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Key areas of focus

While Canada has abundant feedstocks, established companies, and the know-how to build a hydrogen economy, there are a number of challenges still to overcome. Through the research and consultations that led to the Hydrogen Strategy for Canada, as well as the working groups that supported the implementation of its recommendations, the Progress Report highlights key areas of focus to further advance the hydrogen opportunity in Canada.

Production projects economics and competitive policy

Large, up-front cost differentials on both the production and end-use sides and risk aversion to new technologies impede early adoption. Projects are looking to lower production costs in order to secure offtake agreements and reach investor certainty required for final investment decisions. Maintaining a competitive policy framework through implementing key policies such as the Clean Hydrogen Investment Tax Credit, regulatory streamlining (where appropriate), supporting innovation, and unlocking infrastructure or safety considerations, are all key areas of focus that will help project economics and investor certainty.

Hubs and corridors and end-use deployment

Hydrogen will play a key role in decarbonizing hard-to-abate sectors, especially where alternatives are unavailable or limited, such as in long-haul trucking, urban transit, or heavy industry sectors like steel, chemical, and refining. Deployment of hydrogen in these applications, especially as part of hubs and corridors, will support the establishment of a domestic market, and show how hydrogen can provide greenhouse gas emission reductions.

Hydrogen hubs and corridors are regional networks of hydrogen producers and consumers linked by connective infrastructure. They are developing across Canada, but many are still at an early stage. Hubs and corridors will benefit from support to understand the market and GHG reduction opportunities in their regional area and continuing to build connections among supply and demand projects to become self-sustaining and to achieve scale necessary to efficiently lower costs.

Codes and standards

Gaps in existing codes and standards need to be addressed to enable greater adoption of hydrogen and hydrogen technologies. The ongoing development of codes and standards across the vast and varied hydrogen value chain is a multi-year process that requires persistence and coordination among multiple levels of government, industry, and utilities, as well as international coordination.

Awareness and market data

There remains a limited understanding of the potential of hydrogen as a low-carbon energy opportunity to decarbonize and support economic growth in households in Canada. This lack of awareness can result in low confidence in the safety and transformative potential of hydrogen. The landscape surrounding hydrogen is complex. Ensuring that hydrogen is widely understood and embraced, with robust and thorough market data, will facilitate swift deployment once all necessary legislative frameworks are in place. 

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