In a July 27 interview on CBC Halifax Mainstreet, Canada’s Minister of Power and Pure Sources, Jonathan Wilkinson, mentioned he had been assembly with EverWind Fuels whereas he was in Halifax. Wilkinson advised host Jeff Douglas that the 2023 federal price range was offering “very beneficiant” funding tax credit for corporations like EverWind, which can generate electrical energy and use the electrical energy to supply hydrogen.
“For the dimensions of the undertaking the businesses like EverWind and others are creating, [the investment tax credits] would rely within the many lots of of tens of millions of {dollars} for every undertaking,” mentioned Wilkinson.
EverWind has 4 lobbyists selling its pursuits to the elected officers and senior public servants in Ottawa, and one in every of them – EverWind’s CFO Matthew Tinari – has met with Wilkinson twice prior to now 12 months. That lobbying seems to have paid off.
Larry Hughes is founding fellow of the MacEachen Institute for Public Coverage and Governance, and professor {of electrical} and pc engineering at Dalhousie College. Hughes has regarded carefully on the varied funding tax credit within the 2023 federal price range for “clear electrical energy” and a “clear economic system.”
In an electronic mail to the Halifax Examiner, Hughes notes among the methods the federal price range can profit EverWind’s inexperienced hydrogen and ammonia undertaking at Level Tupper in Nova Scotia, and a second one it has deliberate in Newfoundland.
Hughes writes, “The price range is promising an funding tax credit score of 40% for hydrogen producers with emissions intensities under 450 grams of CO2e [carbon dioxide equivalent] per kilogram of hydrogen produced,” in the event that they meet employment necessities.
Hughes says there’s additionally the “clear hydrogen funding tax credit score” that’s anticipated to value $5.6 billion between 2023 and 2028, and an extra $12.1 billion between 2028 and 2035.
However even that’s not all.
Hughes notes that, “Hydrogen producers also can profit for investing in clear electrical energy tasks similar to wind or solar-electric with Indigenous teams which contribute to a net-zero grid.”
“The clear electrical energy funding tax credit score is a refundable 15% tax credit score,” he provides.
Tax credit = subsidies
Dalhousie College economics professor Talan Iscan tells the Halifax Examiner that these funding tax credit are “equal to subsidizing the enterprise by giving them direct money funds, with the distinction that the subsidies related to the funding tax credit are linked to the quantity of funding.”
Iscan says the funding tax credit score for “clear hydrogen” is controversial. He explains that it contains the manufacturing of “blue” hydrogen manufacturing powered utilizing pure gasoline (a deceptively benign title for a gasoline that that’s largely methane) and ineffective carbon seize and storage applied sciences, as is being performed in Alberta.
Thus, Iscan says, the clear hydrogen tax credit are “successfully a subsidy to grease and gasoline corporations in Alberta.”
Iscan was a signatory to a February 2023 letter from greater than 100 lecturers and 50 civil society organizations urging the federal authorities to not subsidize “clear” (fossil fuel-produced) hydrogen and carbon seize programs. Their submission was ignored.
‘Subsidy-harvesting tasks’
Julia Levin, affiliate director for nationwide local weather at Environmental Defence Canada, helped coordinate that letter. She tells the Examiner that hydrogen tasks also can qualify for funds from the $8 billion Internet Zero Accelerator Fund, a part of the Strategic Innovation Fund out of the federal division of Innovation, Science and Financial Improvement.
The federal registry of lobbyists exhibits that EverWind has utilized for funding from the Strategic Innovation Fund for its “renewable power undertaking.”
Levin provides, “We predict fairly huge subsidies for Atlantic Canadian hydrogen tasks.”
And there’s nonetheless extra public cash on the desk for hydrogen tasks.
Says Levin:
There’s additionally the Canada Infrastructure Financial institution. They have been advised that hydrogen is the precedence space and within the final [federal] price range they got two totally different $10 billion funds. And we’re seeing a number of provincial subsidies for hydrogen too. There are simply so many components of presidency which are subsidizing hydrogen.
“So I perceive why these tasks appeal to buyers, as a result of there appears to be zero danger to them,” Levin says. “The federal government is keen to take most of that danger.”
Levin calls them “subsidy-harvesting tasks.”
She’s not the one one.
‘Inexperienced-wishing’ and an epidemic of hydrogen ‘hopium’
Paul Martin is a chemical engineer with a 30-year historical past of working with, making, and utilizing hydrogen, and a member of the Hydrogen Science Coalition. He describes himself as a “tireless advocate for a fossil fuel-free future.”
Martin calls the hype over hydrogen for decarbonisation an “epidemic of hopium dependancy.”
“It’s a mixture of wishful pondering, magical pondering, and green-wishing,” Martin says in an interview.
In his copious writing on the hydrogen push, Martin mocks lobbyists’ claims that hydrogen is the “Swiss military knife” of the power transition, stating that each are “useful in a pinch” however “hardly ever the optimum device for any job.”
Martin, like Levin, is skeptical that tasks like EverWind’s are a step in direction of decarbonisation in Nova Scotia, or wherever else. In an electronic mail, Martin writes that the ammonia to be exported to Germany represents a small fraction of the quantity of Nova Scotia wind power wanted to make it. He says the numbers don’t add up:
Observe that my issues with this undertaking are associated to the “offtake.” Anyone who thinks the Germans will purchase 10 kilowatt hours (kWh) price of Nova Scotia wind electrical energy, and be happy with receiving at most solely about 2 kWh at vacation spot PLUS having to pay the price of all that costly capital tools, is kidding themselves. So to me, that makes the undertaking both a subsidy-harvesting scheme or one thing else lower than earnest. It’s not an environment friendly decarbonization technique, even when the ammonia bought by Germany weren’t wasted as a gasoline or to make hydrogen once more, however slightly was utilized in German chemical crops and agriculture.
If the ammonia have been transformed again to hydrogen and used as a gasoline in a gasoline cell or to burn in a gasoline powerplant in Germany, Martin explains that the power loss could be five-fold as a result of the hydrogen would produce solely 20% of the power utilized in Nova Scotia to supply it.
“I discover it very tough to think about these wind-to-hydrogen-to-ammonia-to-power-in-Germany tasks as being economical relative to many different options,” says Martin.
He means that such tasks will produce solely the quantities of ammonia they’re sponsored to supply, “with taxpayers paying almost all the value.” With out large subsidies in Canada and Germany, Martin says it’s tough to see how the tasks shall be economically viable.
“Hydrogen itself is just too costly to waste as both a heating or automobile gasoline, and as a option to make electrical energy once more, it’s costly to retailer till you want that electrical energy,” he says. Martin notes that even then, two-thirds of the power has already been misplaced within the course of of constructing the hydrogen.
As for makes use of for the inexperienced hydrogen or ammonia in Nova Scotia, and EverWind claims that their web site “with street, rail and water entry gives the power to distribute the inexperienced hydrogen into Nova Scotia,” Martin is sceptical.
He says hydrogen is never moved round as a result of this can be very tough to take action besides in minuscule quantities, including:
Whereas 99% of world hydrogen and therefore hydrogen-derived ammonia manufacturing is “black,” or constructed from fossil fuels with out carbon seize, Nova Scotia has no black ammonia crops. Its agricultural customers would require extra nitrate or urea than ammonia as a result of local weather, could be my guess, and I don’t see plans to make nitrate or urea by EverWind. There aren’t any different main hydrogen customers in Nova Scotia that I’m conscious of. The closest main oil refineries are in New Brunswick or Newfoundland – all of the Nova Scotia refineries have been shut down. So in the event that they do say, “Sure, we’re planning to promote hydrogen and ammonia in Nova Scotia,” it might be for DUMB makes use of of ammonia and hydrogen like transport, as a transport gasoline (ammonia as a transport gasoline is terrifying to me as a chemical engineer – it is going to inevitably result in main lack of life as a result of ammonia is a poison gasoline), or heating. And no, burning ammonia or hydrogen in cement crops isn’t a great use of the gasoline both.
In Martin’s view, the hydrogen push is a distraction, and it might be much better to make use of renewable electrical energy straight, slightly than to supply ammonia from hydrogen, or cumbersome hydrogen that might should be saved.
Hydrogen storage?
In 2022, EverWind, underneath its numbered subsidiary 4398437 Nova Scotia Firm, and two different corporations, Australia’s Fortescue and Inexperienced Hydrogen Worldwide, took out lots of of exploration licenses masking greater than 100,000 hectares on underground salt deposits in Nova Scotia.
Martin factors out that if any hydrocarbons or hydrogen are to be saved underground the place there are salt deposits, first the salt brine must be pumped out.
Earlier plans to do exactly that haven’t gone effectively in Nova Scotia.
Because the Examiner reported in November 2022:
Nova Scotians haven’t forgotten the extremely controversial undertaking by Alton Fuel Pure Fuel Storage undertaking, which deliberate to flush brine out of salt caverns close to Stewiake, and get rid of it into the Shubenacadie River.
There was intense Mi’kmaw opposition, spearheaded by the Grassroots Grandmothers, to the Alton Fuel undertaking, and it was cancelled in 2021.
‘I’m not anti-hydrogen, I’m anti-bullshit’
Martin factors out that hydrogen molecules are extraordinarily vital, and hydrogen has vital makes use of in chemical processes as a decreasing agent that doesn’t produce carbon dioxide. Thus, he says, it’s sensible to make use of hydrogen in producing iron steel from iron ore, and certainly 10% of the world’s hydrogen is already used for this.
“So these are the excessive precedence makes use of for hydrogen, changing current makes use of of hydrogen which are constructed from fossil fuels with out carbon seize,” Martin says. “The enterprise of constructing electrical energy out of it, whether or not to run a automobile or worst of all to make consolation warmth in house, these are the dumbest of the dumb purposes.”
He laughs off criticism that he’s anti-hydrogen. “I made hydrogen for 30 years,” Martin says. “I’m anti-hydrogen? No, I like hydrogen. I hate to see individuals speaking about burning it. It’s silly. It’s extraordinarily costly. It is not sensible to me.”
“I’m not anti-hydrogen, I’m anti-bullshit,” Martin says. “And that is bullshit, these things.”
Martin notes that 120 million tonnes – 99% – of the hydrogen made annually on this planet is constructed from fossil fuels with out carbon seize, and its greenhouse gasoline emissions exceed these of all the aviation business.
“Hydrogen itself is an enormous decarbonization drawback,” he says. “And regardless of that truth, now we have undertaking proponents desirous to waste it as a gasoline. That doesn’t make sense as a decarbonization technique, so it have to be about one thing else.”
‘Being pushed by the fossil gasoline business’
Requested the place all of the hydrogen hype originated, Martin replies:
It’s being pushed by the fossil gasoline business, which is aware of their relevance will disappear in a carbonized future with out hydrogen. After which there’s a group of folks that ranges from the earnest however slightly credulous, to self-interested. Or to make use of the opposite unapologetic time period that was as soon as used concerning the varied teams in Western international locations by the Soviets, the “helpful idiots” of the fossil gasoline business.
In Europe, Martin says the hydrogen hype is coming largely from a bunch known as Hydrogen Europe. Hydrogen Europe describes itself as “the European affiliation representing the curiosity of the hydrogen business and its stakeholders and selling hydrogen as an enabler of a zero-emission society.”
Says Martin:
And who’s Hydrogen Europe? It’s a mouthpiece for the fossil gasoline business and different financially events, occupied by the likes of Shell. Many of those corporations revenue from the try and construct a “hydrogen economic system” at public expense, even when that try is a failure.
In Canada, Martin says the principle driver of the hydrogen rush is Alberta’s gasoline business, the place corporations make “blue” hydrogen utilizing pure gasoline and trying to bury the carbon dioxide. Though the carbon seize is extraordinarily costly and ineffective, and the ensuing hydrogen is what Martin calls “blackish blue bruise-coloured,” these concerned in carbon seize and storage nonetheless qualify for a part of the federal funding tax credit for “clear hydrogen.”
‘Inconvenient truths about hydrogen’
Company Europe Observatory calls itself “a analysis and marketing campaign group working to reveal and problem the privileged entry and affect loved by firms and their foyer teams” in European policy-making. The Observatory has regarded carefully on the hydrogen rush and who’s behind it, and writes:
There are two inconvenient truths about hydrogen. One is the truth that solely a tiny proportion of hydrogen is inexperienced and the overwhelming majority is made utilizing fossil fuels; the second is that manufacturing of inexperienced hydrogen at such giant scales is unsustainable. However business and lobbyists promote “inexperienced hydrogen” as a lure to make sure the elevated use of hydrogen total…
Not solely is inexperienced hydrogen at such giant scales unsustainable, it really works as a Malicious program for fossil hydrogen. The push for inexperienced hydrogen and the hydrogen economic system has at all times been supported by Europe’s oil and gasoline majors, who see it as a again door for hydrogen from fossil gasoline.
In Martin’s view, inexperienced hydrogen and ammonia tasks like EverWind’s in Nova Scotia don’t make sense:
It appears to me there’s a loopy notion that Germans are going to subsidize hydrogen manufacturing everywhere in the world, , and purchase all of it within the type of ammonia, as a result of you possibly can’t ship it as hydrogen … And this [notion] is getting used to rope in Canadian taxpayer largesse within the type of funding tax credit, together with credulous investor cash.
Martin advises that somebody ought to do the mathematics to calculate what’s going to occur to the hydrogen belongings when the subsidies all come off.
Requested what he thinks Nova Scotia needs to be doing to get off fossil fuels to handle the local weather disaster, Martin says:
I want that, for heaven’s sake, Nova Scotia would get its act collectively and construct an even bigger interconnector with Labrador. And tonnes and tonnes of wind to again up that interconnector and use that to decarbonize its personal grid. That might be slightly fantastic.
This week EverWind shall be unveiling its plans for the primary two of 4 new wind farms in Nova Scotia, as reported in the primary a part of this collection.
Nonetheless, the wind captured by these farms is not going to be was electrical energy to assist Nova Scotians scale back their dependency on coal and decarbonize their grid, however to supply inexperienced hydrogen and ammonia – almost all of which shall be shipped to Europe.
