Despite being one of the simplest elements on the periodic table, it has quickly emerged as one of the industry’s most attention-grabbing developments. The potential for “green hydrogen,” or hydrogen produced from renewable energy sources, has captured the interest of players all along the value chain — from major oil producers such as Aramco and ExxonMobil to tech startups, chemical companies, venture capital and local political leaders.

Green hydrogen has potential as both a transportation fuel and for use in the chemical industry. While the truth is that converting our transportation systems to running on renewable hydrogen fuel is an incredibly far-off goal, recent technological advancements have helped secure a more tangible future for renewable hydrogen in the chemical industry. In particular, Canada has played a key role in the development of hydrogen’s commercial viability and is well-positioned to benefit from the increased opportunities and investments that it will bring.

Much of the discourse surrounding both the public and private sector’s interest in hydrogen has been focused on its role as a renewable fuel for transportation, but the truth is that the markets for this are small, and the costs are still high. However, hydrogen already has an established market in the chemical industry. Green hydrogen can help transform chemical production and decarbonize this high-emissions sector. Its applicability and potential there have been grossly underappreciated.

For example, chemical companies need hydrogen to make ammonia for fertilizers. Fifty-five percent of all the hydrogen currently produced is used to make ammonia. Currently, most ammonia is produced via steam methane reforming (SMR). This process uses a fossil fuel feedstock (natural gas, coal, naphtha, petroleum coke or heavy fuel oil) and extracts hydrogen from it. Not only is this process energy-intensive, but it also releases carbon dioxide and other harmful pollutants into the atmosphere. Many chemical companies want to decarbonize and reduce the harmful emissions they produce while continuing to make products, like fertilizers, that our modern society needs. Utilizing hydrogen produced using renewable energy as opposed to fossil fuels would further this goal.

In Canada, hydrogen’s use in the chemical sector has been a central component of the country’s ambitious energy strategy. March 2024 saw the signing of a memorandum of understanding (MOU) between Canada and Germany to accelerate the commercial-scale hydrogen trade between the two countries. The MOU designates Germany’s H2Global Foundation to facilitate commercially binding contracts between Canadian green hydrogen producers and German chemical manufacturers seeking supplies of green hydrogen.

The government support for developing a green hydrogen supply chain between North America and Europe is already bearing fruit. An American company, Pattern Energy, is developing a 300-megawatt (MW) wind farm in conjunction with the Canadian Port of Argentia in Newfoundland. Their joint operation, Argentia Renewables, will produce green hydrogen and use it to manufacture ammonia. A German company, Mabanaft, has already signed a letter of intent to purchase and import the ammonia to its plants in Germany and is even considering investing in the company.

Some of the most exciting innovations in hydrogen also have the potential to transform Canada’s Atlantic Coast into a hub of renewable hydrogen production, particularly through the installation of cutting-edge floating hydrogen production platforms in offshore wind farms. These platforms attach to wind turbines and contain electrolyzers that use wind power to produce hydrogen from desalinated seawater. The hydrogen can then be funnelled into a pipeline and transported to shore or piped directly into a ship for export. Several companies have been testing such platforms with offshore wind turbines since mid-2023 with promising results.

The green hydrogen industry is quickly becoming a reality, and Canada’s ongoing success reflects the transformative potential of this new resource. However, investors, entrepreneurs and politicians must remain focused on the opportunities in front of them and not the far-reaching and alluring ideas that have unfortunately captured the media’s attention.

The partnership between Canada and Germany is undoubtedly a positive sign of current priorities, and the upcoming Hydrogen Americas Summit in Washington D.C., will provide more opportunities to build the kinds of international partnerships needed to vault green hydrogen into reality.

Green hydrogen can help transform chemical production and decarbonize this high-emissions sector, writes Ellen Wald.

Hosted by the Sustainable Energy Council on June 11-12, this expert-led event will showcase leading developments in the hydrogen industry and facilitate the kinds of partnerships between government representatives, industry leaders and corporations that can make green hydrogen a profitable and worthwhile global industry.

Ellen Wald is a fellow at the Canadian Global Affairs Institute as well as the president of Transversal Consulting, a global energy and geopolitics consultancy. She is the author of Saudi, Inc., a history of Aramco and how the Saudi royal family controls this multitrillion-dollar enterprise.

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I agree that green hydrogen is best to be used as an ingredient to the chemical and manufacturing industry rather than an energy carrier. The problem is that hydrogen is particularly tricky, and expensive, to transport. Economically, it is best made where it is consumed. Environmentally, green hydrogen is not very green after it has been transported 1,000's of km via ships burning heavy fuel oil.

True. But the total emissions from transporting H in the form of ammonia by tanker is far, far less than transporting oil, coal or LNG when the fossil cargo is burned at the destination. The emissions decrease is huge.

Germany is scrambling to decarbonise. It took a war and mass murder near its eastern doorstep waged by its main supplier of gas, oil and coal to wake up a government that was for decades lulled by Russia's cheap fossil energy that powered the world's third largest economy.

Half of Germany's energy now comes from renewables, which inlcludes green H from Sweden and Canada. Several German industries are switching from gas to electricity and, in part, H.

There should be a natural partnership between German investment in mainly wind power in Canada's eastern maritimes where wind potential is unfathomly huge. Seimens has been building very advanced wind turbines for decades and has long experience in offshore wind farms, undersea cables and power transmission.

It makes far more sense to use the energy from offshore wind projects locally so that Nova Scotia can get off of fossil fuels.
What if the wind doesn’t Blow? Prof. Mark Jacobson YouTube 2022

True. But exporting renewable power to the continent directly through an expanded grid as well as shipping it to overseas markets in the form of ammonia will bump up the collective transition away from fossil fuels as wel as build a very significant export market on top of electrifying local economies.

Exports may well pay for the local electrification process, not to mention create thousands of local jobs.

In the slightly longer term, I think agriculture would be better off using a lot less chemical fertilizers. But right now, we're making 'em, they use hydrogen, so it's better if it's green hydrogen. So, fair enough. There might be some applications in shipping too. And there's steel, which is a surprisingly big deal. So there is a place for green hydrogen.

Land transportation, fuggedaboutit. Also home heating and stuff. Anyone talking about using hydrogen for like cars and trucks and stuff, or fuel in most other ways, or sending it all over the place in pipelines, is either dreaming or doing one of those greenwashing distraction things, like carbon capture--a strategy designed to confuse issues and create delay, and slow down the transformation to electric which is just hands down way better and is inexorably happening.