Two Canadian companies, Suncor Energy and ATCO are collaborating on early-stage design and engineering for a potential blue hydrogen project near Fort Saskatchewan, Alberta.

Blue hydrogen refers to hydrogen produced using natural gas, with the CO2 emissions generated during the process captured and stored.

According to the partners, the project could produce more than 300,000 tonnes of hydrogen per year, reduce Alberta’s CO₂ emissions by more than two million tonnes per year, significantly advance Alberta’s hydrogen strategy, generate substantial economic activity and jobs across the province, and make a sizable contribution to Canada’s net zero ambition.

Suncor Energy is Canada’s leading integrated energy company, whose controversial operations include oil sands development, production and upgrading, offshore oil and gas, and petroleum refining in Canada and the US.

The hydrogen production facility would be located at ATCO’s Heartland Energy Centre near Fort Saskatchewan and could be operational as early as 2028 provided, say the partners, that it has the required regulatory and fiscal support to render it economic. In addition to supplying hydrogen to Suncor and the Alberta gas grid, the project would make hydrogen volumes available for Alberta’s other industrial, municipal and commercial transport users.

The parties anticipate that Suncor would construct and operate the hydrogen production and CO₂ sequestration facilities and ATCO would construct and operate associated pipeline and hydrogen storage facilities. The hydrogen production facility design would be capable of being replicated.

It is expected that 85% of the produced clean hydrogen would be used to supply existing energy demand. Specifically, 65% of the output would be used in refining processes and cogeneration of steam and electricity at the Suncor Edmonton Refinery, reducing refinery emissions by 60%. In addition, approximately 20% of the output could be used in the Alberta natural gas distribution system, also further reducing emissions.

Although several provincial and federal policies, fiscal programs and regulations have been put in place to support decarbonization and the development of a low-carbon fuels industry, Suncor Energy and ATCO maintain that further regulatory certainty and fiscal support is required for the project to progress to a sanctioning decision.