The Canadian federal and provincial governments will award approximately $475 million (CAD) (US$357 million) in project funding for Air Products’ multi-billion-dollar landmark net-zero blue hydrogen energy complex in Alberta. (Earlier post.) The facility, already being executed, will make Edmonton, Alberta the center of western Canada’s hydrogen economy and set the stage for Air Products to operate one of the most competitive and lowest-carbon-intensity hydrogen networks in the world.
Under separate agreements, Air Products will receive:
$300 million (CAD) (US$226 million) from the Strategic Innovation Fund (SIF), the Government of Canada’s program designed to spur innovation for a better Canada by providing funding for large projects and national innovation ecosystems. Air Products’ project funding specifically comes from the Net-Zero Accelerator Program targeting industrial decarbonization in support of Canada's 2030 greenhouse gas emissions reduction targets and its 2050 net zero emissions goal, among other objectives.
More than $160 million (CAD) (US$120 million) from the Alberta Petrochemicals Incentive Program (APIP), part of Alberta’s Recovery Plan to bring multi-billion dollar investments to industrial projects throughout Alberta, add value to natural gas production in the province, and help to strengthen, diversify and bring new life into the province’s economy and create new opportunities and jobs for Albertans.
$15 million (CAD) (US$11 million), which was previously announced, from Emissions Reduction Alberta’s Shovel-Ready Challenge, which aims to help deliver on the province’s environmental and economic goals by investing in clean technology that cuts greenhouse gases, attracts investment and creates jobs in Alberta.
The funding announcement marked the milestone of the successful completion of Memorandum of Understanding agreements referenced in June 2021 when Air Products, and its subsidiary Air Products Canada Ltd., in conjunction with the Government of Canada and the Province of Alberta, initially announced the multi-billion-dollar plan to build the landmark net-zero hydrogen energy complex.
Canada’s clean energy diversification strategy and regulatory framework make clear that hydrogen is a key enabler for carbon neutrality by 2050. Aligned with that vision, Air Products began development in 2018 on the core of this world-scale energy complex in Edmonton, which will begin with a transformative net-zero hydrogen production and liquefaction facility.
Since the initial facility announcement, Air Products has proceeded with engineering, procurement, and construction preparatory site work, as well as marketing the clean hydrogen to be produced. In September 2022, Air Products announced a customer agreement for approximately 50% of the low-carbon hydrogen output from the 165 million standard cubic feet per day hydrogen production complex. This off-take agreement also saw Air Products increase its facility investment from $1.3 billion (CAD) (US$980 million) to $1.6 billion (CAD) (US$1.2 billion), as well as including beneficial engineering enhancements to the production process, further substantially reducing greenhouse gases at the net-zero facility.
The Alberta project relies on a combination of well-established technologies. The showcase facility will have a world scale auto-thermal reformer, carbon capture operations achieving 95% removal, a power generation facility fueled 100% by hydrogen, a 35 tonnes-per-day hydrogen liquefaction facility, a world-scale air separation facility producing clean liquid oxygen and nitrogen, and connection to Air Products’ existing Alberta Heartland Hydrogen Pipeline network for enhanced customer reliability, and phased decarbonization of the entire network.
Dr. Samir J. Serhan, Chief Operating Officer at Air Products, added that as Canada’s leading hydrogen supplier, Air Products is also considering further investments in both existing and new hydrogen facilities in Alberta and across Canada, helping customers improve their sustainability performance while bolstering the hydrogen economy and Canada’s energy transition.
The hydrogen liquefaction facility will play a critical role in the developing hydrogen economy across Western Canada. Hydrogen will help to meet society’s need for sustainable transportation, especially for heavy-duty vehicles where hydrogen excels compared to other technologies. Hydrogen is seen as having a substantial technological advantage over battery electric vehicles in heavy-duty applications due to those vehicles’ duty-cycles, especially in Canada’s extreme climate conditions.
Air Products Canada currently operates three hydrogen production facilities in Alberta, and a 55-kilometer hydrogen pipeline in the Alberta Industrial Heartland. The company also operates a hydrogen production facility, a 30-kilometer pipeline network and a liquefaction facility in Sarnia, Ontario. The company’s excellent safety record includes operating over 1,100-kilometers of hydrogen pipelines worldwide with no incidents.