Scholz heads to Canada in Germany's latest search for energy

Three-day trip expected to yield accord on green hydrogen production

German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau last met at June's G7 summit in Germany's Bavarian Alps. Reuters

With Russia on Friday announcing it will halt gas supplies to Europe for three days at the end of the month, the quest for alternatives to Russian fossil fuels has added even greater significance to German Chancellor Olaf Scholz's three-day trip to Canada next week.

The visit is aimed at deepening energy ties between the two G7 countries and is being given top priority in Berlin, with Mr Scholz being joined by Vice Chancellor Robert Habeck on what is believed to be the first Canada-only trip by a German chancellor.

During the trip, Mr Scholz and Canadian Prime Minister Justin Trudeau are expected to sign a “hydrogen accord”, paving the way for a clean fuel supply chain between Germany and Canada.

The idea is for wind energy produced on Canada's Atlantic seaboard to be turned into green hydrogen, cooled to very low temperatures and shipped to Germany's northern coast.

“Canada's Atlantic provinces have enormous wind energy potential and are relatively close to Europe by sea; for example, closer than the Suez Canal,” said a German government source.

Although the necessary infrastructure is some years away, Germany's aim is to have a “reliable, trustworthy partner that can deliver green hydrogen in large quantities”, they said.

Another area of interest is liquefied natural gas, for which Germany is hurriedly building new terminals so that the fuel can be imported by sea instead of by Russian pipeline.

However, Canada's LNG export industry is in its infancy and there is no expectation in Berlin that supplies will start to arrive in Germany in the next year or two.

That means Mr Scholz is unlikely to come back with short-term energy supplies to help tie Germany over for what is set to be a difficult winter.

Difficult winter

Years of reliance on Russian oil and gas left Germany caught cold when the invasion of Ukraine brought some of Europe's key energy pipelines to a standstill.

Ministers in Berlin are banking on energy savings — with all 27 EU countries expected to pitch in by cutting gas consumption by 15 per cent — to get the German economy through winter, along with existing energy reserves and coal plants called out of retirement to produce electricity.

But the longer-term aim is to find alternative suppliers, with Mr Habeck making stops in the Gulf in March and the EU signing deals with other gas-rich countries, such as the US and Azerbaijan.

Hydrogen is seen as an opportunity because it is carbon-free and could one day be shipped to the same LNG terminals currently being assembled in Germany.

The accord is expected to focus on green hydrogen, as it is known when produced from renewable sources such as wind, rather than so-called blue hydrogen derived from natural gas.

“Canada is a key country for the energy transition and the transformation of our economy and that of the whole world,” Mr Habeck said.

“We already work closely together in many fields but want to deepen our co-operation, economically as well as technologically.”

For Canada's part, Mr Trudeau hopes to encourage German investment in energy and other sectors, such as artificial intelligence.

Canada has its own reasons to generate more wind power as it aims to slash cut oil and gas emissions by more than 40 per cent this decade.

“I look forward to showing Chancellor Scholz what Canada has to offer, while we further strengthen our relationship, create jobs, and help grow the middle class in both countries,” Mr Trudeau said.

Mr Trudeau will accompany Mr Scholz on all three days of his trip, which will begin in Montreal on Monday with visits to an AI institute and talks between departmental ministers.

Mr Scholz will address a German-Canadian chamber of commerce in Toronto and discuss topics including energy security, raw materials and automation, an official said.

The hydrogen pact is set to be signed in Stephenville, a small town in Newfoundland where they will see some of the projects under way on the Atlantic coasts.

Another topic on the agenda is an EU-Canada trade deal known as the Comprehensive Economic and Trade Agreement, which has been partly in force since 2017 but is still awaiting full ratification.

Germany plans to put the agreement before MPs for approval in the autumn.