Stephenville, Toronto Germany and Canada are officially hydrogen partners. The governments of the two countries signed a declaration on Tuesday to establish a German-Canadian hydrogen alliance. The first deliveries are therefore planned for 2025. The agreement was signed in Stephenville, Canada, in the presence of Chancellor Olaf Scholz (SPD) and Prime Minister Justin Trudeau. The Newfoundland site is in close proximity to a wind farm project. The energy generated there is to be used to produce hydrogen.
“The participants aim to work closely together on all areas necessary to kick-start the hydrogen economy and create a transatlantic hydrogen supply chain well ahead of 2030, with first deliveries targeted for 2025,” the agreement reads .
According to the Canadian federal government’s 2020 hydrogen strategy, Canada currently produces around three million tons of hydrogen from natural gas, making it one of the ten largest producers of this fuel in the world. However, Germans want hydrogen to be produced from renewable energy, and Canada has a number of projects underway to meet that demand.
With 381 terawatt hours, Canada is the third largest hydroelectric power producer in the world behind China and Brazil. DIHK foreign trade chief Volker Treier said: “In the country there is great potential for the production of green hydrogen, which is generated solely by renewable energies.” For comparison: Germany consumes a total of 2600 terawatt hours of primary energy.
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The German-Canadian agreement does not contain any targets for the amount of hydrogen produced, nor does it promise new funds to start exports to Europe by 2025.
Instead, Canada’s government said existing programs like the $1.5 billion Clean Fuels Fund and the Strategic Innovation Fund’s $8 billion Net-Zero Accelerator initiative will be used to boost hydrogen production.
The German government has not put a figure on the funding of this agreement, but the statement said that Berlin “will support domestic importers and consumers of hydrogen and its derivatives”.
Germany wants to become more independent from Russia
The agreement is part of the German government’s efforts to become less dependent on Russian fuel supplies by deepening energy partnerships with Canada and other countries. In recent months, as tensions mount over Russia’s invasion of Ukraine, Moscow has cut back natural gas supplies to Europe and forced Germany to adjust to gas rationing.
Germany sees hydrogen as an important long-term substitute for Russian natural gas and a way to meet its goal of meeting all electricity needs from renewable sources by 2035.
Environment Secretary Jonathan Wilkinson admitted that the target date for exports to start was optimistic. “It’s very ambitious, but it reflects the fact that Germany sees how this can help them in their current situation. He said he expects export volumes in 2025 “to be likely to be modest.”
Wilkinson said he knows about 15 hydrogen production projects in various stages of development that would be powered by renewable energy such as wind or water. “Our hope is that at least one or two of these will be in production by 2025.
Mark Agnew, senior vice president of policy and government relations at the Canadian Chamber of Commerce, said the hydrogen pact is just the beginning of a rigorous effort needed to start exporting. “There is still a lot of work to be done by 2025, e.g. For example, getting permits and building infrastructure before the first deliveries can go ahead,” he said.
Green hydrogen through wind power
Prior to the signing, Federal Minister Robert Habeck and Federal Chancellor Olaf Scholz, together with Prime Minister Justin Trudeau and Energy Minister Jonathan Wilkinson, visited a green hydrogen trade fair in Stephenville in the province of Newfoundland and Labrador, which was co-organized by the German-Canadian Energy Partnership. Various business consortia presented their planned cooperation projects for the production of green hydrogen using renewable energies.
The green hydrogen is to be produced in the Canadian Atlantic provinces of Newfoundland and Labrador, Nova Scotia and New Brunswick, primarily using wind power, and then shipped across the Atlantic to Germany as ammonia. After crossing, it would be converted back to hydrogen.
For example, the Canadian development company EverWind Fuels is planning a plant in Nova Scotia for the production and export of green hydrogen and ammonia, which could start operations in early 2025. It would be the first ammonia terminal on Canada’s east coast suitable for export to Germany. Uniper and Eon each want to import 500,000 tons of ammonia per year from there to Germany.
Canadian efforts to help Germany move away from Russian energy do not include funding to build infrastructure that could transport liquefied natural gas to Europe — despite Canada being the world’s fifth-largest producer of natural gas.
Trudeau, who wants to reduce the use of fossil fuels, said at the start of Scholz’s trip on Monday that exporting natural gas directly from the East Coast or from Quebec to Europe is not worthwhile. So far there are no LNG terminals on the east coast of Canada.
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