Opening Statement before the Standing Committee on Public Accounts

Hydrogen’s Potential to Reduce Greenhouse Gas Emissions

(Report 3—2022 Reports of the Commissioner of the Environment and Sustainable Development)

2 December 2022

Martin Dompierre
Assistant Auditor General

Mr. Chair, thank you for this opportunity to discuss our report on hydrogen’s potential to reduce greenhouse gas emissions, which was tabled in Parliament on April 26, 2022. I would like to acknowledge that this hearing is taking place on the traditional, unceded territory of the Algonquin Anishinaabe people. With me today is Philippe Le Goff, the principal responsible for this audit.

The potential role hydrogen could play in net‑zero energy systems and decarbonization is gaining significant global interest. Hydrogen can be used to drive down emissions where electrification is not technically or economically feasible, such as in energy-intensive industries. However, hydrogen’s potential for decarbonization depends on how the hydrogen is produced and used.

For this audit, we wanted to know whether Environment and Climate Change Canada and Natural Resources Canada comprehensively assessed the role that hydrogen should play as a pathway to reach Canada’s climate commitments.

Overall, we found that the 2 departments had different approaches to assessing the role hydrogen should play in reducing greenhouse gas emissions. Environment and Climate Change Canada expected to achieve 15 megatonnes of carbon dioxide equivalent emission reduction in 2030, whereas Natural Resources Canada projected up to 45 megatonnes by 2030.

To assess the demand for hydrogen, Environment and Climate Change Canada assumed a blending mandate for hydrogen and natural gas that was not based on any existing policy at the provincial or federal level. In addition, this approach was uneconomical based on the current trend of carbon pricing.

For its part, Natural Resources Canada favoured a transformative scenario that assumed the adoption of aggressive and sometimes non‑existent policies, along with an ambitious uptake of new technology.

It is important that Environment and Climate Change Canada and other federal departments adopt a standard framework to estimate the emission impacts of proposed policies, clean technologies, and fuels.

Generally, Environment and Climate Change Canada did not distinguish existing policies and measures from those not yet announced or implemented. We found that Environment and Climate Change Canada’s climate plan that was in effect at the time of the audit was based on measures that sometimes had not been implemented and that relied on some policies that did not have the necessary legislative and financial support.

Environment and Climate Change Canada would benefit from a stronger framework for peer review, public scrutiny, and quality assurance and control in its modelling exercises. This is important because it would improve the quality and transparency of—and the trust in—the department’s climate change modelling in future emission reduction plans.

Mr. Chair, this concludes my opening remarks. We are pleased to answer any questions the committee may have. Thank you.