Hon. Josée Verner: Thank you, minister. In April 2022, the Commissioner of the Environment and Sustainable Development, Jerry DeMarco, concluded in a report that the Hydrogen Strategy for Canada overestimated hydrogen’s potential to reduce our greenhouse gas emissions because “unrealistic assumptions” were used. That’s a direct quote. In testimony before the Standing Senate Committee on Energy, the Environment and Natural Resources in October, Mr. DeMarco explained that this was due in part to the fact that your department had favoured, and I quote, “a transformative scenario that assumed the adoption of aggressive and sometimes non-existent policies.” How would you respond to Commissioner DeMarco’s disturbing findings?

Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: Thank you for the question, senator. It’s an important question, but not a very simple one. With green hydrogen, as some people call it, though I don’t necessarily like to describe it using colours because I think we should talk about the intensity of the carbon emissions during electrolysis instead, choices often need to be made during the process. In other words, we have to decide how we want to use the electricity, and that depends on the circumstances.

The Atlantic provinces want to use wind power to produce hydrogen, but Quebec has a different perspective. Quebec wants to use some hydrogen for domestic use, but it has very little interest in exporting it. As I said earlier, there are other solutions. In Alberta, for example, natural gas can be used to produce hydrogen that doesn’t create much CO₂.

Not all provinces and territories have the same perspective. Of course, we have to make some choices. Electricity costs more than natural gas, which is becoming a more economical choice for now. However, if the cost of electrolysis comes down in the future, this will change.

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Hon. Jonathan Wilkinson, P.C., M.P., Minister of Natural Resources: It’s a great question. I would say that Canada has been doing everything it possibly can to support our European friends and allies in the aftermath of the brutal and illegal invasion of Ukraine. That started with the commitment we made to augment production of oil and gas in this country by 300,000 barrels a day such that we were creating more liquidity in the global market to enable countries like Germany to move away from Russian oil and gas. But it certainly also involves the conversation around hydrogen.

Chancellor Scholz and my counterpart, Vice-Chancellor Habeck, were here for a very important and, I think, successful visit. As you say, part of that was the signing of the memorandum on hydrogen. It relates to Newfoundland and Labrador and also Nova Scotia, which also has very significant aspirations in this area.

The first step is putting in place a regulatory regime to be able to appropriately regulate offshore wind. Some of these projects are starting with onshore, where there is a regime in place, or one can be put into place relatively quickly by the province. Then there is a federal-provincial offshore regulatory piece that we are working on with both of those provinces right now, and we are looking at ways we can do work even as that progresses.

The target is to be in a position to start to ship hydrogen to Germany by as early as 2025, which is not very far away. The Government of Nova Scotia, in particular, has set very aggressive public targets as to what they would like to see with respect to hydrogen going forward. So it’s an area in which I am working closely with both of those provinces and territories.

More generally, hydrogen is an enormous opportunity also for Western Canada, but it will more likely be hydrogen derived from natural gas, with appropriate carbon capture. It is one of those things that Canada can actually do to help energy security around the world.