Recovery Through Reform: Advancing a hydrogen economy while minimizing fossil fuel subsidies

The brief warns that funding for blue hydrogen may conflict with Canada's goals to phase out inefficient fossil fuel subsidies by 2025 and reach net-zero by 2050. It recommends that subsidies for hydrogen based on natural gas without significant carbon capture and storage be ineligible for assistance, and that blue hydrogen only receive support if it matches the environmental performance and cost of green hydrogen.

• There is a risk that blue hydrogen projects could face a competitive disadvantage by 2030. Additionally, funding for carbon capture projects is already a major source of fossil fuel subsidies within Canadian jurisdictions.
• To align with the goal of reaching net-zero by 2050 and phasing out inefficient fossil fuel subsidies by 2025, the government should set a very high bar for blue hydrogen subsidies. Specifically, subsidies should be denied for natural gas-based hydrogen lacking significant carbon capture and storage (CCS), and blue hydrogen should only be subsidized if its cost and environmental performance are equal to or better than green hydrogen.
• The brief recommends that Canada improve transparency regarding tax expenditures and direct spending on hydrogen and follow the examples of Germany and Spain, which prioritize green hydrogen in their strategies.

APA

,, E. B. (2021). Recovery Through Reform: Advancing a hydrogen economy while minimizing fossil fuel subsidies. International Institute for Sustainable Development. https://www.iisd.org/publications/hydrogen-economy-fossil-fuel-subsidies

Chicago

,, Estan Beedell. Recovery Through Reform: Advancing a hydrogen economy while minimizing fossil fuel subsidies. International Institute for Sustainable Development, 2021. https://www.iisd.org/publications/hydrogen-economy-fossil-fuel-subsidies.

Wikipedia

{{cite report |last1=, |first1=Estan Beedell |title=Recovery Through Reform: Advancing a hydrogen economy while minimizing fossil fuel subsidies |publisher=International Institute for Sustainable Development |date=25 February 2021 |url=https://www.iisd.org/publications/hydrogen-economy-fossil-fuel-subsidies |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{2021recovery, author = {,, Estan Beedell}, title = {{Recovery Through Reform: Advancing a hydrogen economy while minimizing fossil fuel subsidies}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = feb, url = {https://www.iisd.org/publications/hydrogen-economy-fossil-fuel-subsidies}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }