Air Products to receive funding for Alberta, Canada hydrogen energy complex

At a news conference today in Edmonton, Alberta, Canada, the Canadian federal and provincial governments announced approximately $475 million (CAD) in project funding for Air Products’ multi-billion-dollar landmark net-zero hydrogen energy complex in Alberta.

The facility, already being executed, will make Edmonton, Alberta the centre of western Canada’s hydrogen economy and set the stage for Air Products to operate one of the world’s most competitive and lowest-carbon-intensity hydrogen networks.

At the event held at the Northern Alberta Institute of Technology, Air Products’ Chairman, President and Chief Executive Officer Seifi Ghasemi, Minister of Innovation, Science and Industry Canada the Honourable François-Philippe Champagne, Alberta Minister of Energy the Honourable Peter Guthrie, and several other esteemed federal, provincial and City of Edmonton officials gathered to make the joint announcement.

Under separate agreements, Air Products will receive:

  • $300 million (CAD) from the Strategic Innovation Fund (SIF), the Government of Canada’s program designed to spur innovation for a better Canada by providing funding for large projects and national innovation ecosystems. Air Products’ project funding specifically comes from the Net-Zero Accelerator Program targeting industrial decarbonization in support of Canada’s 2030 greenhouse gas emissions reduction targets and its 2050 net zero emissions goal, among other objectives.
  • Over $160 million (CAD) from the Alberta Petrochemicals Incentive Program (APIP), part of Alberta’s Recovery Plan to bring multi-billion dollar investments to industrial projects throughout Alberta, add value to natural gas production in the province, and help to strengthen, diversify and bring new life into the province’s economy and create new opportunities and jobs for Albertans.
  • $15 million (CAD), which was previously announced, from Emissions Reduction Alberta’s Shovel-Ready Challenge, which aims to help deliver on the province’s environmental and economic goals by investing in clean technology that cuts greenhouse gases, attracts investment and creates jobs in Alberta.

“From the beginning, Air Products has truly and sincerely appreciated the partnership of the Government of Canada and the Government of Alberta, as well as the continued support of the City of Edmonton, in welcoming this visionary clean energy complex to Alberta. We are pleased to recognize the successful completion of support agreements that have allowed us to make additional engineering enhancements to reach an even cleaner world-class design. This facility will be a first mover in helping to decarbonize mobility and industrial markets, further demonstrated by an already announced and substantial off-take supply contract. Today’s announcement represents visionary leadership and a commitment to move humanity forward in the energy transition. It shows what is possible when effective collaboration and governmental support align to drive the energy transition,” said Ghasemi.

The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry said, “We need to be bold and seize the moment, and that’s exactly why we’re investing in Air Products. We are prioritizing a strong and sustainable economy, helping create well-paying jobs, and ensuring a cleaner future. Hydrogen is one of the key elements for our path to net zero, and that’s why we’re making these important investments in Canada’s energy sector. We’re also ready to build on this ambition by supporting and working with high-emitting sectors in decarbonizing, creating more jobs across the country and growing for generations to come.”

The Honourable Danielle Smith, Premier of Alberta said, “Alberta is Canada’s hydrogen powerhouse and projects like this will create jobs, diversify the economy, and build additional clean energy capacity for use across Western Canada. With such a huge attachment in the hydrogen market, our government’s Alberta Petrochemicals Incentive Program is making us the most attractive jurisdiction for companies looking to invest in hydrogen. Alberta’s economy will continue to charge ahead full steam with an investment climate that encourages businesses to grow and fuel job growth.”

The Honourable Johnathan Wilkinson, Minister of Natural Resources said, “Unlocking the potential of hydrogen is an essential part of the federal government’s plan for a sustainable economic future – not just for the domestic opportunities for emissions reductions but also for its potential as an export opportunity: to provide clean energy to countries around the globe.”

The Honourable Randy Boissonnault, Minister of Tourism and Associate Minister of Finance // Member of Parliament for Edmonton Centre said, “Today’s announcement is an historic investment in the net-zero economy of the future, and in the Edmonton region. This investment will further position our city as a leading hydrogen production hub for Canada and North America and is part of our government’s plan to ensure prosperity for generations to come. This investment is more proof that we are building an economy that works for everyone.”

The Honourable Pete Guthrie, Minister of Energy, Government of Alberta said, “Alberta’s hydrogen sector is growing rapidly, with more and more hydrogen-powered projects coming online over the coming years. With more than $161 million in funding for Air Products’ clean hydrogen facility, we are creating jobs, growing the energy sector and bringing clean hydrogen to customers across Western Canada.”

Edmonton Mayor Amarjeet Sohi said, “Today’s announcement brings Edmonton one step closer on the energy transition journey towards becoming a carbon-neutral city. Investing in an Edmonton-based clean hydrogen facility will help with our city’s post-pandemic economic recovery efforts and will allow Canada to advance clean energy in the global hydrogen market. I am appreciative that both our federal and provincial government partners and Air Products are prioritizing Edmonton’s climate and hydrogen goals, and I look forward to future collaborations that will advance this work.”

Today’s announcement marks the milestone of the successful completion of Memorandum of Understanding agreements referenced in June 2021 when Air Products, the world leader in hydrogen production, and its subsidiary Air Products Canada Ltd., in conjunction with the Government of Canada and the Province of Alberta, initially announced the multi-billion-dollar plan to build the landmark net-zero hydrogen energy complex.

Canada’s clean energy diversification strategy and regulatory framework make clear that hydrogen is a key enabler for carbon neutrality by 2050. Aligned with that vision, Air Products began development in 2018 on the core of this world-scale energy complex in Edmonton, which will begin with a transformative net-zero hydrogen production and liquefaction facility.

Since the initial facility announcement, Air Products has proceeded with engineering, procurement, and construction preparatory site work, as well as marketing the clean hydrogen to be produced. In September 2022, Air Products announced a customer agreement for approximately 50 percent of the low-carbon hydrogen output from the 165 million standard cubic feet per day hydrogen production complex. This off-take agreement also saw Air Products increase its facility investment from $1.3 billion (CAD) to $1.6 billion (CAD), as well as including beneficial engineering enhancements to the production process, further substantially reducing greenhouse gases at the net-zero facility.

The Alberta project relies on an innovative combination of well-established technologies to jump-start an ambitious transition to carbon neutrality and is consistent with Air Products’ growth strategy of executing global megaprojects that enable a transition to a cleaner, more sustainable energy future. It will take advantage of Canada’s abundant and low-cost natural resources, extensive infrastructure, highly skilled workforce, and innovative spirit to be a model for other jurisdictions around the globe.

“This new complex is just the beginning for this site. The showcase facility will have it all – a world scale auto-thermal reformer, carbon capture operations achieving 95 percent removal, a power generation facility fueled 100 percent by hydrogen, a 35 tonnes-per-day hydrogen liquefaction facility, a world-scale air separation facility producing clean liquid oxygen and nitrogen, and connection to Air Products’ existing Alberta Heartland Hydrogen Pipeline network for enhanced customer reliability, and phased decarbonization of the entire network. This will truly be a state-of-the-art facility,” said Dr. Samir J. Serhan, Chief Operating Officer at Air Products.

Serhan added that as Canada’s leading hydrogen supplier, Air Products is also considering further investments in both existing and new hydrogen facilities in Alberta and across Canada, helping customers improve their sustainability performance while bolstering the hydrogen economy and Canada’s energy transition.

The hydrogen liquefaction facility will play a critical role in the developing hydrogen economy across Western Canada. Hydrogen will help to meet society’s need for sustainable transportation, especially for heavy duty vehicles where hydrogen excels compared to other technologies. Hydrogen is seen as having a substantial technological advantage over battery electric vehicles in heavy-duty applications due to those vehicles’ duty-cycles, especially in Canada’s extreme climate conditions.

As the world’s largest hydrogen producer, Air Products has experience across the full value chain for hydrogen and is driving sustainable growth by building, owning, and operating the world’s largest production, gasification, carbon capture, transportation and fueling projects. With over 60 years of global hydrogen experience operating in over 50 countries, Air Products has the proven capability and know-how to make hydrogen through all available production methods and to distribute this increasingly important emission-free fuel safely, reliably, and economically.

Air Products Canada currently operates three hydrogen production facilities in Alberta, and a 55-kilometer hydrogen pipeline in the Alberta Industrial Heartland. The company also operates a hydrogen production facility, a 30-kilometer pipeline network and a liquefaction facility in Sarnia, Ontario. The company’s excellent safety record includes operating over 1,100-kilometers of hydrogen pipelines worldwide with no incidents.

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