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Hydrogen 101

What is hydrogen?


Hydrogen is the simplest and most abundant element on earth. It doesn't typically exist by itself in nature and must be produced from compounds that contain it, such as water, hydrocarbons, and other organic matter.

Hydrogen is an energy carrier and is increasingly being considered a vital fuel of the future, primarily due to its high-energy density and zero-carbon emissions at the point of usage. It can store up to three times more energy than other common fuels, such as gasoline, diesel, or natural gas, and produces no carbon emissions when consumed to produce energy. Because it produces only water and energy when consumed, it is considered a “clean” energy.

How is hydrogen produced?


There are different categories of hydrogen based on the different methods of producing it and the amounts of carbon dioxide generated, released, or captured and stored.

  • Grey hydrogen is produced from fossil fuels, primarily natural gas, through a process called methane reforming. In this process, carbon dioxide is produced as a by-product and released into the atmosphere, which is believed to be a significant contributor to climate change. Grey hydrogen makes up about 95% of current global hydrogen production.

  • Blue hydrogen is produced most commonly through steam methane reforming and auto thermal reforming, where either steam, or oxygen and carbon dioxide, react with methane to form hydrogen and carbon dioxide. These methods incorporate carbon capture utilization and storage (CCUS) technologies to reduce carbon intensity, in many cases by up to 80 to 90 percent compared to grey hydrogen.

  • Green hydrogen is produced by electrolysis, a process that breaks water molecules into hydrogen and oxygen when an electric current is run through the water. To be considered green hydrogen, the electricity used must come from renewable sources, such as wind, hydro, or solar. No carbon dioxide is produced thus making the hydrogen climate neutral.

  • Turquoise hydrogen involves decomposition of methane by pyrolysis at very high temperatures. It requires electricity, but 4–7.5 times less than electrolysis depending on the technology used, but no water or oxygen is required. In addition, no carbon dioxide is generated and hence, no CCUS is necessary. Rather, the by-product is solid carbon, a product with high added value. Much fewer input requirements and no carbon emissions combined with a valuable by-product makes turquoise hydrogen a lower cost clean energy alternative.

How is hydrogen used?


Hydrogen can be used in many applications, such as a feedstock for industry, a fuel for vehicles or power plants, or burned for heat. Its use has the potential to drastically reduce carbon emissions.

  • Industry:  Several industries have been using hydrogen to create their end products for many years. Ammonia, which is used in fertilizer, is composed mostly of hydrogen atoms. Refineries use hydrogen to reduce the sulfur content in diesel fuel. It is also becoming a popular feedstock for reducing the carbon dioxide emissions from the steel production process, making it a ready alternative for metallurgical coal. Hydrogen itself can also be burned as a clean, high-temperature heat source for heavy industry applications that currently rely on natural gas.

  • Natural Gas Blending:  Research shows small proportions of hydrogen can be directly blended into our existing natural gas network. Today, this blend can be adopted into most natural gas applications such as home heating, high grade heat for industry, and fuel cells and turbines for power generation. Many natural gas power plant manufacturers are designing their systems with fuel optionality in mind.

  • Fuel Cells: Fuel cells use hydrogen to make water and electricity. They are most familiarly used in vehicles but have many applications outside of the transportation sector. They can be used as back-up energy for emergencies, like a back-up generator for a hospital, or for clean, steady electricity, like for a data center. Some fuel cells can even work in two directions – they can both create and consume hydrogen. These “reversible” fuel cells are useful for energy storage.

  • Energy Storage: Hydrogen is an emerging option for long-duration energy storage. Like natural gas, it can be stored for long periods of time and transported to different locations. It can be stored in different sized containers, from small tanks to large underground caverns. Large-scale hydrogen storage can be especially useful for industry because it provides a steady source of hydrogen as a feedstock even if the amount of hydrogen being added is irregular, such as when hydrogen is made during periods of excess electricity.

Why hydrogen?


Hydrogen has huge potential to be the great connector between energy and industry for decarbonization and is on the tipping point of massive market change. It has the potential to abate 6 Gt of carbon dioxide globally.

The three biggest areas of impact for clean hydrogen are as a clean heat source for industry, a clean substitute for the grey hydrogen already used in industrial processes, and heavy-duty transportation.

Cost reductions through technological advancements and increasing concern over mitigating the effects of climate change have caused more countries to pay attention:

  • July 2020: The U.S. Office of Fossil Energy and the European Union released their Hydrogen Strategies;

  • September 2020: The U.S. Department of Energy released its Hydrogen Program Plan;

  • December 2020: Canada released its Hydrogen Strategy.


The main goals of Canada's Hydrogen Strategy are:

  • Canada will create regional hydrogen hubs domestically to take advantage of different regional strengths for hydrogen production and utilization opportunities. In April 2021, Canada launched its first hydrogen hub just outside of Edmonton, Alberta.

  • By 2050, clean hydrogen will deliver up to 30 percent of Canada's energy, reducing up to 190 Mt carbon dioxide equivalent per year.

  • Canada will become one of the top three producers of clean hydrogen globally by 2050. 

  • Canada will capitalize on hydrogen export opportunities and become the world's hydrogen supplier of choice.  

Why is hydrogen a major opportunity for Canada?


Canada is currently one of the top 10 hydrogen producers globally, with over 3 million tonnes of annual hydrogen production, providing an excellent base on which to build out clean hydrogen infrastructure. In addition, it has a remarkable mix of natural and energy resources that provide myriad opportunities for clean hydrogen using diversified technologies. These include: hydrogen from natural gas where geology supports CCUS, such as in northeast B.C., Alberta, and Saskatchewan; hydrogen from electrolysis using nuclear power particularly in Ontario; and hydrogen from electrolysis using renewable power where this is abundant, such as in B.C., Manitoba, and Quebec.  

The combined potential of Canada’s domestic hydrogen markets and export opportunities to the U.S., Asia and Europe could reach $100 billion per year, according to Transition Accelerator, a Canadian non-profit focused on net-zero solutions.

Canada’s domestic hydrogen demand could rise by 14 MT to 25 MT per year, compared to current production of about three MT per year, according to BMO Capital Markets. Including export markets, potential could exceed 30 MT to 60 MT per year.

Adding to the opportunity, Canada is already recognized as a competitive player in clean hydrogen production, with the second-lowest costs in Asia-Pacific Economic Cooperation (APEC) forum countries.

The price to produce emissions-free hydrogen in Canada using natural gas and CCUS is second only to natural gas and CCUS in Russia, according to a 2018 report by the Asia Pacific Energy Research Centre.

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