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Canada’s hydrogen sector looks forward to working with the Government of Canada on the next steps of the 2023 Fall Economic Update

Nov, 23 2023

OTTAWA, ON – Canada’s hydrogen sector looks forward to working with the Government of Canada on the next steps of the 2023 Fall Economic Update

Canada’s Finance Minister, the Honourable Chrystia Freeland, tabled the federal government’s Fall Economic Statement (FES) yesterday to provide an update on the federal government’s finances, as well as to introduce new measures reflective of the government’s priorities.

The Canadian Hydrogen and Fuel Cell Association (CHFCA) President and CEO, Ivette Vera-Perez, had the pleasure of attending the embargoed reading of the 2023 Fall Economic Statement, where she had the opportunity to engage in discussions with members of the federal government regarding the next steps in the implementation of the Clean Hydrogen Investment Tax Credit (ITC).

The federal government has committed to introduce implementation legislation to deliver and implement a Clean Hydrogen ITC within an aggressive time frame. The timeline for the legislation on the clean hydrogen ITC is as follows:

  • Consultations on draft legislation will be launched this Fall.
  • The Government of Canada is targeting to introduce legislation in Parliament in early 2024.
  • The hydrogen ITC would be available retroactive to March 28, 2023.

The specificity of the timeline for the legislation provides some level of certainty. With an ambitious timeline to deliver and implement the proposed ITC for clean hydrogen, the CHFCA and its members look forward to participating in the consultation once the draft legislation is made available.

The FES provides the following details with respect to the main design elements of the ITC:

  • The FES proposes that the property required to convert clean hydrogen into ammonia be eligible for the ITC, provided that several conditions are met.
  • The FES addresses the treatment of carbon intensity measures as they relate to projects with power purchase agreements or those using renewable natural gas.
  • The FES provides clarification on the initial project carbon intensity assessment, verification, and validation.
  • The FES explains the compliance and recovery requirements for clean hydrogen projects.

Additional details on these design elements of the ITC, which are crucial for the sector, will be announced at a later date.

The CHFCA was pleased to see the announcement of delivering the Canada Growth Fund, which commenced operations in the summer of 2023. The Canada Growth Fund will be the principal federal entity issuing carbon contracts for difference and will allocate, on a priority basis, up to $7 billion of its current $15 billion in capital to issue all forms of contracts for difference and offtake agreements.

Ivette Vera-Perez spoke about the fall economic update:

“The Government of Canada has an ambitious timeline for introducing the Clean Hydrogen ITC. The CHFCA is well-positioned to actively support and collaborate in the forthcoming consultation stages, ensuring the efficient design and implementation of the Clean Hydrogen ITC. Our members are eager and ready to contribute, showcasing our commitment to success in this accelerated timeline.”

Canada’s recognition of the clean growth potential of hydrogen has grown over the past three years, and, subsequently, so has the support for clean hydrogen, which includes the launch of the Hydrogen Strategy for Canada in 2020, along with the commitment to deliver clean economy incentives and other budgetary commitments. Provincial governments have expressed their commitment to hydrogen, including the release of hydrogen roadmaps in Alberta, Ontario, and Quebec.

In October, the CHFCA and its members hosted the sector’s second Hydrogen Day on the Hill in Ottawa to meet federal officials and discuss regulatory, policy, and funding support for clean hydrogen.

The CHFCA, and its members are committed to continuing to work together to ensure that Canada maintains its global competitiveness and achieves its clean growth objectives, including Canada’s 2025 hydrogen export goals, the 2030 targets set out in the national Hydrogen Strategy, and our Net Zero commitments for 2050.

 

About the Canadian Hydrogen and Fuel Cell Association (CHFCA)

The Canadian Hydrogen and Fuel Cell Association (CHFCA) is a national sector association that supports industry, academia, government agencies, financial organizations and other stakeholders focused on hydrogen and fuel cell technologies and products. As the collective voice of Canada’s world-leading hydrogen and fuel cell sector, the CHFCA’s mission is to strengthen Canadian leadership, raise awareness of the benefits of the technology, and accelerate the adoption of its members’ products and services in Canada and abroad. The CHFCA currently has more than 200 members across Canada and regional branches in British Columbia, Alberta and Quebec. The CHFCA can be followed on LinkedIn at @CHFCA, Twitter at @PoweringNow and visited at canadah2.ca.

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