Hydrogen is versatile. Its applications are expanding well beyond its current use as an industrial feedstock. Today, hydrogen also functions as an energy carrier, enabling its use as a fuel across a variety of sectors. Low-carbon hydrogen has the potential to be a source of clean energy to complement electricity as we look to a decarbonized future.
What is Hydrogen and How is it Made?
Hydrogen is the simplest and most abundant element in the universe, with an atomic number of one. On Earth, it exists as a colourless, odourless, and highly flammable gas. Historically, its main use has been as an industrial feedstock, particularly in ammonia and methanol production and in oil refining for hydrocracking and desulfurization.
Most hydrogen used for industrial purposes has historically been produced from natural gas. This form of hydrogen, often called grey hydrogen, has a high carbon footprint because of the carbon dioxide released during production through a process called methane reformation. Alternatively, low-carbon hydrogen is produced with significantly reduced carbon intensity.
To distinguish between production methods, the industry has adopted a colour-based classification system. While no universal standard exists, organizations such as the World Economic Forum (WEF) and the International Energy Agency (IEA) use this framework to describe hydrogen’s production pathway:
High Carbon Intensity:
- Grey Hydrogen: Produced from natural gas without carbon capture; high carbon intensity.
- Brown Hydrogen: Produced from coal without carbon capture
Low Carbon Intensity:
- Blue Hydrogen: Produced from natural gas with carbon capture, utilization, and storage (CCUS) to reduce carbon intensity.
- Green Hydrogen: Produced from water through electrolysis powered by renewable energy such as wind or solar; near-zero or low carbon intensity.
- Turquoise Hydrogen: Produced from natural gas through a process called pyrolysis, yielding hydrogen and solid carbon as a byproduct.
- Pink Hydrogen: Produced from water via electrolysis powered by nuclear energy.
Hydrogen Across the Value Chain
Foresight Canada's Ventures to Value Chains: Hydrogen report highlights strengths and growth opportunities for hydrogen technology across the value chain. Typically, the hydrogen value chain includes three stages:
- Production – sourcing and generating hydrogen.
- Storage and Distribution – ensuring safe, efficient delivery.
- Application and Use – enabling industrial, transportation, and energy solutions.
Mapping this value chain helps identify where innovation and investment are most needed to scale hydrogen adoption.
The Role of Hydrogen in Canada Today
Canada has significant potential to leverage hydrogen to accelerate the country’s clean energy transition. In 2020, the Government of Canada released the Hydrogen Strategy for Canada, positioning the country as a global leader in the production, use, and export of clean hydrogen. The strategy identifies hydrogen as a foundational solution for achieving net zero emissions by 2050 while also driving job creation, export growth, and environmental protection. Hydrogen applications are diverse. Some are more suitable than others depending on economic benefits, regional needs, infrastructure availability, workforce skills, and geographical considerations. Insights from our research show promise in transportation applications, including hydrogen fuel cell electric vehicles (FCEVs), especially for long-distance trucking, and hydrogen-based fuels like methanol and ammonia.
To maximize these opportunities, Foresight, in collaboration with the BC Ministry and Energy and Climate Solutions' Clean Energy and Major Projects Office (CEMPO), has explored the development of regional hydrogen hubs in key economic regions across British Columbia. By co-locating hydrogen production and end-use applications, these hubs can create balanced markets while driving local economic growth.
Challenges & Opportunities Ahead
High production costs—especially for green hydrogen—remain a barrier, driven by electrolyzer expenses and renewable power requirements. Infrastructure gaps for storage and distribution have also slowed widespread adoption. In addition, policy and market uncertainty can limit investment.
Addressing these barriers is essential for hydrogen to realize its role as a clean energy solution. With continued advances in technology, supportive policy frameworks, and strategic investment, hydrogen could become a key tool in our toolbox as we seek to decarbonize industry, transportation, and energy systems.
Learn more about Foresight’s work in the hydrogen sector and how we’re advancing clean hydrogen development.
