Net Zero. Two words carrying countless interpretations and opportunities as governments and corporations finally begin to face the realities of powering a world with energy sources meant to help—not harm—our collective futures.

One of the energy sources with the least environmental impact when done right is hydrogen. British Columbia has been a long-time leader in the research and commercial development of hydrogen for transportation and industrial uses ever since Geoffrey Ballard and the team at Ballard Power imagined a better way to produce hydrogen fuel cells to power zero-emission vehicles.

But Ballard Power’s story has been a long slow burn, with plenty of ups and downs as the promise of a hydrogen-fuelled network of cars and fuelling stations faltered, eclipsed by the Elon-driven vision of battery-powered electric vehicles. 

And while the market may have spoken in favour of batteries as the clean mass-market replacement for internal combustion engines, there is renewed interest in hydrogen as a key fuel source on the road to net zero—and a new generation of BC technology companies is working to deliver key pieces of the hydrogen puzzle for applications that stretch well beyond personal use cars and trucks.

But before we get there, a quick science lesson. When used to power vehicles or power industrial machines and processes, hydrogen releases water or zero-emission vapour. But energy is required to produce hydrogen for applied use and hydrogen can only be part of the climate solution if we don’t generate emissions when producing hydrogen fuel.

“Clean” or low-carbon intensity hydrogen can be produced in two main ways, by splitting water with electricity, or by reforming hydrocarbons. If the electrical power used to split the water is clean (i.e. produced without GHG emissions), then the resulting hydrogen is clean. If the power is renewable, such as hydro, wind or solar, it is often called “green” hydrogen. Similarly, if the reformed hydrocarbon is renewable, such as biomass or renewable natural gas, then the hydrogen is also clean and green. However, if fossil fuels such as natural gas or coal are used, then the hydrogen is only clean if the resulting CO2 is managed and sequestered in some way, such as by carbon capture and storage. If so, it is often called “blue” hydrogen, and if not, it is called “grey” or “brown” hydrogen. All forms of clean hydrogen, including green and blue, can be used as a clean fuel for heat, power generation or in an internal combustion engine with little or no net GHG emissions.

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Mark Kirby, CEO of the Canadian Hydrogen Fuel Cells Association, says most activity in the hydrogen space is focused on clean hydrogen with the push to net zero acting as a prime mover.

“Hundreds of countries, thousands of companies have made commitments to net zero, and that changes everything,” Kirby says. Citing previous policy statements based on a more modest goal of reducing GHGs, Kirby says we could still let ourselves off the low carbon hook, turning to cleaner fossil fuels like natural gas to lower emissions or invest in energy efficiency programs to use less carbon-emitting fuels. “But you can’t get to 100 percent net zero without having hydrogen as part of that mix.”

Another key difference between the Hydrogen 1.0 period of the early 2000s and today according to Kirby is ambition. “Before, the focus was really limited to fuel cells; today, the focus is on hydrogen in all its applications and those opportunities are exciting for all of us.”

Hydra Energy CEO Jessica Verhagen and her team are one of several BC-based technology companies moving to seize those opportunities. The Delta-based company is focused on converting diesel engines used in commercial trucking fleets to co-combustion hydrogen engines. While personal use battery electric vehicles are gaining traction, distance travelled, towing capacity, the need to refuel and get back on the road quickly, and cold weather performance gives hydrogen advantages over battery-powered electric.

Hydra’s solution is built on what the company calls a Hydrogen-as-a-Service (HaaS) model. Hydra’s HaaS offering is based on learning from the solar market in California, where utilities install solar panels at no cost to the homeowner, recouping the capital cost over time through margin on monthly electricity use.

For fleet operators, Hydra will pay $50,000 per engine to install their conversion technology at no cost to the owner. Hydra recoups that cost through a recurring revenue model that features five-year hydrogen fuel contracts on a fixed-cost basis that is five percent lower than the cost of diesel.

Hydra also installs green hydrogen fueling stations on-site at no cost to the fleet owner. Hydra sources the green hydrogen from waste hydrogen produced through various manufacturing processes. Rather than venting hydrogen into the atmosphere, Hydra works with partners to capture the gas for consumption by its fleet customers. In addition, excess hydrogen not used by commercial fleets can be sold to natural gas distributors looking to cost-effectively increase the renewable portion of its natural gas.

“We are addressing one of the biggest challenges that faced the application of hydrogen in the transportation space,” Verhagen says. “In the past, companies like Ballard and others developed really cool off take technology but without a source of cheap supply of hydrogen. We have brought supply and demand together in one region to offer a model that can scale.”

The company’s technology has been tested successfully in over 200,000 kilometres of driving and now Hydra is moving forward with design and engineering studies to launch the technology on a wide basis by the end of 2022. In May, the company raised $15 million to fund company expansion, bringing the company’s total raised to date to $22 million. Once the HaaS Project design and engineering studies are complete, the company plans to raise an additional $15-20 million.

As interest in hydrogen technology application expands, finding ways for the molecules to work better and more cost-effectively in a variety of applications is critical to wider commercial acceptance. 

Vancouver-based Ionomr Innovations emerged from the electrochemical materials laboratory at Simon Fraser University run by Professor Steven Holdcroft. There, PhD student and Ionomr co-founder Ben Britton and Holdcroft (an Ionomr co-founder and current science advisor) were studying ion exchange membranes and polymers, materials required for energy production (including hydrogen) first developed by Dupont more than 60 years ago. The materials have not changed in that time; however, they require the use of environmentally harmful compounds and require expensive precious metals to operate. 

Ionomr’s membranes and polymers change all that. They enable cleaner, more efficient, more durable, cost-effective applications including fuel cell energy generation, hydrogen fuel production, and carbon capture utilization and storage. Their technology will significantly reduce the capital cost of hydrogen production equipment by water electrolysis and increase the output of electrolysis systems for direct conversion of captured carbon dioxide into liquid fuels.

“The evolution of technology is bringing the cost of hydrogen down, including the role our materials play,” says Ionomr CEO Bill Haberlin (Britton founded the company in 2016 and Haberlin joined in 2018 to help commercialize the products). 

Haberlin pointed to industrial hydrogen production as an area of focus for the company, one where capital expenditure considerations drive much of the decision-making. In late June, the company announced that its Aemion membrane technology for industrial-scale green hydrogen production by water electrolysis is commercial ready. In a release, the company said their Aemion membranes “enable OEMs to produce the lowest possible cost electrolyzer solutions, providing a clear pathway to 2050 green hydrogen cost targets in the immediate term.”

Britton and the company’s technology are capturing attention. Earlier this year, the Globe and Mail’s Report on Business Magazine named Britton one of 50 “changemakers” working to address society’s most pressing challenges. And in June, the World Economic Forum named Ionomr as a member of the 2021 Technology Pioneers cohort—a group of 100 promising early to growth-stage companies from around the world (and one of only two from BC) that are involved in the use of new technologies and innovation that are poised to have a significant impact on business and society.

Chris Reid and his team at Ekona Power are taking a different look at hydrogen science. Today, most industrial hydrogen is produced by either Steam Methane Reforming (SMR) (emissions intensive) or electrolysis by using renewable energy (costly). Ekona’s solution uses a process known as Pulse Methane Pyrolysis (PMP) to separate natural gas into hydrogen and solid carbon, with no carbon dioxide (CO2) released into the atmosphere. All that’s left is hydrogen and solid carbon that can be used in a variety of materials like cement, asphalt or in water purification and agriculture.

“The exciting thing for us, is that we have built a business model that assumes there is no value to the solid carbon. We worked from the assumption that we had to get our hydrogen production costs to less than the incumbent [SMR] plus Carbon Capture and Storage (CSS) for this to work, and we have done that,” Reid says. 

Reid was part of the Hydrogen 1.0 story when he served as president and CEO of Cellex Power (which sold to Plug Power in 2007)—a fuel cell pioneer that developed products focused on forklifts used in the materials handling sector. He went on to co-found Innovative Breakthrough Energy and Emission Technologies (IBET), a group focused on creating investable breakthrough energy and emission technology companies.

Ekona collaborated with IBET in the earliest stages to bring the technology forward. “We were trying to address some fundamental questions,” Reid says. “How do we decarbonize the industrial energy supply chain? How do we get the molecule to the customer at a similar to lower cost than the incumbent? How do we make it dispatchable, so it is available 24/7, 365 days per year? How do we make it scalable, moving from kilograms to tonnes? How do we make it siteable, to reduce distribution costs and time delays?”

The team kept coming back to hydrogen and Ekona’s PMP technology as the only real solution. IBET is an investor in Ekona, as is Evok Innovations. Evok is a $100 million cleantech fund established by Suncor and Cenovus that accelerates the development and commercialization of solutions to environmental and economic challenges facing the oil and gas sector. Ekona is still early stage, but the company is planning to close a $35 million Series A round by the end of summer to fund the design and construction of their first pilot facility.

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Not lost in all the recent hydrogen talk are fuel cells for the transportation sector. After more than 40 years in business, Ballard Power continues to be an industry leader, evolving and growing market share. The company’s proprietary PEM fuel cell technology provides zero-emission power to commercial vehicles that have travelled an industry-leading total of more than 88 million kilometres in more than 20 countries, and are used in 3,500 fuel cell electric buses and commercial trucks currently on the road. Revenues for 2020 totalled just shy of $104 million.

An emerging challenger in the fuel cell space is Burnaby’s Loop Energy—a twenty-year overnight success story. The inspiration behind Loop dates back to 2000 when Chilliwack resident David Leger looked out his window and saw his view obscured by Metro Vancouver smog. Leger—who had no fuel cell experience—believed hydrogen fuel cells could address the problem and began working on a new design for plates within the fuel cell stack.

Over the years, working from his garage and relying on investments from friends and family, Leger and his team were able to start a company that led to 30 different patents for Loop’s trapezoid-shaped e-Flow system that according to the company, is able to generate more power and deliver increased fuel savings when compared with other similar-sized fuel cell alternatives. 

And while Leger may have been ahead of his time, the market is now catching up with his vision. Current Loop CEO, Ben Nyland, took over the company in 2016 and has focused commercial activity on the transit bus, delivery and long-haul truck OEM market. The company went public with a $100 million IPO in February 2021 and recently announced a successful implementation with Skywell New Energy Vehicles Group (Skywell) in Nanjing, China to install Loop’s e-Flow fuel cells in 10 public transit buses. Based on success, there is the opportunity to expand the arrangement to 300 buses.

Nyland sees developments in China as a huge opportunity for Loop and hydrogen fuel cells in general.

“One of the big drivers in China is a desire for energy independence,” Nyland says, pointing to the country’s systemic approach to increasing the supply of renewable energy as a replacement for oil and gas imports. Nyland says the Chinese previously released a five-year energy plan where hydrogen and fuel cells were identified as a strategic technology, and the current plan expands on the commitment. 

“In their current five-year strategy there is a tangible plan around how the country will build out a critical mass around the hydrogen and fuel cells supply chain and vehicles to make China a world leader in fuel cells,” Nyland says. “When China gets behind something . . . they create the critical mass.”

While leaders at these companies and in the industry are excited about the opportunities ahead, they acknowledge the hydrogen economy is still nascent and needs policy support to help lift all players in the space.

The federal government released its hydrogen strategy in December 2020 aimed to establish Canada as a global hydrogen leader, positioning hydrogen as a key part of Canada’s path to achieving the goal of net zero carbon emissions by 2050. 

And on July 5, BC became the first province in Canada to release a hydrogen strategy with more than 60 action items designed to support the Horgan government’s low carbon energy goals. The strategy’s near-term priorities include scaling up production of renewable hydrogen, establishing regional hydrogen hubs and deploying medium and heavy-duty fuel-cell vehicles.

Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation, says that in addition to a world-leading clean electricity system capable of helping to produce clean hydrogen, BC has the pieces in place to help companies like Loop, Ekona, Hydra, Ionomr, Ballard and others build upon the province’s leadership position in the hydrogen sector.

“We are a stable, well-governed jurisdiction where regulatory matters are predictable,” Ralston says. “There is a strong post-secondary education system creating a pool of talented people who can advance these industries. We have a population receptive to the social and climate benefits of low carbon initiatives. And ESG investors are bringing the capital to help grow companies and the technology.”

Hydrogen 2.0 in British Columbia is in good hands—and just getting started.

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