The role of hydrogen in Canada

Myron: I'd like to welcome everybody. My name is Myron Dzulynsky. I'm a partner at Gowling WLG Canada LLP and I'm the co-Head of our Hydrogen Group together with my UK colleague Gareth Baker. We're very excited to be hosting today's seminar, the Role of Hydrogen in Canada. Who would have known, even a couple of months ago, how many changes that there would be happening in this industry. The industry has been talked about for quite a while but it's been increasing in terms of its development. Every week we see something different, and today we're going to be hearing from a number of people who are in the industry, who will give you their perspectives about the role of hydrogen in Canada. We have a large and diverse audience today and a variety of stakeholders from producers, transmitters, advisors, financiers, governments and others. The broad interests and the broad number of different stakeholders is indicative of the level of interest in this space, currently, as well as the diversity of the stakeholders that are relevant to it. Now about few words about Gowlings for those who don't know us quite as well. We are an international law firm with offices across Canada, Europe, and parts of the Middle East and Asia. We have a very strong sector of focus on energy, technology, environmental innovation. We are a multi-disciplinary group, hydrogen group, more than 65 strong with stakeholders across the spectrum, moving forward in the industry and the needs of our clients. Before I introduce our speakers a couple of words of housekeeping and agenda. Next slide, please.

Here is just a quick listing of our topics which we'll be covering. Hopefully we'll get to all of them. We will plan to do Q&A at the end. If we're really running out of time I may exercise moderator's choice and curtail some of our topics but we'll see how well we can do. This will be a recorded session and it will be available in the next few weeks on the Gowling WLG website. The Q&A button is available for questions during the presentation. We will, obviously, try to address those at the end to what extent we can. If we can't then we'll try to follow up with people by email.

Without further ado I want to introduce our three illustrious speakers. Grant Strem, Joy Roberts and Rob Harvey. We'll start with Grant. Grant's a Calgary born geologist whose experience includes oil and gas production, reserves evaluation and financial modeling and forecasting for large banks. Prior to co-founding Proton Technologies Grant was involved in a number of other interests. He also believes that ... energy tech needs to proliferate as fast as possible and dramatically improve efficiency, cost, environmental performance and energy production.

Next slide. Joy Roberts. Joy and lived and breathed fuel cells for 28 years with a lifetime goal of seeing fuel cell vehicles change the world. Her career has focused on the hydrogen fuel cell industry, expanding multiple Vancouver based companies, working in many different roles in many departments including R&D, product development and prototyping development and through applications that vary from bike lights to automotive to stationary. She has 15 granted patents related to fuel cells.

Finally, Rob Harvey. Rob Harvey's responsible for business development of hydrogen production and fueling infrastructure for large scale fuel cell electric fleets at Cummins. Including commuter trains, buses and delivery trucks. Rob has worked for 20 years in the energy sector, is a fore principal of PHB Hagler Bailly and a consultant all ... as well as star adventurist in waste to energy and bio-gas CHP.

Warm welcome to our panelists and I'll ask each one to speak briefly about themselves and their company, starting off with Grant. Next slide, please.

Grant: Thanks very much. I'll talk briefly about Proton Technologies. It's basically on the production side of things, so the other speakers have more of a use focus, but our goal is to make extremely low cost hydrogen at a carbon intensity that's below zero without any new ecological disturbance. We do that by leveraging existing resources and infrastructure. Next slide, please.

We began selling, right now we're compressing hydrogen into tube trailers, from oil fields in Saskatchewan. Our belief is that we can scale up. Our next scale up will be at approximately 25 cents per kilogram hydrogen, which is rather disruptive, and the amount of resource that we have in the ground, and by that I mean oil and gas resources, where we can do this with zero emissions or actually negative emissions, is quite vast. We're looking at 10%25 of the world's energy supply by 2040 as our goal which is a big goal but we think it's achievable. Next slide, please.

The one thing that people think about, when they think about next zero, they think about wind and solar for example, or wind and solar to electrolysis. If you look at life cycle analysis of anything; the cement, the steel, the abandonment, the transportation, that aspects, there is a non-zero carbon intensity associated with these. So most of the hydrogen production processes out there have a positive carbon intensity but if part of making the hydrogen sequesters large volumes of CO2 you can have a profoundly negative intensity of the carbon. Because of the nature of our process we have many product streams including nitrogen and ammonia, electricity and even potentially, in some cases, we'll do enhanced oil recovery with the extra carbon and heat in the ground. So this allows us to actually have a hydrogen cost that we could potentially give away for free, at large volume, and still the whole thing is profitable. Next slide, please.

There's been a lot of changes, of course, in decarbonization discussions. They've ramped up a lot over the last couple of years. There's been a lot of significant breakthroughs such as carbon fiber over at pressure vessels. There's been a lot of focus decarbonizing the transportation sector, which I think is great, and while this has created a big demand carbon taxes have helped as well to create a huge demand for clean or low or negative carbon intensity hydrogen. There are very few companies who are sort of pure play hydrogen companies out there. Next slide, please.

So our lowest costs competitors seen methane reforming. Sometimes that's done with carbon capture and storage but in all cases they have to start with natural gas and there will be conversion losses in extracting, making a final product of hydrogen, so there will be less energy in the hydrogen resulting from the original natural gas, if natural gas is the source. By contrast we use the oil field itself as a pressure vessel, and it comes pre-loaded with decades of fuel, and it's usually obtainable for free. It's an abandonment liability for someone else. When an oil field is abandoned most of the oil is still in the ground. It's just no longer flowing economically to the well bores. It's very easy to get the oxygen to it. Next slide, please.

What we do is in inject oxygen. So we separate it from the air, inject it into the oil field, it reacts with the oil and triggers reactions that give us huge amounts of hydrogen. So this has been done 500 times around the world, always with the goal of increasing the oil production but hydrogen has, in every single case, been a by-product. So we have some process patents around the whole thing for focusing on the hydrogen side. Next slide, please.

We can also trigger reactions that trap the CO2 in the ground as carbonates and these reactions actually give us extra hydrogen. So what's not to love? We can get the CO2 ... ... than anybody else because we can pull it into our oxygen using the venturi effect, unlike the big CO2 compressors that many blue hydrogen projects are discussing. Next slide, please.

So we have these massive resources. For example, one deposit in Alberta is over 2 trillion barrels in size, and we think that we can take about 10%25 of Western Canada's resource and for a 50 year life span supply 10%25 of humanities total energy by 2040, which will take a lot of investment and build out and construction of course. In fact, if you like at the price tag it will be, we think, approximately 700 billion dollars. But compared to 6 trillion dollar industry getting 10%25 of that is still an interesting proposition for whoever wants to help us construct it. Even if we get a fraction of our goal it's quite a compelling thing. Next slide, please.

We've got an interesting diverse advisory board and team. There's about 60 of us and we're happy to be transforming the cost structure and environmental performance of hydrogen production. That's all I had prepared to say about Proton. Thank you.

Myron: Thanks, Grant. Interesting. Next we're going to go to Joy.

Joy: Thank you. Can you go to the next slide? So I want to tell you a little bit about Unilia. Unilia Fuel Cells is an international hydrogen fuel cell stack engineering and manufacturing company. The forefront of the vehicle electrification movement. Our core competencies are on electric chemical engineering, stack design, at scale production is lead by a team of experts who are industry veterans. So we have R&D and production facilities in Canada and in China and Unilia was built from the ground up to offer unparalleled competitive advantage through technology edge, manufacturing prowess, and most importantly, market access. The result is a synergy of East and West embodying the agility and the passion of the start up with resources and capabilities of seasoned industry contributors. Next slide, please.

So where are we? We have our R&D center located in Vancouver, where I'm speaking from today, and we're in Burnaby in the heart of the fuel cell hub. We have about 45 employees here and we now have 9 hydrogen test stations. We also have 2 sites in China. So our main manufacturing base is in Shanghai and we also have an additional location in Foshan with about 150 employees and 6 hydrogen test stations in that area. Can you go to the next slide, please?

So in Vancouver, this gives you sort of a synopsis of what we do here, so we do quite a range of activities going from subscale testing to characterization of the sub components, as well as the integral components of the fuel cell. We do internal catalyst coated membrane, or CCM, development. We build stack prototypes. We do what we call MEFA prototyping and that's membrane electrode framed assembly prototyping. We also do our own stack testing here. A lot of the research goes on in Vancouver and then we work very closely with our partners in China. Could you go to the next slide?

So this is some of the pictures from our facility here. You can see that R&D lab where we do a lot of our ink development, and on the upper right you can see one of our coating machines, and going down where we can do some MEFA development prototyping and on the bottom left where we do our CCM lamination. Go to the next slide.

These are some images from our stack production facilities in Unilia Shanghai. So some of our sealing and stack assembly and testing capabilities. Not all of it came through on the slide. Sorry about that. But moving from the left you can see where we do our automatic sealing. The center one being building our stacks and on the far right doing the testing of our modules. Go to the next slide, please.

This is our Foshan facility where we also do elements of the stack manufacturing and in this particular case this is some additional sealing images. Go to the next slide.

What applications? We're developing fuel cell stacks for mid to heavy duty vehicles and there are some pictures here showing them being implemented into those applications. We're very excited to see more and more of our vehicles on the road.

We have two products out now and our first product was the Polaris product and that was launched in the second quarter of 2020. It's scaleable to 83 kilowatts, power density of 3.5 kilowatts per litre, free start up capability to minus 30. We most recently launched Electra, which is our latest design, and this was just launched last month. So this was Q2 2021. It's scalable to 130 kilowatts and looking at power density as a 4.4 kilowatts per litre and similar free start up capability. Can you go to the next slide?

Most recently one of our exciting developments was that we had TUV global certification of our stacks in a re-fire system. It was a first stack and system to receive the TUV certification and what was just a nice bonus was that the measured power that they demonstrated was higher than what we were rating our stacks. It was a happy moment for the teams and to be able to get this accomplishment. So that's a little bit about we do and why we're excited to see more hydrogen activity in the world and specifically in Canada.

Myron: Great. Thank you very much and last, but not least certainly, Rob.

Rob: Rob Harvey, with Cummins. Cummins is well known as a leading engine supplier, diesel, natural gas hybrids and battery electric vehicles but we're going to talk about hydrogen today and some of the new power capabilities. So next slide.

Just a quick overview. We work with OAMs. OAMs of truck manufacturers, bus manufacturers, train manufacturers and hydrogen production companies and the gambit of technologies and products we've developed include battery electric components and power trains, fuel cell power modules and compositions, hydrogen production both for industrial applications, small scale turn-key systems and large scale systems that are hyLYZER product line for large scale green hydrogen production and also stationary fuel cells and solid hySTAT fuel cells for micro grids and grid scaling. Next slide.

To give you an example of some of the projects we've done, in terms of transit buses for urban fleets. Railways, I'll be talking more about with our work with Alstom, the world's first zero emission fuel cell electric train. Municipal vehicles, mining vehicles, the full gambit. Our focus is on fleets and also commercial vehicles like a class 8 truck, a project with a California Energy Commission in California. The nature of our contribution is always a fuel cell composition, minimum, and in some cases like that commercial vehicle, the class 8 truck, it's a full integration of the entire vehicle with the fuel cells, the batteries, the hydrogen storage and the full integration. On the electrolysis side we've got over 600 sites. We've supplied equipment for around the world and most of these sites are industrial hydrogen production facilities used for manufacturing and industrial processes. The past 10 years, an increasing number of our projects are for green hydrogen production. The one on the second there is Falkenhagen. That was one of the very first power to gas plants built in Germany and also for the production of green chemicals and fuel for fuel cell electric vehicles. Next slide.

Our value proposition is basically we've been doing this a long time. We've got a lot of hours on our vehicles, vehicles that these have been deployed. Some of the key distinctions is no need for auxiliary humidification. Fuel cells produce electricity and water and we use the water produced, naturally by a fuel cell, to provide the humidification for the membranes. So that's a distinct feature that reduces the operating costs for the facility. Size and weight, lower than for higher pressure systems. One of the key wear components and aspects that affect the life of a fuel cell is not the membrane itself or the stack but it's the air compressor component. The air compressor compresses of any kind is often the weakest link. Our design uses a small air blower and it's lifetime is 5 times longer than a compressor. Freeze capability and unlimited stop/start cycles as well. Next slide.

This project, I think if you really want to test the application of fuel cell vehicles, there's no better model than for a commuter train and the ... iLint, which was developed by Alstom, its had trains and service since the fall of 2018. Cummins is providing the fuel cell composition. You see a picture of it there that is the stacks that the systems for management of the hydrogen, the inverter systems, the exhaust systems, all part of an integrated package which goes on the top of the train for that. The great thing about this is from a passenger's stand point, and an operator's stand point, the performance is identical to a diesel train. So in terms of having 150 passengers, the top speed of 140 kilometers per hour, the time for refueling, the only difference is it's a zero emission vehicle compared to a diesel. Compared with an overhead catenary system it's cheaper as well. Next slide, please.

Just quickly on the electrolysis side, to give you one example and a great example in Canada, is the project that was completed and commissioned in January of this year with Air Liquide. This is a 20 megawatts electrolyzer project with our hyLYZER 1000, which is a 5 megawatt platform. Produces over 8000 kilograms a day. In this configuration you see 4 lines of the system. One of the key distinctives is the output is 30 bar, which reduces the compression costs, or even eliminate the need for compression, for the electrolyzer plant. Air Liquide's project is being used for industrial and fuel cell vehicle customers, providing hydrogen for that. That's a very quick overview of Cummins and some of our capabilities. You can find more information on our website, cummins.com/hydrogen. Thank you.

Myron: Great. Thank you, Rob. Appreciate the introduction from everybody. We're going to move now to cover the areas in the agenda. Let's turn to opportunities. When you're talking a little bit about what each of you do in your individual companies but for our audience, what are the use of the opportunities in Canada with respect to hydrogen? That's really across blue, green or the other colours of the rainbow. I think it's important we actually, maybe ... ... start off and just actually comment on the colours of the rainbow that are relevant to those who are not as familiar. Joy over to you.

Joy: Okay. Just to get everybody on the same page, and we'll be using these colour terminologies quite frequently, people may have heard of them or may not. There's grey hydrogen, which is produced from the reforming of fossil fuels without carbon capture and sequester. There's blue, which is produced by fossil fuels, by methane reforming or paralysis or other processes with carbon capture and sequestration. There's green hydrogen, producing water from electrolysis using renewable sources of energy such as hydro electric, solar or wind. If you do much web surfing you're actually starting to see many other different colours but I didn't want to get into that so I just wanted to keep it simple with the three. You may see pink, yellow, who knows, but that's where we should start.

Myron: Great. Thanks for that. Maybe you can add some comments to the opportunities. Joy, do you want to start off? Do you have any further comments on that or should we move to Rob?

Joy: Sorry.

Myron: I wasn't sure whether you were finished or whether you had some further comments.

Joy: Okay, in terms of the opportunities. I think that everybody right now in the industry is really excited to see the recent changes that are going on. When we started with the Paris Accord there might have been a little bit of skepticism if that was going to be really realized in the industry. As you alluded to at the beginning it's a constantly changing platform that's going on and we see announcements happening all the time. With the carbon pricing policies, Canada's hydrogen strategy which I know where going to talk about more later, the clean fuel fund that was recently announced at the World Hydrogen Technologies Conference and with the clean fuel standards that are coming down the way. I think that we really have to think about how we're going to approach the greenhouse gas emissions and have mixed strategies that are going to help us address this. It sounds sort of corny to say this but I think we have to walk before we run and so that looking at mixed solutions, of both blue and green, is a very viable way for us to achieve our targets. It's going to also really depend on the local situation that we are in. If we consider the concrete elements of it, a solution that is right for say a Province like Quebec, which has the world's largest electrolyzer that Rob just showed, and a very substantial amount of hydroelectric power, that solution is going to be very different than for say someone in Grant's position in Alberta, where we're looking at some of the greatest sources of methane. I think the opportunities for hydrogen is that we can play to our strengths and that we're going to be able to try and utilize both the blue and the green, depending on the local situation.

Myron: Great. Thank you. I guess over to you, Rob.

Rob: Thank you. I think the biggest opportunity is what's going to use that demand is in zero emission fleets for heavy duty mobility. Buses, commuter trains and trucks. We're already seeing that with projects that are underway and being developed by Mississauga Transit and Winnipeg Transit for initial deployments of 10 fuel cell electric buses for demonstration and integration trials. We've seen with Bison Transports work in developing a project for class 8 trucks in the Edmonton/Calgary corridor and many others. The exciting thing about is that the performance, as I mentioned with the trains, but the performance for buses and trucks as well, a one to one substitution with a diesel vehicle. The same ratio in time. Zero emission and, most importantly from an operator's stand point, a line of sight to a total cost of ownership parody with their diesel fleets. That's the real driver. It's not just about being green. It's an economic proposition and that's going to be in the next 8 years, really. We're looking at 2028. Some studies say as late as 2030 but we will receive the parody. The other application and opportunity for the hydrogen industry I see with blending of green hydrogen into the natural gas grid. So decarbonize and companies like Enbridge nearly completed the first project for blending in North America and that's another opportunity.

Myron: Great. Thanks for that. Grant, what have you got?

Grant: Yeah, I think of the opportunity is vast. I'm a big fan of all things hydrogen, partly because I don't like air pollution and, of course, when we burn hydrocarbons these tiny, tiny particles of air pollution that nobody talks about, nobody sees them, but they do cause chronic health problems and a lot of deaths, even in Canada. I think that whatever we can do to do zero emissions in our cities and in our country, great. But I also view a big, big export opportunity longer term. So if we can make hydrogen cheaper than natural gas, and we can, ... base load of electricity certainly becomes a big part of the mix. Blending into natural gas pipelines, of course, that's as well. Although that's a challenge at the moment from a regulatory perspective. But then our whole transportation fleet and everything can save so much money by buying this very, very low cost hydrogen. So I agree completely with Rob that it's an economic opportunity to solve. Yeah, I'm very excited to watch how this opportunity gets taken advantage of by Canada.

Myron: We hear about lots of opportunities but a lot of people talk a lot about the challenges. We've been hearing about ... ... ... been a long time. There's a lot of people out there saying, "No. Not going to happen. Too complicated. Too many impediments." How do you find that? What are the challenges? Let's mix up the order a little bit. Why don't we start off with Grant here.

Grant: Sure. Yeah, one of the key challenges is in Canada, in general, there's still not regulatory clarity on whether we're allowed to put hydrogen into high pressure distribution lines. In fact the rules say we can't. So I know that there are a lot of large mid-stream companies that are trying to allow that because it's harder and harder for them to attract investment and stay relevant in a steeply decarbonizing world if they're not allowed to mix in hydrogen. So as a producer I'd like to see that happen and that is still a big roadblock or challenge because it is the easiest way to move hydrogen around. Another challenge, I think, is education. So people are thinking of hydrogen as this niche thing that maybe the Europeans are doing or maybe it's happening here or there. They read about it and hear about it but there's not a lot of practical things that you can look at. You can't even really buy a hydrogen car in most of North America today and I think that's part of the missing ingredient for education. It's not viewed as a normal fuel. It's one of the reasons we built a hydrogen barbeque, for example. Another challenge that I see is that there's two different scales. One is focused more on transportation fuel and one is ... ... so filling in the gaps between wind and solar, a turbine that's burning hydrogen can be dialed up and down. I think it's challenging to get that out. People are talking a lot about batteries but I guess that comes back to education. There's many facets of challenge that can be addressed through education.

Myron: Great. Thanks for that. I guess, Rob, do you want to comment?

Rob: Sure. I agree with Grant. Our principle challenge is not in the production of hydrogen. Whether it's different options like ... for blue hydrogen or electrolytic hydrogen. In Quebec, for example, the projects that have been announced there's a lot of investment already in place. The challenge is in the infrastructure for the distribution and storage of hydrogen and, again, focusing on for zero emission fleets we need to build it out. We've got a good start. We're not starting from scratch. The industrial gas companies have built hydrogen infrastructure for supplying, primarily, gaseous hydrogen delivery in steel tube trailers for industrial customers. There's infrastructure that's there but if you look at the scale that we need for meaningful amounts of hydrogen for a transition to zero emission bus fleets, for example, we'll need a lot of hydrogen and that needs to be built out. The economies a scale, in terms of building a network of infrastructure for that, is where we need to get to. The challenge is if you're developing an individual project it's very costly especially at this stage to build that out and get the redundancy and amortizing the costs for 10 buses is very challenging. The story gets a lot better when we look at scale economies for larger bus fleets and multiple bus fleets, for example, we need to get there and the barrier is getting these first projects off the ground and launched so that we can begin to build that network infrastructure.

Myron: Joy, what's your perspective?

Joy: Actually I've agreed with both of my esteemed colleagues here in terms of some of the key issues. I actually think one of the key ones is the misinformation, and I don't know how many of us have had those conversations with relatives or friends that come back, and there's still some public perception that hydrogen can be more dangerous. That it can still be polluting and even when you have comments like that from Elon Musk, talking about ... cells as opposed to fuel cells. So I think that to bring the public on side is one of the key things to keep momentum going. Secondary, I think the codes and standards is really essential. Depending on your perspective, it may be one of the more challenging ones to get behind because it is very detail oriented, and it needs to be to keep our safety but at the same time we want to make sure that we have harmonization of those codes so that we don't have to adapt and make it specific to each regional location. You don't want to have to waste the energies and time developing that. As well, alluding a little bit to what Rob said, is that Canada's hydrogen strategy estimates there's a got to be a lot of investments into the hydrogen infrastructure. They were estimating 5 to 7 billion dollars of investment. Those investors are going to be looking for return on their investment in a timely fashion. If I think of it from a fuel cell perspective it can be a long time from when you develop a fuel cell concept before you're selling fuel cell vehicle on the road and bringing back that income. So I think that long return on investments is also another key challenge.

Myron: Fair enough. Rob, any further comments on Joy's comments? Not this one?

Rob: I agree. Yeah.

Myron: Okay. There's a lot of challenges so who's supposed to fix these? Who's supposed to help address them? Where does government fit in to all this? I've heard people talk about, "I'm going to do it in clusters because you can't look to government." Other people say, "No, government should play a role." What do you think the role of government should be? Should it be just in policies? Grant, you talked about regulatory, that's an obvious one from my perspective. We talked about infrastructure. The government is very keen on building out an infrastructure. I know, by way of example, the Canada Infrastructure Bank is looking at hopefully financing infrastructure in the hydrogen space. What do you think is really what the government should be doing? Should it be helping drive demand? Should it be subsidies, tax policy? What's the right thing to do? Rob, why don't you lead us on this one. I think we have a slide for this.

Rob: Yeah, I can comment on this. I think many of you are probably familiar with the Hydrogen Strategy for Canada. It's a document that was developed over 3 years with the Government of Canada under the leadership of Natural Resources Canada and had input from hundreds of companies, organizations, trade associations, universities and others. The describe is a call to action and it really is a comprehensive view of the industry, the size of the opportunity and what needs to be done. Next slide.

Just to give an introduction on this. If you look at what are the similarities with other national strategies and the last is, as Myron said, there's a tremendous amount that's gone on in the last 12 or 18 months. Germany, Japan and other countries have tabled national hydrogen strategies with ambitious targets. It's interesting. The core characteristics of all these strategies is economic development and recognizing what it would it do for the economy, for jobs in the respective countries, and also greenhouse gas reductions. This is true for the Hydrogen Strategy for Canada. Some of the key aspects in positioning Canada to become a world leading supplier of clean hydrogen and fuel cell technologies, building on the great history we have with companies like Ballard and Hydrogenics, now part of Cummins, over the past several decades and many new entrants and companies that are in that space, developing a low carbon hydrogen intensity base and infrastructure for across the country for domestic and international consumption. Fueling infrastructure for vehicles. The target, 2050, of 15 billion dollar hydrogen sector and specific targets and opportunities for significant GHG reductions. Next slide.

Not going to go through all of these but in terms of a framework and what would it take in terms of steps. Over the next 5 years, and indeed out 2050, some of the key aspects, strategic partnerships. One of the things we've touched on already on this webinar is the risk of investments for businesses to invest in hydrogen projects and infrastructure to grow the hydrogen economies. Innovation to support R&D. Codes and standards, as Joy's already mentioned, for building on or existing codes and standards and with a view for removing barriers for significant deployments of these types of projects. Building awareness. Regional blue prints. This is a key, recognizing the different attributes and strengths across the country for different types of hydrogen development. In the hydrogen economy one size certainly doesn't fit all and in Canada we have the breadth and opportunities really covering all the bases. Next slide.

We've touched on this. I think one of the key things is recognizing that the study recognized is that across Canada we've already accomplished a great deal, not only with exports of hydrogen technologies around the world, but in terms of projects. I'll just give a very quick example of some of the things that were highlighted in this Hydrogen Strategy, the roll-out of 10 public fueling stations in BC. In Alberta there's several projects in terms of development of blue hydrogen, including the carbon capture and sequestration. In Manitoba, the Winnipeg Transit that I mentioned, looking at fuel cell bus deployments. In Ontario, we've had the two and a half megawatts power to gas plant, the first in North America that's been operating for over 3 years. Lead by Enbridge and Cummins and also the evaluation of transit projects like Mississauga Transit and others. Quebec, we've had several projects, one completed with Air Liquide. Other projects announced for large scale electrolytic green hydrogen production, for chemical productions, biofuels and feasibility studies in the Maritimes. Next slide.

The infrastructure goes beyond transportation for fuel but includes heat for buildings and industry and also blending in the natural gas infrastructure and also looking in the power side as well. Next slide.

Cummins is a member, and I'm on the board of the Canadian Hydrogen Fuel Cell Association, so I want to put a quick plug in for there. You can see from these companies it covers the full value chain from production companies, technology companies, utilities, project developers, universities, legal firms, consultants in the hydrogen space. The thing to note is in less than a year we've gone from 58 members to 107 members today. Almost a 100%25 increase and it really just shows that the momentum and interest in growing interest in the hydrogen space and industry in Canada. Next slide.

There's also Provinces that have developed their own hydrogen strategies. I need to update this slide. British Columbia did one of the first hydrogen studies in 2019. They just last week introduced their hydrogen strategy as well. Quebec has got a white paper on hydrogen and identified 15 million dollars of support of green hydrogen projects. Ontario introduced its low carbon hydrogen strategy discussion paper last November, and has had a hydrogen strategy working group since then in developing the hydrogen strategy looking, to leverage the strengths in terms of the electric generation mix and the natural gas infrastructure in Ontario. Alberta incorporating hydrogen was a key part of their national gas vision and strategy released in October of last year. Next slide.

One final note, at the World Hydrogen Technologies Conference in Montreal a couple of weeks ago, Minister O'Regan announced the 1.5 billion clean fuels fund. This is an exciting project. One for the scale of it and the breadth and if you look at it, involves hydrogen directly, but many of the other types of eligible clean fuels, like renewable diesel and other biofuels for aviation and renewable natural gas, will in many cases involve the production of clean hydrogen. Either blue or green hydrogen and so the eligibility for companies in the hydrogen space is very high indeed. It includes funding for feed studies, eligibility to get to 50%25 and for projects as well. These projects need to be commissioned by March of 2026. That's the highlight of the space for Hydrogen Strategy in Canada and the Provinces and it's an exciting time.

Myron: Great. Thanks for that. Joy, Grant, we talked a lot about the policies and strategies. Rob's done a great job of taking us through those. What's your perspective? What should the government be doing? Is that enough? Should they be doing more? Could they be lending? What's the way to go?

Grant: I'll jump in if I can. I think there's three things I'd like to see added. One is I'd let everyone know that we are going to start blending hydrogen into natural gas pipelines. Even if it's 1%25, just ... and we can review it and escalate it through time, but having that clarity would be good. Tied to that would be new pipelines, whether for oil and gas, should be hydrogen compatible. The costs, overall costs for installing a pipeline with the metallurgy for hydrogen, is very, very similar to non-hydrogen so it's better to just future proof ourselves. I'd also like to see, in Canada, I guess everywhere, there's the carrot and there's the stick, which do you use too much? If you use the stick too much you kill off the interest. Carrots, I think, can nourish and build a healthier outcome. So I 'd like to see a little bit more carrot and a little less stick. While sticks are effective but carrots actually, in terms of curbing CO2 emissions, the carrots to build out hydrogen then you have something. There's an incentive to go construct something large. So I think more carrots for hydrogen would be good. Then I also think that the model where General Motors, for example, pays Tesla. The government has some sort of standard. You should have this much emissions for vehicles or something, and General Motors is above that and Tesla is below that, so there is a money transfer directly to supporting from sort of the less desired status to the more desired status and I think that transfer of funds helps build out a more desired status faster. If there was a sliding scale on carbon intensity, related to that of carbon intensity of the hydrogen production by life cycle analysis, I think that would be an additionally helpful tool to meet the Paris Agreements, all of these different decarbonization goals. It should further incentivize the lowest carbon intensity hydrogen production methods. That's all.

Myron: Before we get to Joy I have to ask, describe the carrot. What kind of carrot would you use?

Grant: There could be a few things. RIP loans. So that can always be something that helps people say, "Wow, here's an opportunity to build out a new sector, gain early market share.", things like that. It shouldn't all go to the large incumbent energy companies just because they're there. I'd rather see many, many small hydrogen businesses try their unique things and some of them will work out great and some of them won't. But on average I think there's a much better outcome per dollar in the long term for Canada if we distribute it a lot among many, many smaller companies. So I'd like to see, I guess, lots of small carrots as opposed to a few mega carrots for some of the incumbents.

Myron: Fair enough. Joy, what's your perspective? Joy is nodding in agreement it looks like.

Joy: Yeah, I do like the carrot . Another potential carrot I could see is that we start to de-risk some of the investment risk by creating dedicated demand for the hydrogen, and perhaps incentivizing it by basing it on demonstrative capacity as opposed to any sales of hydrogen, so that people are encouraged to bring that additional capacity and make that more available so we get more adopters. I would also like to see the continuation of subsidies for early adopters in terms of the fuel cell vehicles. While we have some programs in BC and some programs in Quebec I'd like to see more of that. So some carrots there. I'd like to see maybe some barriers to bringing the electrolysis online. Like in BC, for example, BC Hydro announced lowering the rates of being introduced into the grid. Then maybe, lastly, I'd also like to see more incentives regarding the heavy duty transport. As Rob talked about it, that there should be an economic case in that area. We see the targets for the light duty vehicles but I'd like to see more emphasis on the heavy duty vehicles. Lastly, perhaps the concern I have is a little bit on political landscape. While we have policies and we have guidance, what happens if we change governments? We just need security of policy going forward. So in fact some cases, I think, we need more legislation like we are starting to develop.

Myron: That's quite a view. Rob, you started off, do you have any further comments you'd like to add or disagreements with what you've heard from Grant and Joy?

Rob: I certainly wouldn't disagree at all. Maybe just to add to Joy's comments I think the theme is de-risking. Right? There are many, many players and companies in Canada today that are investing in R&D and demonstration projects. The technology's ready and there's many groups that want to deploy zero emission fuel cell electric fleets. The programs are coming. The two further suggestions that I'd make, one aspect of de-risking is, and touching on what Joy's already said, if you had a take or pay structure for some of the hydrogen production and supply, and a bit of either a government incentive or backstop would help do that. Because you need to get these projects financed and that's a crucial way to do it. We saw in the development of the renewable energy business and wind and solar, feed in tariffs, is basically if you've got a financeable project, a take or pay contract on the hydrogen side would certainly help that. The other thing is when we look at deployment of fleets, well you need the vehicles and you need the fueling infrastructure, and today there are a lot of good government programs that are getting started, that are in place or under discussion, but they're in two silos and recognizing you need both to get these projects off the ground and you can invest a lot of time getting fueling infrastructure support. But if you haven't got the vehicles, where are you? So I think looking at it the way the developers need, they need both and having a program that combines both in alliance with that requirement, will certainly help them speed the adoption of zero emission trials, and indeed, transition to zero emission fleets.

Myron: Great. Thanks. Let's move to international, very, very briefly since we'd like to leave little bit of time for Q&A at the end, although we may go slightly over time. So international. If you had talked to people a couple of months ago they'd say, "Well, Canada's behind. We're really not at the forefront." I know, Rob, you and I had this discussion and you were like, "Well that's changed. In the last 3 months that's changed." But can you throw out a little bit of comments comparing, contrasting Canada versus international. Maybe, Grant, you can lead us off.

Grant: Sure I'll be happy to. So Proton is a global business. We've got patents in over 100 countries and sold licences in more than 20. I just got back from Dubai, for example, I get calls from all over the world on an regular basis and I think that there's a few key changes that are differences that I see from one place to the next. Europe seems to be leading the charge and actually anywhere where government procurement is doing an approach of 'do as I do'. Here we're saying 'do as I say not as I do'. But if your procurement requires you to have garbage trucks that are running on hydrogen, or buses or all these types of municipal or governmental transport solutions that are running on hydrogen, then that helps backstop things. It normalizes it for the region and it shows everyone the seriousness of it so it becomes like sort of a hyperdrive thing. If you're heating your buildings with hydrogen then it gets a lot easier for other people to look at that and say, "Okay. I guess the government's serious and there is a path." So that's one that I've noticed. I think there's also a difference in culture. A lot of the European companies are somewhat more inter-related, or maybe that's not the right way. I guess if the government says, "We're going do to this.", I've noticed this trend and I'm not sure exactly why it is. If you're in Norway and the government says, "We're going to hydrogen.", a lot of people go, "Oh yeah, that makes sense. There's hydrogen fueling stations around us and we're running a ferry on hydrogen. It's just a normal part. We all know that's what we're going to do and that's where we're going." But here I feel like there's a lot of trying to buck the trend. In terms of the, you can't tell me what type of fuel to use and if I want to make air pollution, I'll make air pollution. I'm not sure why there's such this active resistance to change. People fear losing their jobs in oil and gas although some providers like us hire oil and gas types of skill sets for making hydrogen from oil fields. But there's a very big difference. We're not even investing hard, on average, in Canada towards hydrogen and decarbonization solutions. But the average retail investor knows that they want to put their money into these types of things. Even like for us, about probably 20 of our shareholders work for Saudi Aramco, so like reservoir engineers and stuff like that. They all see which way the wind is blowing. Fueling stations is a part of it, normalizing it, educating people. So yeah, building a hydrogen barbeque. You can use hydrogen as a fuel. People here are still asking questions about the Hindenburg and things like that. So how do we normalize it? I think vehicles are a big part of that education.

Myron: Okay. Fair enough. Rob, let's here from you on your perspective.

Rob: I think just to mention again, the lead that we've got in Canada with Canadian technologies, a lot of what's going on in and around the world is based on what's been developed in Canada. I mentioned the Coradia iLint. I mentioned the ... electrolysis and some of the work on that. What I don't think I mentioned is all of the R&D, product development, manufacturing for both of those major product lines is based in the hydrogen fuel cell and technologies group in Mississauga, Ontario. We've got two other panelists, in terms of technology developers, there are many more in Canada and the good part is we are ahead, in many respects, in terms of technology. We have been and we still are today. What is gratifying to see is on the infrastructure side in Canada, and we've done that without having tremendous amount of activity in those projects in Canada, but now on the infrastructure side that's catching up. With vehicles, with hydrogen production, blue and green hydrogen production, and that's a virtuous cycle, because the more experience we have and the more capabilities that we develop and leverage these projects in Canada, we're even in a better position to do larger projects and more projects globally as well. I think that's the key difference that Canada has with other parts in the country. The other key difference I see is that we're not looking to import hydrogen. We have just seen discussion on the webinar today, many opportunities in places like Alberta and Quebec and Ontario and BC to produce substantial amounts of hydrogen. Far more than we can use ourselves, and for export as well, and when you look at a lot of the European roadmaps and designs they're looking at, "Okay, how can we import hydrogen?", and that's a key difference in Canada.

Myron: Great. Thanks. Joy?

Joy: So, one word that Grant sort of mentioned that really resonates for me when I think about the leadership, is the ability to inspire change. So internationally I've seen two aspects of what we can learn from in inspiring that change and leadership and through my years in fuel cell technology, really California started us off when they first brought in their regulations of bringing zero emission vehicles, and people started to change the way they thought and get serious in terms of bringing that technology. That was in 1990. They've continued that and they've also tuned their policies that they've gone along. Another big example for me, and it's close to our heart because we work so closely with our colleagues, is China. Don't worry, I won't go into discussion of Chinese policies because that would take up the rest of the time and probably end up another few hours, but they have inspired change and I think that in terms of leadership that is exciting. They're not afraid to make changes when they see a policy is going in the wrong direction. So an example of where they're doing vehicles subsidies and they have people building golf carts with fuel cell engines. But that's not putting more vehicles on the road. That's not getting more hours on there. So when they tuned their policies they're able to now get more vehicles on the road and people incentivized to rent those vehicles when they're not using them. So, again, giving more hours of the behaviour that they want to see. As well as Rob talked about the leadership that we have in Canada and I think that's a huge asset but I also look to internationally, I see some of the things China's doing. One, attracting some of the talent that we have here and purchasing products from Canadian companies to be realized in China, but they're also developing their own capabilities in terms of technology and they have incentives around that. Such as their high tech status opportunities where they can lower their tax burden by developing more intellectual property and as well doing more R&D. So that's another opportunity that I think Canada has seen, in terms of their leadership, but also can learn more from international companies. So yeah.

Myron: Thank you for that. We're running low on time. We're going to try do another 5 minutes of Q&A and hopefully people can stay on. So I think I'm going to skip my last question for the panelists so we can go to Q&A. First question was, how pure does the hydrogen need to be to feed your fuel cell reliably? That's a question for ... and comments for Joy and for Rob. How pure?

Joy: So it has to be quite pure, and I guess in terms if you need the percentage of hydrogen, that can be variable and you may have different types of systems which provide a range between 100%25 going down to lower percentages like 70%25. But sometimes specific contaminants can be very damaging to the fuel cells such as, if I pick Sulphur, there can be very, very low particulates or low PPM levels of those types of contaminants and it varies quite greatly.

Myron: Rob.

Rob: In general if we look at the numbers it would be at least four 9's, 99.99%25 pure. We can get there both with green hydrogen. Green hydrogen is five 9's, right out of the electrolyzer. With blue hydrogen, with pressure swing absorption or through liquefaction, you can get the purity required for fuel cells as well. I agree with Joy that there are some contaminates to especially watch but we've got pathways to get to the clean hydrogen we need to provide that.

Myron: Great. Thanks. Next question, the enhanced focus of the Biden Administration on the expansion of a US highspeed railway and the announcement last week of a proposed HSR link between Calgary/Red Deer/Edmonton, what is the potential for hydrogen to be used as the mode of fuel? No one will take that one on?

Rob: I can start with that one. If you look at, we have it today, the Coradia iLint. The first zero emission fuel cell train, it's been in operating in Germany since 2018, as I mentioned. That is of the commuter rail scale. So it's filled. It's got gaseous hydrogen filling and for commuter rail we're there today. But the big potential for hydrogen fuel cell rail versus the electrification alternative is overhead catenary systems, which are very expensive to build, the overhead wire systems that are more common in Europe than they are in North America and the length of time to build the catenary system, the disruption of road works, raising bridges, etcetera, to provide that, it's actually the first fuel cell mobility application that you've got a viable business case today. So I'm not familiar with the Biden announcement but for large scale regional rail, with a commuter rail, we're there today. I think for locomotives is a little farther off but certainly for commuter rail it is a viable alternative today and the economics are favourable as well.

Myron: Quick follow up, Rob, I think this one's also for you. ... train fuel is the same for regular train. Is that liquid or high pressure?

Rob: For the Coradia iLint it's 350 bar gaseous. There's a lot of real estate on the top of the train, if you like, just like a bus to explain that. There's a number of companies that are looking at fuel cell power systems for locomotives and for locomotives it could well be liquid on board. Given if you're going cross country, certainly North America's network, for the distance and the amount of energy that's required liquid may be an option for locomotives.

Myron: Great. Our final question, what jurisdictions around the world can I look to for inspiration and guidance on public policy on hydrogen? Who wants to take that one? Or are we now such a leader that everyone else can look to us? Grant, you look thoughtful. I'm going to ask you to go lean on that one.

Grant: I think there's a lot of good peripheral approaches in the electrification movement that can come across to what we're doing, we're trying to achieve with hydrogen. An example of that would be, for example, GM paying Tesla. In the hydrogen space if we're producing or selling diesel maybe some of that could help finance the build out of hydrogen. So, yeah, I think there's a lot of good peripheral concepts in electrification internationally.

Myron: Joy.

Joy: I guess I took that question a little bit different, in the sense that I saw jurisdiction as perhaps regional versus the Federal in terms of mandate, and I think that BC and Quebec are really coming with some excellent policies in terms of getting their hydrogen on there and working towards, like for example BC, working towards being self-sustaining in terms of their electrical demand. So I think that there's some opportunities there to look at some of the changes. I also mentioned in terms of BC Hydro trying to lower some of the barriers to bringing electrolysis into the grid. I think that there's some good work coming out of BC.

Myron: Rob.

Rob: I would agree. I think, as you said from the top, if you'd asked the question 12 months ago you might get a different answer. But I'm very encouraged by the policies and specifically the programs. Like the clean fuel funds that the Canadian Government has announced, and there's been Provincial announcements as well, that bode well for the development of hydrogen infrastructure and roll-out of these initial projects for heavy duty mobility, for example. When you look at other parts of the world, Korea, Germany, China, I think the difference is the amount of money in terms of government investment that's going to it, very high. Some very big numbers like 9 billion dollars, 9 billion euros in the case of Germany, but I think in terms of where we're at in Canada, and what's been accomplished and with some of these announcements and get projects underway, we're doing well. It's a very exciting time to be in the hydrogen space in Canada.

Myron: Great. Thanks for that. That moves us towards a wrap up. As Rob very aptly put it, very exciting to be in the hydrogen space at this time. You've got lots of issues, lots of opportunities, challenges, as to where government go. Overall it seems like a very, very positive session today. It looks like you are all sort of very excited that this is really gathering momentum and we look forward to continue to gather momentum. So on that note I want to thank our panelists for taking the time to bring their expertise and their perspectives to us. I wanted to thank our audience as well for participating. We here at Gowlings are very excited to be involved in this space. We look forward to doing more in this space and I think stay tuned for more webinars and podcasts on hydrogen. So thank you very much everybody.