Navigating hydrogen transportation challenges in British Columbia

At a glance

Hydrogen Transportation and Infrastructure Report, by Aislinn Crawford, Foresight Canada, Dec. 17, 2024. 

This report explores the potential of hydrogen as a clean energy carrier in British Columbia (BC), examining transportation methods, challenges, and opportunities. Although existing infrastructure — such as pipelines, highways, and railways — can accommodate transporting hydrogen, adaptation requires significant upgrades and strict safety protocols due to the element’s unique properties. Hydrogen carriers, including ammonia, methanol, and liquid organic hydrogen carriers (LOHCs), provide more efficient options for storage and transport compared to pure hydrogen. However, transporting these carriers also requires rigorous environmental and safety assessments, while their conversion processes remain costly, energy-intensive, and emissions-heavy.

BC has a favorable policy and regulatory environment for hydrogen. The BC Hydrogen Strategy, published in 2021, aims to make the province a global hydrogen leader by 2050. Several hydrogen and fuel sector organizations are already established, and the province benefits from abundant resources for green hydrogen production, including affordable clean energy, natural gas, and freshwater. Foresight Canada’s report underscores BC’s potential as a key location for hydrogen production and distribution, provided transportation barriers are addressed. It emphasizes the importance of establishing regional hydrogen hubs and building partnerships with Indigenous communities and industry stakeholders. But success depends on falling production costs, growing demand, and the emergence of a robust hydrogen economy in Canada and globally. By raising critical questions about scaling hydrogen transportation sustainably and balancing economic feasibility with environmental and safety concerns, the report offers insights for other regions navigating similar energy transition challenges.

Key findings

• Hydrogen embrittlement challenges pipeline transport: Pure hydrogen is absorbed into equipment or piping material, reducing its ductility, toughness, and tensile strength. It therefore requires substantial upgrades or new infrastructure for safe transportation.
• Strong growth potential for green ammonia and methanol markets: The Canadian ammonia market, at 3,300 kilotons in 2023, is projected to grow 3.8 per cent annually until 2034. Methanol demand is increasing at 3.7 per cent annually, driven by interest in low-carbon shipping fuels.
• Developing regional hydrogen hubs is critical for scaling infrastructure: BC’s hydrogen strategy includes plans for four regional hubs to co-locate hydrogen production and consumption in the Lower Mainland, Vancouver Island, Northeast BC, and the Interior.
• Adapting existing gas pipelines for hydrogen blending is feasible but requires careful assessment: Up to 20 per cent hydrogen by volume can be blended into natural gas pipelines under certain conditions. However, this is subject to detailed engineering studies and risk management.
• Rail and highway infrastructure require upgrades for hydrogen transport: Existing networks provide a basis for hydrogen transport. However, safety enhancements and infrastructure adaptations are needed, especially in northern regions and branch lines. 
• BC’s clean electricity supply and skilled workforce provide a strong foundation for a hydrogen economy: With over 1,300 hydrogen sector employees and plans to invest $35 billion in clean electricity expansion over the next decade, BC is well-positioned to support hydrogen production and distribution.

Take a look

Bigger picture

Foresight Canada’s report highlights hydrogen’s potential to decarbonize hard-to-electrify sectors, such as heavy-duty transport and industrial heat, making it a vital part of the energy transition. However, it also highlights the difficulties in transporting this clean energy carrier. Hydrogen, the smallest molecule on Earth, is prone to escape. It is currently most commonly transported in its pure form as a gas or a liquid, via railway, road, and occasionally through pipelines. Gaseous hydrogen requires compression to high pressures (>160 barg). Liquid hydrogen must be stored at ultra-low temperatures (-253°C), consuming 10 to 13 kWh/kg — about 30 per cent of its energy value. Heavy insulation is essential to prevent vaporization, and the energy-intensive liquefaction process increases the environmental footprint. Additionally, hydrogen’s flammability and difficulty in leak detection, due to its colorless and odorless nature, elevate safety risks, particularly in enclosed spaces.

These transportation challenges have led to the exploration of hydrogen carriers, including:

• Anhydrous ammonia: An inorganic compound of nitrogen and hydrogen that requires less energy for liquefaction (-33°C) and consumes less than one per cent of stored energy during the process.
• Methanol: An organic compound that remains liquid at standard temperature and pressure.
• LOHCs: Compounds that absorb and release hydrogen through chemical reactions under controlled pressure, temperature, and catalysts. LOHCs remain liquid at room temperature and are compatible with existing liquid fuel infrastructure.

While these carriers offer logistical advantages, they require chemical reactions to bind and release hydrogen. This adds complexity, cost, and energy consumption. Methanol and LOHCs offer the simplest transportation solutions, as they do not require prior compression or insulated vessels. Transportation densities vary, with ammonia and methanol achieving higher efficiency (approximately 108 kg H₂/m³ and 99 kg H₂/m³, respectively) compared to gaseous hydrogen (around 18.7 kg H₂/m³) and liquid hydrogen (approximately 71 kg H₂/m³), as well as LOHCs (about 47 kg H₂/m³).

Hydrogen, ammonia, methanol, and LOHC can all be transported by pipelines. However, existing infrastructure requires evaluation and potential upgrades, depending on the hydrogen form, the location of production, and end users. Pure hydrogen transport poses risks, such as permeation, leakage, and embrittlement, necessitating expensive upgrades and specialized compression technology. Blending up to 20 per cent hydrogen into natural gas pipelines is possible under certain conditions, though older pipelines may still face embrittlement risks, requiring detailed engineering assessments. While ammonia, methanol, and LOHCs do not face the same embrittlement issues, they still require thorough engineering assessments and, in some cases, new pipeline construction.

Hydrogen transport by truck or rail requires minimal infrastructure modifications. Gaseous hydrogen can be transported in tube trailers at pressures of 180-500 bar, with advanced systems reaching pressures over 900 bar. Liquid hydrogen, while offering greater transport capacity, requires highly insulated tankers and consumes more energy. Hydrogen carriers such as ammonia, LOHCs, and methanol are also suitable for truck and rail transport but must comply with strict safety standards. For instance, a train derailment and fire in North Dakota in July 2024, involving rail cars carrying anhydrous ammonia, sulfur, and methanol, highlighted the significant risks of transporting these hazardous materials and the importance of stringent safety protocols.

Rail is more effective for transporting large volumes, but highways provide greater network connectivity, especially when it comes to BC’s northern regions. However, extreme weather events, such as flooding and landslides, pose risks to reliable hydrogen transport by any mode — pipeline, rail, or road.

From a safety perspective, ammonia poses the highest environmental risk, while pure hydrogen, though non-toxic, is highly explosive under certain conditions. Ammonia, methanol, and LOHCs are also flammable in their liquid states. Developing new hydrogen transport infrastructure — such as pipelines, highways, or railways — would necessitate environmental assessments under the BC Environmental Assessment Act to evaluate potential impacts on air, water, soil, biodiversity, and local noise levels. While existing pipelines offer a lower environmental footprint, they still require retrofitting and the installation of new compression equipment. Furthermore, truck and rail transport could contribute to greenhouse gas emissions, depending on the fuel type, transportation distance, and load.

Communities may resist pipeline construction due to concerns about health impacts, environmental degradation, and displacement risks. To mitigate these challenges, developers should avoid areas of cultural or sacred significance and actively collaborate with local and Indigenous communities. In accordance with Section 35 of the Constitution Act, BC is required to consult and accommodate Indigenous groups on projects affecting their rights. This process includes consensus-seeking as part of the environmental assessment, aligning with the UN Declaration on the Rights of Indigenous Peoples (UNDRIP). These considerations would affect the feasibility of hydrogen transportation projects, whether by pipeline, road, or rail. Foresight Canada’s report emphasizes the need to diversify hydrogen carriers and tailor transportation methods to suit regional contexts.

Regional collaboration is key to building a viable hydrogen economy. BC’s hydrogen hubs approach, similar to Germany’s strategy of clustering production near industrial demand centers, can help reduce transportation costs, create jobs, and foster partnerships with Indigenous communities. The report’s focus on integrating hydrogen into existing infrastructure could also provide a roadmap for other jurisdictions, highlighting a broader trend of repurposing legacy infrastructure for clean energy.

Countries like Australia and Japan are making significant investments in green hydrogen, but the long-anticipated hydrogen economy capable of competing with fossil fuels remains in its early stages. Last year, EU auditors highlighted significant challenges across the entire hydrogen value chain, warning that “the EU is unlikely to meet its 2030 targets for the production and import of renewable hydrogen,” set at 10 million tonnes each. A key issue is the distribution of EU funding for hydrogen projects — with an estimated €18.8 billion allocated for the 2021–2027 period — being spread across multiple programs. This dispersal makes it difficult to target investments effectively. EU auditors have recommended that the union concentrate its funding on specific areas of the value chain and prioritize industries where hydrogen offers the greatest impact. This targeted approach is sometimes referred to as the “hydrogen ladder.”

Many potential applications for hydrogen, such as in residential heating and road transport, already have more cost-effective and efficient alternatives (electric boilers and vehicles). In New Zealand, the total demand for green hydrogen would be around 2.8 Mt/y if all technically feasible applications switched to hydrogen. However, if hydrogen use is limited to areas where it is the only viable option for decarbonization, this demand would decrease significantly, falling to 1 Mt/y or less.

The high costs associated with hydrogen infrastructure development present a significant challenge. Germany’s plan to build a hydrogen network, including 9,666 kilometers of pipelines, is estimated to cost around €19.7 billion. When factoring in the construction of electrolysis plants and the expansion of renewable energy capacity, total costs could reach €65-80 billion by 2030. A significant portion of this funding is expected to come from utility companies, network usage fees borne by consumers, and tax revenues, as private investors still regard hydrogen projects as too high-risk.

Other factors continue to curtail widespread hydrogen production and use, such as strict definitions of green hydrogen that limit subsidies, and stringent rules on additionality. For example, the EU’s Delegated Acts mandate that green hydrogen must be produced exclusively with additional renewable energy and be produced at times when the electrolysers are producing energy. Rules like these prevent green hydrogen production from depleting renewable energy on the grid, which would be replaced with fossil fuels. Critics argue that such regulations significantly increase costs, limiting the potential expansion of green hydrogen projects. Some estimates suggest such requirements add approximately €2.40/kg ($2.66) to the cost of hydrogen production.

Other regions are adopting more flexible approaches to overcome these challenges. The U.S. has expanded full tax credits to firms producing hydrogen through methods beyond electrolysis, such as using natural gas if they use carbon capture technology to capture and sequester the emissions, and leveraging portions of nuclear power plants if the credits help to prevent reactors from retiring. Support for these measures from some Republican members of Congress indicates they could continue under the incoming Trump administration.

Challenges and opportunities

Key barriers to hydrogen transportation and infrastructure in BC identified in the report:

• High costs of infrastructure upgrades: Significant investment is required to retrofit or build new hydrogen pipelines, rail systems, and storage facilities due to the element’s unique properties.
• Energy-intensive conversion processes: Dehydrogenation of ammonia, methanol, and LOHC requires substantial energy, making large-scale use costly and less efficient.
• Regulatory and safety challenges: Strict safety standards for transporting hydrogen and its carriers add complexity, increasing both time and costs.
• Geographical constraints in remote regions: Northern BC and other remote areas lack sufficient rail and highway infrastructure, limiting their potential for hydrogen transportation at scale.
• Public acceptance and environmental concerns: New infrastructure projects may face opposition due to environmental risks and local community concerns.
• Lack of skilled workforce in hydrogen technologies: Expanding hydrogen infrastructure demands a workforce with specialized expertise and training, which is currently in short supply.

To address these challenges, the report recommends:

• Pipeline blending as a transitional strategy: Incorporating up to 20 per cent hydrogen into existing natural gas pipelines could serve as a cost-effective short-term solution while new hydrogen-dedicated pipelines are developed.
• Leveraging existing ammonia and methanol networks: Focus on scaling green ammonia and methanol production, supported by investments in renewable energy and carbon capture technologies.
• Establishing regional hydrogen hubs: Co-locate hydrogen production, storage, and end-use facilities in strategically chosen regions to reduce transportation costs and foster local economic development.
• Enhancing partnerships with Indigenous communities: Prioritize collaborating with Indigenous communities to accelerate clean energy projects, while ensuring equitable benefit sharing.
• Boosting R&D for lower-cost hydrogen carriers: Increase funding for hydrogen R&D, focusing on improving carrier technology and reducing energy losses in conversion processes.
• Expanding training programs for a skilled workforce: Partner with industry to create hydrogen-specific technical and safety training programs to address labor shortages.
• Creating a clear, harmonized regulatory framework: Work toward harmonizing provincial and federal regulations for hydrogen production, transportation, and use in order to simplify compliance and improve investor confidence.

In their own words

​​Research has shown that, subject to detailed engineering study of the specific pipeline material and the pipeline’s operational history, 1-20 per cent hydrogen by volume can be injected into natural gas pipelines with no major safety or operational concerns… Further studies have suggested that there may also be a risk of hydrogen embrittlement associated with this process, particularly for old gas pipelines subjected to long-term hydrogen service. 

Hydrogen Transportation and Infrastructure Report, by Aislinn Crawford, Foresight Canada, Dec. 17, 2024. 

Final thoughts

Foresight Canada’s report highlights hydrogen’s crucial role in decarbonizing hard-to-abate sectors and advancing the global transition to net zero emissions. It showcases BC’s potential to become a hydrogen leader by leveraging existing infrastructure and fostering innovation in hydrogen carriers. The report identifies pipeline transportation as the optimal long-term solution for large hydrogen volumes, but acknowledges significant technical, environmental, and social challenges in its implementation.

Beyond transportation logistics, the report could benefit from a deeper analysis of the financial barriers to hydrogen production and infrastructure development, which remain significant challenges. High costs remain a primary obstacle, as highlighted by the International Renewable Energy Agency (IRENA) and the Oxford Institute for Energy Studies. IRENA advocates for clear regulatory frameworks, subsidies, and mandates to drive hydrogen adoption. The Oxford Institute suggests prioritizing projects in regions with abundant renewable resources to produce hydrogen-based materials, such as green iron. Such initiatives could reduce costs and accelerate decarbonization. For example, steelmaking accounts for 7 per cent of global emissions, yet most major producers still rely on fossil fuels for 99 per cent of their energy, citing affordability as the primary barrier to adopting green hydrogen.

Additionally, the report could have delved into the potential of international hydrogen trade. The International Energy Agency estimates that international trade could supply over 20 per cent of global hydrogen demand by 2030. The IEA’s Net Zero Emissions by 2050 Scenario also highlights the role of trade in meeting over 20 per cent of merchant demand for hydrogen and hydrogen-based fuels demand by 2030. But this remains nascent. Ammonia and methanol offer the most promising carriers for meeting this target as they are already traded globally as feedstocks for the fertilizer and chemical industries. International trade met about 10 per cent of global ammonia demand in 2022 (19 MT) and 20 per cent of methanol trade in 2021. Building on existing global trade in ammonia and methanol is key to unlocking hydrogen’s potential in a net zero economy. Including an analysis of shipping hydrogen carriers would strengthen the report’s recommendations and provide a more comprehensive view of BC’s role in the global hydrogen landscape.

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Download the full report originally published by Foresight Canada on Dec. 17, 2024.