Hydrogen is an important commodity in the processing of intermediate bitumen products into a finished petroleum product and for upgrading bitumen into synthetic crude. With the continued extraction of bitumen-rich material from Alberta's oil sands project, there is an opportunity to reduce the greenhouse gas emissions of upgrading and refining operations by using electrolytically produced hydrogen in place of hydrogen produced by steam methane reformation. Recently, a bitumen upgrading facility had been proposed for the city of Sarnia, Ontario because of its pre-existing petroleum processing infrastructure. Using the Ontario electrical system, which has a lower emissions factor than Alberta, the use of electrolytic hydrogen could result in a significant reduction of greenhouse gasses. In this paper, the objective is to determine an optimal system configuration for reducing greenhouse gas emissions while maintaining a low system cost. The analysis is performed with General Algebraic Modelling System tool, a mixed-integer linear optimization in addition to a simple model in Visual Basic. For each case, an economic and environmental analysis is performed including the use of cap-and-trade values for the price of carbon emissions, which are applied to determine the overall economic impact of the emissions reductions. Copyright (C) 2016 John Wiley & Sons, Ltd.