Ottawa Releases Flurry of New Announcements on Tree Planting, Hydrogen, Clean Fuels, SMRs

The Trudeau government is continuing its flurry of year-end policy moves on climate change and energy, with announcements earlier this week on hydrogen strategy and tree planting and more news expected today on a narrowed Clean Fuel Standard and small modular nuclear reactors.

Natural Resources Minister Seamus O’Regan got the ball rolling Monday, travelling to a tree nursery in his home community of St. John’s, Newfoundland to announce a C$3.16-billion plan to plant two billion trees across the country over the next 10 years. Calling the long-awaited program, originally promised during the 2019 election campaign, “an endeavour of unprecedented scale and size,” he said the new growth would cover an area roughly twice the size of Prince Edward Island and create 4,300 “good jobs,” The Canadian Press reports.

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“There is no path to net-zero carbon emissions that doesn’t involve our forests,” O’Regan told media. “Trees increase our community’s long-term resilience to climate change. They reduce the likelihood of flooding and the risk of wildland fires.”

Asked how the tree plan and the government’s commitment to net-zero emissions by 2050 matched up with the subsidies it lavished on Newfoundland’s offshore oil industry earlier this month, O’Regan said the two storylines mesh “perfectly”, since “with increased forest cover, you will see greater absorption, sequestration, capture” of carbon dioxide.

(That’s in spite of science showing that climate stabilization depends on keeping the benefits of sequestration through nature-based climate solutions separate from emission reductions to be gained by scaling back fossil fuel production.)

On Wednesday, O’Regan unveiled a hydrogen strategy that includes no specific commitment of federal funds, but calls for $5 to $7 billion in public and private investment over the next five years to build an industry that relies primarily on natural gas for its feedstock, the Globe and Mail writes. The plan envisions a $50-billion hydrogen sector that creates 350,000 jobs by 2050, with industries like long-haul transportation, rail, aviation, mining, oil refining, and steel production depending on the fuel to reduce their emissions.

It sees pilot project hubs emerging over the next five years in Alberta, British Columbia, Ontario, Quebec, Manitoba, the Atlantic region, and along the transportation corridor between Montreal and Detroit, with potential to reduce the country’s annual greenhouse gas emissions by 45 million tonnes by 2030.

“The best way to predict the future is to create it,” O’Regan told a virtual news conference. “Energy is our family business in Canada and this strategy shows us how to grow that business.”

“We know how to do this, because we’re already doing it,” Sturgeon County Mayor Alanna Hnatiw told the Globe Wednesday. “The faster that Alberta and Canada can get into the game, the sooner we will achieve a secure, competitive future for our economy. And that makes our natural resources and environment more sustainable than ever before.”

The success of the strategy “will hinge on billions in near-term investments to ensure Canada doesn’t fall behind other nations also eyeing the low-carbon fuel, though the plan doesn’t put a figure on how much the federal government is willing to throw at the sector,” the Globe says. “Instead, it says tax credits, subsidies, and attracting international investment will help drive the hydrogen sector’s development to 2050.”

The Globe says the strategy points to fossil-derived “blue” hydrogen as “Canada’s cheapest and most easily accessible option for the short-term,” reflecting research elsewhere suggesting the renewably-derived “green” variety will be cost-competitive around 2030. But while the plan implies green hydrogen won’t be ready to scale up to meet the needs of industrial users between 2030 and 2050, it assumes exactly that kind of expansion for carbon capture and storage technologies that have been far slower to hit critical mass.

“Ultimately, the market will decide where best to deploy hydrogen once greater supply becomes available in Canada,” the strategy states. “The two big drivers will be cost competitiveness compared to alternative energy sources that can serve each end use, and decarbonization potential which will ultimately be linked to the economics as carbon pollution pricing reflects the true price of emissions.”

Climate campaigners warned the plan is dangerously dependent on fossil gas, at a time when green hydrogen will be ready for prime time soon enough.

“This strategy, though it leaves the door open for both, really plays up the importance of fossil fuel-derived hydrogen, which from our perspective does not align with a (net-zero) climate pathway,” said Julia Levin, climate and energy program manager at Environmental Defence Canada. Blue hydrogen production depends on expensive carbon capture technologies that are still at a demonstration stage, she added—and government investment in blue hydrogen will amount to a fossil industry subsidy.

“What those investments will do is lock Canada into the continued expansion and production of the natural gas sector and increased emissions,” Levin told the Toronto Star.

David Suzuki Foundation climate advisor Tom Green said the fossil industry should simply have been left out of the federal strategy. “Leaving it in is a lifeline to an industry we know must be wound down as we decarbonize our economy,” he said. “Even with carbon capture, hydrogen from fossil sources implies emissions, and it diverts needed investments from real solutions.”

Alberta ran into similar critiques earlier in the fall, when it released a largely aspirational natural gas strategy that treated hydrogen as a viable end product over the longer term.

Coming up today, Ottawa is expected to publish a new Clean Fuel Standard regulation that has been in development for years, but has been narrowed to focus strictly on liquid fuels like gasoline, diesel, and oil. Other forms of fossil production will be covered by the updated carbon price regime unveiled last week.

The government is also set to release its plan to support development of small modular nuclear reactors (SMRs) that are seen as an essential decarbonization option by O’Regan and the industry, and a “dirty, dangerous distraction” by a growing coalition of local, regional, and national public interest organizations across the country. The global nuclear industry has been losing ground to more affordable renewable energy technologies, with industry analyst Mycle Schneider describing SMRs as “PowerPoint reactors, not detailed engineering”.

[Production note: We’re covering the Clean Fuel Standard and SMR announcements in advance—and giving them short shrift—because this is our last edition of the year before shutting down for the two-week December break. We’ll be back January 5, and we fearlessly predict lots of reporting and analysis on both stories in 2021. Until then, stay healthy and safe, and keep your holiday gatherings small and bubbled!—Ed.]