Germany and Canada sign hydrogen deal to reduce fossil fuel reliance

Canada 'has almost boundless potential to become a superpower in sustainable energy', says German Chancellor Olaf Scholz

Canada's Prime Minister Justin Trudeau (L) shakes hands with German Chancellor Olaf Scholz during the Canadian-German Business Forum in Toronto. Getty Images
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Canada is set to begin shipping green hydrogen from its wind farms to Germany by 2025, marking the first step in a partnership to help Europe’s biggest economy reduce its reliance on fossil fuels.

German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau signed a five-year hydrogen agreement on Tuesday in Newfoundland and Labrador, a remote province on Canada’s east coast with abundant wind power potential.

The fuel burns hot enough to be used for making steel and will play a key role in curbing industrial emissions, as well as eventually powering cars, lorries and ships.

The two countries committed to creating “a transatlantic supply chain for hydrogen well before 2030, with first deliveries aiming for 2025".

Canada is “aiming to become a major producer and exporter of hydrogen as well as related clean technologies”, said the accord, and it wants to attract foreign direct investment to build the infrastructure.

Germany, meanwhile, is “aiming to import significant amounts of renewable hydrogen to decarbonise its hard-to-abate sectors in line with its 2045 climate neutrality target”.

Mr Trudeau and Mr Scholz signed the agreement in Stephenville, a small town with a deep seaport on the Gulf of St Lawrence, more than 1,600 kilometres north-east of New York.

There are at least two large-scale wind farm projects proposed for the area that would use water electrolysis to produce hydrogen.

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Speaking earlier in the day at a business conference in Toronto, Mr Scholz said Canada had "almost boundless potential to become a superpower in sustainable energy and sustainable resource production”.

The chancellor said “Germany, for its part, stands ready to become one of your closest partners”.

Mr Scholz was on the final day of a three-day visit to Canada, with a delegation that included Economy Minister Robert Habeck and major German business leaders.

The trip has included Volkswagen AG and Mercedes-Benz Group AG sealing agreements with Canada to secure access to raw materials such as nickel, cobalt and lithium for battery production.

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Mr Scholz also met representatives of Canadian pension funds in Toronto to lobby for more green investment to support Germany’s shift towards a carbon neutral economy.

Canadian and German officials are still examining options for shipping liquefied natural gas to Germany but Mr Trudeau said on Monday there had to be a strong business case to justify building export infrastructure on Canada’s east coast.

Voicing support for Mr Scholz’s efforts to wean his country off Russian gas, the prime minister said he would be willing to ease the regulatory burden if the private sector decided liquefied natural gas export projects made economic sense.

Updated: August 24, 2022, 7:12 AM