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13 min ago 2 min read
The Canadian Hydrogen Association (CHA) is calling for projects using electricity from grids with 90% clean generation to automatically qualify for the country’s 40% clean hydrogen investment tax credit (ITC).
Ahead of Canada’s budget release on 28 April, the group said additional power sourcing requirements in clean grid regions introduced “administrative complexity” without “materially improving emissions performance.”
The CAD $5.6bn ($4.09m) clean hydrogen ITC was passed into , offering projects tax credits of between 15 and 40% using a carbon intensity-based structure. But it requires projects to source power from new, additional provincially-matched renewable assets.
Provinces like Quebec, British Columbia, and Manitoba already operate grids that are “overwhelmingly non-emitting”, and projects within them shouldn’t face strict power sourcing rules, CHA argued.
Removing the requirement could lower production costs by avoiding higher-priced dedicated renewable power procurement strategies.
In 2021, hydropower accounted for 60% of Canada’s electricity generation, followed by 14% from nuclear, and 12% from natural gas.
Beyond grid exemptions, CHA called for clean and renewable energy certificates to be recognised as qualifying instruments, alongside technical revisions to hydrogen pathway definitions, heat sourcing rules for high-temperature electrolysis, and carbon intensity treatment post-commissioning.
The association said the changes would improve Canada’s ability to “attract and retain world-class hydrogen investments.”
CHA also proposed a CAD $100m ($73m) fund to support commercialising hydrogen technologies, and renew the country’s hydrogen strategy to position hydrogen as a solution beyond climate.
It said hydrogen should be integrated within the government’s strategic pillars of export diversification, defence, critical minerals and manufacturing, and industrial decarbonisation.
The country had tried to establish itself as a potential green hydrogen supplier to Europe, using its renewable potential to produce low-cost molecules.
However, project momentum has slowed. In February, three giga-scale projects in Newfoundland lost after failing to pay fees, with the province’s energy minister warning the market was “growing more slowly than expected.”
Despite big federal and provincial ambitions for clean hydrogen, Canada currently has fewer than 10 operational clean hydrogen production projects.
