Suncor to Develop Hydrogen Project in Alberta Amid Renewables Push

(Reuters) — Suncor Energy will develop a clean hydrogen project near Fort Saskatchewan, Alberta, in one of the most significant steps taken by an oil sands producer to cut greenhouse gas emissions and tackle climate change.

The project, with ATCO Ltd, would produce more than 300,000 tons per year of clean hydrogen, reducing Alberta's carbon dioxide emissions by more than 2 million tons per year.

Suncor will construct and operate the hydrogen production and carbon dioxide sequestration facilities, while ATCO will construct and operate associated pipeline and hydrogen storage facilities.

Suncor and ATCO expect to make a sanctioning decision in 2024 and, if finalized, the project could be operational by 2028.

Canada's cash-rich oil sands firms have been facing mounting pressure to spend on energy transition at a time when Prime Minister Justin Trudeau has set a goal of net-zero emissions for the country by 2050.

Canada emits 729 million tons of greenhouse gases annually.

The country already produces 'grey' hydrogen using emissions-intensive industrial processes. The Fort Saskatchewan project would produce 'blue' hydrogen, which uses the same process but captures and stores the resulting carbon dioxide.

"One of the opportunities for the journey to net zero for the country is to convert grey hydrogen to clean hydrogen," Suncor Chief Executive Mark Little said in an interview.

Around 90% of the emissions in the hydrogen production process would be captured, the companies said. Roughly 65% of the produced hydrogen would be used in refining processes at the Suncor Edmonton refinery in Alberta, while another 20% could be used in the Alberta natural gas grid.

The multi-billion dollar project requires further regulatory certainty and financial support from government to go ahead, said ATCO CEO Nancy Southern.

"We need to get on with it if we want to achieve that 45% (emissions reduction) by 2030," Southern said. 

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