By Nia Williams
CALGARY, Alberta (Reuters) -Canada unveiled a long-discussed hydrogen strategy on Wednesday, calling on investors to spur growth in a clean fuel sector that the government says could be worth C$50 billion ($39.2 billion), create 350,000 jobs and help the country achieve net-zero emissions by 2050.
Natural Resources Minister Seamus O'Regan said Canada will need C$5 billion to C$7 billion in near-term investments to grow its hydrogen industry, but he pledged no new federal money.
However, the government announced a C$1.5 billion investment fund for low-carbon fuels, including hydrogen, last week.
Canada is the world's fourth-largest oil producer and its energy sector has been hammered by plummeting demand as a result of the COVID-19 pandemic.
"Energy is our family business in Canada, and this strategy shows us how to grow that business," O'Regan said at a news conference. "Our first job is to let industry know we are serious."
So-called "blue" hydrogen derived from natural gas, with the resulting carbon emissions captured and stored, is a potentially useful pivot for companies in the struggling oil patch.
The western province of Alberta, home to the bulk of Canada's energy industry, welcomed the national strategy. However, critics say "blue" hydrogen amounts to a fossil-fuel subsidy.
"While hydrogen is being presented as a key climate solution, that will not be the case as long as its production continues to be powered from fossil fuels rather than renewable energy," said Julie Levin at Environmental Defence.
Environmental groups want "green" hydrogen, which uses renewable sources of electricity, to be prioritized.
The province of Quebec, which has abundant hydroelectric resources and potential to become a major "green" hydrogen producer, was not consulted on the federal plan and is working on its own hydrogen strategy, a spokeswoman for the Quebec Minister of Energy and Natural Resources told Reuters.
However, a spokesman for Minister O'Regan said officials from National Resources Canada did engage directly with Quebec officials on the hydrogen strategy.
Federal Environment and Climate Change Minister Jonathan Wilkinson said even "blue" hydrogen would lower emissions and was not a fossil fuel subsidy.
($1 = 1.2752 Canadian dollars)
(Reporting by Nia Williams; editing by Jonathan Oatis and Alistair Bell)