Because of this massive price discrepancy, there is little incentive for industry to churn out green hydrogen

 Citing government data, the commissioner said the actual annual production of hydrogen in Canada is only about 3 megatonnes - almost all of it being "gray" hydrogen, a dirtier form that produces roughly twice the amount of emissions as natural gas.

The commissioner also said there are doubts about whether hydrogen can play any sort of meaningful role in Canada in the short term because very little of the necessary infrastructure - like hydrogen pipelines and liquefaction plants - is in place.

'ASPIRATIONAL NUMBERS'

DeMarco also said there is not enough carbon capture, utilization and storage (CCUS) technology available to produce "blue" hydrogen, a form of fuel that is derived from natural gas through a process of steam methane reforming. CCUS is a process that captures and reuses or stores carbon dioxide emissions.

While Natural Resources Canada has publicly said that hydrogen adoption could account for up to 15 per cent of the emissions reductions needed to meet the 2030 target, the commissioner said the department's own internal numbers, based on "incremental demand reports," suggest hydrogen will contribute. only 0.5 per cent to the 2030 target.

The commissioner said the department did not find those lower emissions reduction targets "compelling" and instead chose to use "more aspirational numbers" when drawing up its emissions modeling plan.