“We’re going down to zero.” 

That’s what Thomas Hörnfeldt, vice president of sustainable business at the Swedish-based steel-maker SSAB, told The Narwhal of his company’s carbon emissions. 

Hörnfeldt spoke to me on a video call from his office in Stockholm, a virtual backdrop of a picturesque Swedish canal flickering behind his office chair. He proudly displays a small piece of what he described as SSAB’s first fossil-fuel-free steel on his desk. 

The company made that sample, no coal needed, a year ago in the basement of a technical university in Stockholm. It’s an early step in SSAB’s commitment to completely eliminate carbon pollution from its steel manufacturing plants.

SSAB, which produces approximately 8.8 million tonnes of steel every year at its production plants in Sweden, Finland and the United States, has invested in technology that uses clean hydrogen in place of metallurgical coal.

Metallurgical coal has long been used to manufacture steel, one of the most ubiquitous materials on the planet. Coal is conventionally used for heating and in chemical reactions to create iron, the essential ingredient needed to make steel. But as the world grapples with the climate crisis, the steel industry’s centuries-old reliance on coal — and its enormous carbon footprint — is being called into question.

According to the World Steel Association, the industry is responsible for between seven and nine per cent of the global emissions created from the burning of fossil fuels. 

With the Paris Agreement setting out global goals to dramatically reduce carbon pollution and limit warming to less than two degrees by 2050, the steel sector is, for many, next up in the push to rethink age-old industries.

“It’s a 2,000-year-old technology that just keeps getting refined,” Chris Bataille, an adjunct professor in energy economics at Simon Fraser University, told The Narwhal. And, he said, the next shift for steel manufacturing may well be away from using coal.

That’s exactly what SSAB is doing. The company announced its plans in 2016, along with two partners. The resulting joint venture, Hybrit, also includes an iron ore supplier (LKAB) and an electricity supplier (Vattenfall) — bringing the major components of steel-making together under one umbrella to use hydrogen instead of coal. 

“This concept has been known in the past and it has been done on a small scale,” Hörnfeldt said. “Nobody has really done this in an industrial environment. And that is what we’re testing right now.”

The first pilot plant launched last summer. The company plans to start shutting down its coal-reliant furnaces in a matter of years.

The plans in Sweden are taking root just as the Alberta government faces widespread backlash for its push to open up the province’s iconic Rocky Mountains and eastern slopes to open-pit mining for steel-making coal.

In Sweden, steel-making giant SSAB has announced plans to eliminate its need for metallurgical coal in its plants by 2045. The company uses hydrogen — produced using clean-energy powered electrolysis — in place of coal, dramatically reducing carbon pollution. With the first fossil-fuel-free steel produced last year, the company now has its sights set on bringing it to market in 2026. Photo: SSAB

‘The world is looking for steel-making coal’: Alberta energy minister

The Alberta government began its fraught push for coal nearly a year ago, when the province’s United Conservative Party government announced it had done away with a 1976 policy that prevented open-pit coal mining in much of the Rocky Mountains. New mines in the region would produce metallurgical coal, used for steel-making. Backlash ensued.

But even as the government back-pedalled, it has maintained its commitment to the idea that there is a prosperous future in the metallurgical coal industry.

“There is a tremendous resource of metallurgical coal in Alberta and the world is looking for steel-making coal,” Energy Minister Sonya Savage said in a press conference in February as she defended her government’s push to expand mining opportunities.

Metallurgical coal mines, Savage added, “can help Alberta businesses meet increasing global demand for steel and provide good-paying jobs for hard-working Albertans.” 

Alberta Energy Minister Sonya Savage has defended her government’s attempt to open up the Rocky Mountain region to metallurgical coal mining, saying “ the world is looking for steel-making coal.” While global demand for steel is expected to increase in coming years, the industry is increasingly looking at ways to move away from coal in favour of technologies that produce far less carbon pollution. Photo: Government of Alberta / Flickr

The International Energy Agency has projected global demand for steel will increase by more than a third by 2050. Steel will, in part, help build new infrastructure such as wind turbines, electric vehicles and high-speed trains in the cleaner, greener global economy envisioned to facilitate the push to net-zero.

As the Energy Transition Hub, a German and Australian partnership, pointed out in a November 2019 report, “new metal [is] central to the zero-carbon transition. Renewable energy, and related technologies such as batteries, rely on steel … and a host of other metals.”

And while the Alberta government says this will mean a boom for the coal industry, not everyone agrees.

Blake Shaffer, assistant professor of economics at the University of Calgary, told The Narwhal  in February the expansion of metallurgical-coal mining in Alberta is an example of the province “chasing the next thing that’s going to die.”

“Rather than staking some economic bets on the growth of metallurgical coal … why don’t we become the leader in green steel-making?” he asked.

While Alberta may be slow to consider his pitch, other parts of the world are moving full-steam ahead.

Metallurgical coal mining, like at this Teck Resources-owned open-pit mine in B.C.’s Elk Valley, has flourished in B.C. and new mines are also currently being proposed in Alberta’s Rocky Mountains. If approved, the Grassy Mountain Mine — unaffected by the government’s “pause” on new projects in parts of the region — could produce as much as 4.5 million tonnes of processed coal per year for 25 years. Photo: Jayce Hawkins / The Narwhal

Coal is the main contributor to the carbon pollution produced with steel

The steel industry is the world’s largest industrial consumer of coal, according to the International Energy Agency.

Steel is an alloy —  a mixture of iron and other metals. Pure iron is hard to find naturally, and coal has long been essential in obtaining it.

The process is technical, but here’s the gist: essentially, coal is heated to super-high temperatures (more than 1,000 degrees celsius) to make a carbon-dense substance called coke. The coke is combined with iron ore — iron and oxygen — in what’s known as a blast furnace. 

Steel-making has conventionally relied on metallurgical coal, which is rich in carbon, in the production of pure iron, essential in steel. The coal is used for heating, but also for a chemical reaction in which a carbon-dense substance called coke, derived from coal, reacts with iron ore to leave pure iron. In the process, carbon combines with oxygen to produce carbon dioxide emissions. The resulting carbon pollution is greater than in any other heavy industry. Photo: Shutterstock

That first part is fairly simple: it’s basic heating. “The heating part is only 20 per cent,” Bataille explained. “It’s the chemical reaction of stripping the oxygen off the iron ore that’s 80 per cent of the work.”

And that’s the part you might need to reach back to high school chemistry class to understand.

In the blast furnace, the coke reacts with the oxygen and “strips it off” the iron ore, leaving melted pure iron, a main ingredient of steel, explained Bataille. It’s a simple chemical reaction that is essential to getting pure iron.

“Then we can combine it with nickel and zinc and chromium and what have you,” Bataille said. “And that’s steel.” That finished product remains one of the world’s most ubiquitous and important building materials, used in nearly every building, vehicle, machine, plane, ship, public transit system and bridge on the planet. 

The problem is this: according to the International Energy Agency, the steel and iron industry produces more carbon pollution than any other heavy industry. 

“If we’re going to actually hit somewhere between 1.5 and 2 degrees, blast furnaces have to be shut down,” Bataille said. 

And SSAB plans to do exactly that.

SSAB plans ‘fossil-free steel’

SSAB has said it aims to be the “first steel company in the world to bring fossil-free steel to the market” in 2026. 

The company added it will be “practically fossil free by 2045.”

“To be perfectly frank, we made this schedule a couple of years ago, and a lot of things have happened,” Hörnfeldt, the vice president of sustainable business, told The Narwhal. “Personally, I believe that this is going to happen much faster.”

“Within the foreseeable time frame, we are going to close down all our blast furnace operations.”

The plan is to use green hydrogen and clean electricity in place of coal in the manufacturing process (more on that later). 

The company has said its goal is to reduce Sweden’s carbon pollution by 10 per cent and Finland’s by seven per cent. 

Hörnfeldt said the first of the company’s four blast furnaces will be shuttered in four years at the latest.

Companies like SSAB have developed plans to eliminate coal from their steel plants. In place of coke, derived from coal, the company plans to use clean hydrogen. Like carbon, hydrogen can also strip oxygen from iron ore to make the pure iron needed in steel-making. But in this reaction, the resulting “emission” is H20. Photo: SSAB

Scrap metal, natural gas also options to reduce coal demand

SSAB and Hybrit are not the only ones looking at ways to decarbonize steel, and hydrogen is not the only proposed technology.

One possibility involves the increased use of recycled steel. According to the World Steel Association, an industry group, steel can be recycled indefinitely, without a reduction in quality.

Since so much of the demand for coal comes from making pure iron, using recycled steel can cut down on emissions. A technology called an electric blast furnace — powered by electricity — can transform scrap steel anew again. 

With clean electricity, the technology can dramatically reduce emissions. According to the World Steel Association, approximately 28 per cent of global steel is produced using electric arc furnaces, though not all of them would solely rely on scrap steel. 

Turning scrap metal into new steel in an electric arc furnace requires electricity, which represents a further opportunity to decarbonize.

SSAB’s steel production in the United States is scrap-based, Hörnfeldt noted, adding that the company plans to switch one of its two U.S. plants to clean electricity next year.

But not all demand for steel can be satisfied with scrap. According to the Energy Transition Hub, “recycled metal is likely to supply much less than half of global demand between now and 2050. … The remainder of metal demand will be met using virgin materials.”

Steel is a durable metal that can be recycled indefinitely, meaning many companies can reduce their carbon pollution by used scrap steel in place of virgin materials. Scrap steel, though helpful in reducing the carbon pollution of the industry, is not expected to be able to fulfill the entirety of the demand for steel in coming decades. Photo: Shutterstock

To decarbonize virgin steel manufacturing, some players in the industry have turned to another idea, involving replacing coal with natural gas.  

“There is a technology called Midrex,” Bataille explained. Back to high school chemistry again: instead of using coking coal, natural gas is used to “rip the oxygen off the iron ore, leaving elemental iron.” Then that iron, produced without coal, can be put into an electric arc furnace, powered by clean energy.

“This is an established technology,” he added. “And it’s much lower [in carbon emissions]. And there are these plants running all over the world.”

But the idea generating the most excitement — thought by advocates to be potentially among the greenest — involves using just hydrogen, like SSAB. Midrex boasts on its webpage that its plants are also poised to pivot to hydrogen.

In that process, hydrogen will strip away the oxygen from iron oxide. The byproducts? The pure iron needed for steel-making and good old H20.

“Consensus is growing that the best way to make steel without fossil fuels is with renewable hydrogen,” concluded the 2019 report from the Energy Transition Hub.

Emissions associated with hydrogen dependent on the way it’s produced

Hydrogen is already being used around the world, but current hydrogen production is geared more for other industrial uses, like refining oil or manufacturing fertilizer.

And clean hydrogen is not currently produced at the scale that would be needed for it to replace metallurgical coal.

Most of the hydrogen produced today is made using fossil fuels, without carbon capture technology. When that’s the case, emissions are lower than using coal, but still nowhere near net-zero. 

To truly get to zero-emission hydrogen, the industry would need to move to hydrogen produced from water through electrolysis and powered by clean energy. That’s what’s known as green hydrogen. 

Hörnfeldt told The Narwhal his company is building a facility to make its own green hydrogen, and Hybrit recently announced it is also building a pilot project that will store green hydrogen 30 metres below the earth’s surface in a rocky cavern.

He added that Sweden’s “virtually CO2-free power grid” — the country relies heavily on nuclear, hydro and wind power — makes the use of green hydrogen easier. 

But for other parts of the world, such as Alberta, there is a middle ground, and that’s what’s called blue hydrogen. It’s still generated from fossil fuels, but with a robust carbon capture and storage plan in place. 

In the Edmonton region, advocates say hydrogen production could catapult Alberta into a leading role in a net-zero economy. Alanna Hnatiw, mayor of Sturgeon County and chair of Alberta’s Industrial Heartland Association, said a major investment in hydrogen could “insulate the market here away from the winds of the global economy.” The region is the subject of plans for a “hydrogen hub” that produces hydrogen from fossil fuels and captures the resulting carbon. Photo: Sturgeon County

According to a recent report from Clean Energy Canada, a climate and clean energy program at Simon Fraser University that works to accelerate an energy transition, Canada is “among a small group of countries with the most potential for producing and exporting clean hydrogen, which could prove particularly useful in decarbonizing industries like steel.” 

It’s something that some Albertans are very excited about.

A grand vision for the province was unveiled last year, with the launch of the Industrial Heartland Hydrogen Task Force. The task force officially launched a so-called hydrogen hub or node in the Edmonton area in April, with the goal of producing blue hydrogen for use locally and for export. 

Advocates are adamant that hydrogen, regardless of whether it’s blue or green, represents a way of making steel that dramatically reduces the carbon footprint of the steel industry. Others worry that blue hydrogen represents a prolonging of the province’s dependance on fossil fuels.

Either way, as more steel-making companies using hydrogen-based methods enter the market, the demand for hydrogen could rise globally.

Steel manufacturers, automotive companies push for green steel

ArcelorMittal, which describes itself as the largest steel manufacturer in Europe, the Americas and Africa, recently announced plans for what it calls the “first industrial scale production” of iron produced entirely with hydrogen, to be deployed at its Hamburg plant, with an annual production of 100,000 tonnes of steel. 

To start, ArcelorMittal, which produced nearly 90 million tonnes of crude steel in 2019, will rely on hydrogen generated from fossil fuels, but the company will switch to green hydrogen as it becomes available and economical. Using hydrogen instead of coal, it has said, is “part of our Europe-wide ambition to be carbon neutral by 2050.”

Then there’s the American startup, Boston Metal. It got its start at the Massachusetts Institute of Technology, and boasts that it is working toward “a world with no pollution from metals production.” 

The company uses a process called molten oxide electrolysis, which skips coal and can make steel straight from iron ore using electricity alone. NASA was an early partner, and is exploring the idea of using the process to produce metals from “lunar resources” for “lunar in-space manufacturing.”

The production of pure iron is responsible for the lion’s share of carbon pollution in the conventional steel-making process. SSAB has predicted its coal-free plants — which produce pure iron, seen here, using hydrogen instead of coal — will reduce Sweden’s carbon pollution by 10 per cent and Finland’s by seven per cent. Photo: SSAB

Here on earth, some companies are starting to demand greener options for their materials. German car manufacturer BMW, which processes half a million tonnes of steel annually in its European plants, has made plans to invest in lower-emission steel. 

“We have set ourselves the goal of continuously reducing CO2 emissions in the steel supply chain,” the company has said in a press release, noting it is “already working with suppliers who use only green power for the steel they produce for us.”

That could mean increased demand for steel from companies like SSAB, which recently announced plans to partner with Volvo on fossil-free trucks. “We can see that the automotive industry in general is really interested in this for the simple reason that we are on the pathway of eliminating tailpipe emissions from passenger cars,” Hörnfeldt said.

“And when you get rid of the tailpipe emissions, then the major environmental impact on the vehicle comes from materials that are used in that vehicle.”

In other words: steel.

Questions about cost competitiveness

There remains a lingering question surrounding the push to manufacture steel using hydrogen. How much will it cost?

Using clean hydrogen is “going to be somewhere between 20 and 40 per cent more expensive than using coal,” Bataille said. 

“We firmly believe that this is going to be a competitive technology over time,” Hörnfeldt said, noting a 2018 SSAB analysis estimated fossil-fuel-free steel would be 20 to 30 per cent more expensive than conventional steel.

“But that gap will close,” he said, explaining the price of fossil-fuel-free steel will go down as the cost of emissions increases. “Coking coal will become more expensive and green energy will become less expensive.”

“All of these things have already happened,” he said.

“The higher the cost of carbon, or carbon price, the more economical these technologies become.”

According to a 2020 report from McKinsey, conventional steel-making companies face economic risks in the near future. The institute cites findings that companies may lose value if carbon pricing outpaces their ability to decarbonize.

Governments, of course, have huge impacts on the feasibility of any form of clean technologies, in the form of carbon pricing.

“What is economical depends on what kind of incentives are available,” Amit Kumar, professor of mechanical engineering and Natural Sciences and Engineering Research Council of Canada industrial chair at the University of Alberta, previously told The Narwhal. “The higher the cost of carbon, or carbon price, the more economical these technologies become.”

Companies that require steel, like in automobile manufacturing, have begun to signal they are looking for lower-carbon alternatives, adding an additional incentive for steel-making companies and potentially driving down costs as demand rises. Photo: Shutterstock

Alberta still eyeing new coal developments as consultation begins

Following months of backlash to the government’s plans to rescind the 1976 coal policy, Energy Minister Sonya Savage announced in March that the province will begin consultation on a new coal policy. 

That hasn’t stopped the pushback, nor has it paused progress on some metallurgical coal mines proposed in the province, such as the Grassy Mountain and Tent Mountain projects. In neighbouring B.C., new metallurgical coal mines are also moving their way through approval processes.

As industry and advocates alike call for the decarbonization of steel, one of the world’s most emission-intensive industries, there are increasing concerns that governments are putting their eggs in the wrong basket.

For Bataille, the energy economics professor, the writing is on the wall. Coal, he said, is a “resource that’s going to be probably going out of business within a generation.”

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It’s been called a “$100 billion opportunity” for Alberta, “a game changer for Albertans” and it’s estimated this new industry could supply nearly a fifth of global energy demand.

In short, there’s a lot of buzz about hydrogen on the Prairies. 

The element, part of every molecule of water and the most ubiquitous element on the planet, has been gaining attention as of late, with increasing calls for it to play a central role in a net-zero economy.

Here’s how hydrogen works: once pure, hydrogen can be burned as a fuel, not unlike natural gas. In this case, it is “burned” by combining it with oxygen, which releases energy, emitting only one thing in the process: water. Hydrogen can also be used to create electricity in hydrogen fuel cells, which share similarities with batteries, but don’t need recharging. Many hydrogen proponents argue the element can displace fossil fuels in sectors for which electrification is difficult. 

While hydrogen does not release carbon pollution when burned, the capacity for this fuel to play a major role in a net-zero economy depends on how it’s produced — whether it’s made from water, using electrolysis fueled by renewable electricity, or generated from fossil fuels. 

“The world is in a hydrogen fervour,” Dan Wicklum, president and CEO of the Transition Accelerator, a Canadian charity advocating for “transformational change,” says on a video call.

The Government of Canada released a hydrogen strategy in December, suggesting “rapid expansion” would “[position] Canada to become a world-leading supplier of hydrogen technologies.” Hydrogen, it noted, could play a key role in helping Canada to meet its obligation to achieve net-zero emissions by 2050.

And Edmonton, right in the middle of Alberta’s industrial heartland, has been pegged as a leader in the charge. 

It’s what Mark Kirby, president and CEO of the Canadian Hydrogen and Fuel Cell Association, hopes will “position Alberta as a clean hydrogen powerhouse.”

Plans are in the works to transform parts of the industrial region in the Edmonton area to a leaping-off point for a new hydrogen fuel economy.

On Wednesday, the Transition Accelerator held a virtual press conference to announce new funding for a “hydrogen hub” from the federal and provincial governments. Minister Jim Carr, Prime Minister Justin Trudeau’s special representative for the prairies, announced $1.2 million in funding to the Transition Accelerator to build on its plans to create “a first of its kind” hydrogen hub in the Edmonton area.

At the same time time, Alberta’s Associate Minister of Natural Gas and Electricity, Dale Nally, announced the provincial government would be providing $450,000 to the project, which he dubbed as critical to expanding the production and use of hydrogen as a “clean, affordable energy source.”

But the verdict is still out on whether a hydrogen economy in Alberta would truly be “clean.”

“There are many caveats,” says Simon Dyer, deputy executive director of the Pembina Institute. “There are places where it has potential and there are places where it doesn’t make sense. It very much depends on the carbon emissions profile.”

Right now, Alberta’s sights are set on using natural gas to generate hydrogen — a plan in which any climate benefits rest entirely on carbon capture and storage, a technology that has so far relied on hundreds of millions in government funding.

So-called blue hydrogen is produced from fossil fuels, namely natural gas, and paired with robust carbon capture technologies. The Redwater Carbon Recovery Facility is already up and running in Alberta, though carbon capture in the province has so far been reliant on government funding to get its start. Photo: Alberta Carbon Trunk Line

Hydrogen could smooth out boom-and-bust cycles

The prospect of a transition to a hydrogen economy is what could be considered a pragmatic approach in the province home to the bulk of Canada’s fossil fuel production. 

Alanna Hnatiw, mayor of Sturgeon County, located north of Edmonton, says hydrogen could help “insulate the market here away from the winds of the global economy.”

Proposals range from blending hydrogen with natural gas in home-heating systems to converting municipal fleets — from garbage trucks to buses — from diesel to hydrogen.

“We’re prepared to bend over backwards to be a lab for innovation.”

“I would love for Edmonton to be the place where we innovate that technology, test that technology, prove that technology and help scale it to the world,” Don Iveson, the mayor of the City of Edmonton, told The Narwhal in an interview.

“We’re prepared to bend over backwards to be a lab for innovation.”

Hnatiw sees the region as ideally suited to producing, exporting and utilizing hydrogen, especially given the skillsets of many workers in the region. But building demand, she said, is as essential as scaling up production.

“It can’t happen soon enough,” she said.

Mayor of Edmonton Don Iveson sees hydrogen as a possible way forward for a province grappling with the changes needed to address the climate crisis. “If there’s a way to bring people back into hope and back into employment in this part of the country, that would mean so much for those families, for our economy, and, frankly, for national unity,” he said, adding a hydrogen economy can use the skills of workers in the region. Photo: City of Edmonton

Hydrogen in the industrial heartland

The use of hydrogen as a fuel — for transportation, heating, industrial applications — is an idea growing in popularity, though it has not yet taken off in a major way. According to the International Energy Agency, hydrogen has “not yet realized its potential to support clean energy transitions.”

And although hydrogen is already produced in large quantities around the world, it is not currently a clean form of energy. At least, not yet. 

According to the International Energy Agency, existing global hydrogen production is responsible for annual carbon emissions equivalent to the combined total of Indonesia and the United Kingdom. “Ambitious, targeted and near-term action is needed,” it has noted, to make hydrogen a viable clean energy source.

And that’s where the idea for a hydrogen hub or node in the Edmonton region comes in. Big plans emerged last fall with the launch of Alberta’s Industrial Heartland Hydrogen Task Force, which outlined the potential for a so-called hydrogen hub or node in the Edmonton area — including the industrial heartland north and east of the city.

Alberta’s Industrial Heartland Hydrogen Task Force envisions the dramatic expansion of hydrogen, produced from fossil fuels and paired with carbon capture, in the Edmonton region. This form of hydrogen production produces significantly less carbon pollution than the burning of natural gas, but emissions are further reduced if the hydrogen is produced instead using clean electricity rather than fossil fuels. Photo: Alberta Carbon Trunk Line

According to a report from the Transition Accelerator, the area already produces more than 2,000 tonnes of hydrogen daily, though it is not used as a fuel, but as part of bitumen upgrading and fertilizer production.

Currently, much hydrogen production in the region is not net-zero. It is produced from fossil fuels and does not necessarily involve carbon capture, an essential element of the Transition Accelerator’s vision for hydrogen in Alberta.

So what is the vision exactly? Advocates are planning for a hub in the Edmonton region that builds on existing hydrogen-production capacity, natural gas reserves, carbon capture and a workforce familiar with similar types of production. 

It’s an idea proponents hope will help transition Alberta from a laggard to a leader on the push to net zero, whilst moving away from the carbon-intensive fuels increasingly shunned by the global investment community.

The Industrial Heartland Hydrogen Task Force has laid out a plan to transform parts of the industrial region in the Edmonton area to a leaping-off point for a new hydrogen fuel economy. Edmonton Mayor Don Iveson envisions “a real possibility of a hydrogen boom” in the area. Photo: Shutterstock

Green, blue or grey?

When used as a fuel, the burning of hydrogen does not create emissions the way gasoline or diesel does, but the production of hydrogen can still be responsible for carbon production.

“How hydrogen is made matters,” the Pembina Institute concluded in a recent report on its potential. “The climate advantage of hydrogen is highly dependent on how it is produced,” the report concluded.

If it’s produced from fossil fuels, hydrogen can still have climate benefits if the carbon is captured or stored, according to Wicklum, who said emissions would be “much much lower” than burning the fossil fuels themselves.

To differentiate between the different ways of producing hydrogen, some in the industry use a system of colours: green hydrogen is produced from water with renewable electricity, blue hydrogen is generated from fossil fuels with carbon capture and storage technologies in place and grey hydrogen is generated from fossil fuels — with no carbon management.

“Right now almost all the hydrogen that’s made in the world, the carbon is going straight into the atmosphere,’ Wicklum says. That’s what’s called grey hydrogen.

“Blue [hydrogen] gives us an opportunity to be part of the global hydrogen economy as one of the first movers,” Hnatiw told The Narwhal.

In Alberta, the economy has long been driven by oil and gas. As Canada works towards its obligation to achieve net-zero emissions by 2050, new energy sources like so-called blue hydrogen are increasingly being eyed as transition fuels. Photo: Garth Lenz

Amit Kumar, professor of mechanical engineering and Natural Sciences and Engineering Research Council of Canada industrial chair at the University of Alberta, explains that to make blue hydrogen, steam is added to natural gas — consisting mostly of methane — to produce a blend of gases, predominantly hydrogen and carbon. The hydrogen can be used as a fuel, but the carbon must be captured to achieve any kind of climate goals.

Iveson, the mayor of Edmonton, thinks that’s feasible.

“There’s sort of science-fiction carbon capture, which is the kind of wing and a prayer cornucopian answer to a modified status quo,” he told The Narwhal. “But we actually do have real working carbon capture here.” 

Iveson pointed to the Shell Scotford refinery in Fort Saskatchewan, Alta., which, he noted, is already producing a lower carbon source of transportation fuel.

That’s because of the refinery’s Quest carbon capture and storage project.  

In that project, the provincial and federal governments invested hundreds of millions of dollars  in a pipeline that captures carbon dioxide from the production of hydrogen (used to upgrade bitumen from the oilsands) at the Shell Scotford complex near Fort Saskatchewan and pipes it, in liquid form, to the County of Thorhild, some 65 kilometres away, where it is buried two kilometres underground, beneath many layers of rock. The company says it will remain “locked in” permanently. 

At facilities like Shell’s Quest carbon capture and storage facility in Fort Saskatchewan, Alta., carbon is captured and stored deep underground. The total amount of carbon dioxide sequestered by Quest surpassed four million tonnes in 2019. Photo: Jason Franson / The Canadian Press

Similar facilities are also operational in Norway, Germany, China and elsewhere.

According to the Government of Alberta, the total amount of carbon dioxide sequestered by Quest surpassed four million tonnes in 2019 and “achieved the record of having stored underground the most CO2 of any onshore [carbon capture and storage] facility in the world with dedicated geological storage.” 

The provincial government has invested more than $1.2 billion in Quest and one other carbon sequestration project in the province. The other project, the Alberta Carbon Trunk Line, is billed as the “world’s largest capacity pipeline for CO₂ from human activity,” and, according to the project, it can transport nearly 15 million tonnes of carbon dioxide annually through a 240-kilometre pipeline, ultimately storing carbon dioxide at the bottom of oil and gas wells that are no longer producing.

It’s this existing infrastructure, and the possibility of expanding on the same idea, that has advocates excited about producing blue hydrogen in the region.

Carbon pricing key to economics of blue and green hydrogen: professor

Any conversation around future energy sources and fuels brings up the same questions about cost. Currently, natural gas is cheaper than hydrogen. And producing hydrogen from fossil fuels is cheaper than producing it from water. 

In the case of the plans in Alberta, producing hydrogen without carbon capture is cheaper than producing it with carbon mitigation in place.

That’s where carbon pricing comes into play.

“The cost of capturing and what is economical depends on what kind of incentives are available,” Kumar, the professor of mechanical engineering, said. “The higher the cost of carbon, or carbon price, the more economical these technologies become.”

Dyer of the Pembina Institute agreed. 

“If the Government of Alberta supports the hydrogen strategy, they should obviously support carbon pricing and the clean fuel standard because those are both supporting policies that will incent clean hydrogen production.”

“There is no light between any level of government on hydrogen,” Alberta’s Associate Minister of Natural Gas and Electricity, Dale Nally, said in response to a question from The Narwhal at Wednesday’s press conference. “There might be a little bit of light between us on carbon pricing. And I would suggest to you that we don’t need to see a price on carbon.”

“Blue hydrogen is absolutely a way for us to leapfrog into a clean, affordable energy future,” he added.

Hydrogen projects in the world

Elsewhere in the world, hydrogen projects are already underway — often with the support of government funding.

Hydrogen is being used to heat homes from Hawaii to Leeds in the United Kingdom.

In Alberta, consumers in Fort Saskatchewan will soon have up to five per cent hydrogen added to the natural gas that heats their homes. (ATCO, the company behind the project, did not respond to The Narwhal’s request for more information.) The International Energy Agency has said that introducing clean hydrogen to replace just five per cent of the volume of countries’ natural gas supplies would “significantly boost demand for hydrogen and drive down costs.”

A 2013 review from the U.S. National Renewable Energy Laboratory, a national laboratory of the U.S. Department of Energy, concluded hydrogen could be safely blended in with natural gas, and distributed through existing infrastructure, at concentrations of up to 20 per cent.

But hydrogen doesn’t stop at heating. 

Toyota has released what it calls the “first mass production hydrogen fuel cell electric vehicle” in 2020. There are hydrogen fuelling stations in B.C. and Quebec, including at Esso/7-11 and Shell gas stations.

Hydrogen fuel cell buses are among the potential uses of hydrogen produced in the Edmonton region. As advocates look to bolster local demand as well as supply, hydrogen feeling stations, hydrogen-powered trains and hydrogen-powered municipal garbage fleets have all been discussed. Photo: Shutterstock

In March, rail giant CP announced it would launch North America’s first hydrogen-powered freight locomotive. It’s part of what CP President and CEO Keith Creel said in a statement would move the company toward zero-emissions locomotives. (A CP spokesperson said by email they could not provide any more information on the project.)

In the Edmonton region, a proposal to build a hydrogen fuelling station for highway-grade fleet vehicles is being evaluated by Natural Resources Canada.

While the hydrogen hub is still mostly an apple in advocates’ eyes, there are already projects being planned that could eventually form part of the Edmonton hydrogen network.

‘There are no silver bullets’

With any new form of energy, there are tradeoffs.

Blue hydrogen, produced from natural gas, means a continued reliance on the production of natural gas, whether through conventional drilling or hydraulic fracturing, also known as fracking. Alberta has long dealt with issues around orphaned infrastructure, unpaid bills and environmental and health risks associated with some gas wells, including fracking-induced earthquakes near Fox Creek, Alta.

Some climate advocates argue that forms of energy that don’t rely on fossil fuels at all, such as wind and solar, should be the focus. “That’s a healthy debate,” Kirby of The Canadian Hydrogen and Fuel Cell Association said. “Whether to perpetuate something that depends on a non-renewable resource.”

Dyer said he believes there’s a role for hydrogen, but that it shouldn’t be viewed as a one-size-fits-all solution. “There seems to be a tendency in the energy world to sort of focus on something and … there are no silver bullets,” he said. 

“We need to implement all our existing solutions and technology obviously and deploy all viable technologies,” he added. “And it does appear that there is some potential for hydrogen to play a role.”

“Nobody is in favour of high carbon intensity hydrogen,” Kirby said.  “I think everybody would like to get to a renewable system,” he said. 

“But if you look at the amount of hydrogen needed and the fact that the cost is a key consideration in adoption rates,” he said, then blue hydrogen, “is a very good pathway to net zero.”

The issue of public investments into any one technology is another question, Dyer added. Critics of large-scale public investments caution that they can amount to governments picking winners and losers in the race to displace fossil fuels.

‘A way to bring people back into hope’

City of Edmonton Mayor Don Iveson sees the hydrogen hub as a way to move forward a province that has long been dependent on, and benefited from, the oil and gas industry.

“As an energy-producing part of the world, we would go through these booms and busts,” Iveson says. “It was really starting to settle in that we had probably had the last boom.”

There is, he said, “a real possibility of a hydrogen boom,” and that could mean bringing employment and investment back to the region in a tangible, sustainable way.

“If there’s a way to bring people back into hope and back into employment in this part of the country, that would mean so much for those families, for our economy, and, frankly, for national unity.”

For Iveson, it’s not just about economic and climate benefits. He also points to the loss of hope many Albertans have felt as the fossil fuel industry has failed to reach the peaks of years past.

“Many Albertans, probably all of us, on some level have been working through the stages of grief about the end of the economy as we knew it, which was very good to us for several generations,” he said.

“And coming to terms with that loss, people go through all of the different stages, from denial to bargaining to anger. And then finally, acceptance. And I think somewhere along the way, you start to be open to the other possibilities that are not an assault or, or an affront to what we’ve done in the past.”

Iveson said he sees hydrogen as a possible way forward for a region struggling to come to terms with the changes needed to address the climate crisis.

“If there’s a way to bring people back into hope and back into employment in this part of the country, that would mean so much for those families, for our economy, and, frankly, for national unity.”

Hydrogen, he said, builds on an energy system that’s already in place in Alberta. “It really leverages a lot of existing expertise, and capacity and infrastructure that’s in place, instead of some moonshot that is a complete pivot from what we’re doing today.”

Updated April 14, 2021, at 3 p.m. MT: This article was updated to include Wednesday’s announcement of new federal and provincial funding for the Edmonton hydrogen hub.

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