As we suspected for several days already, Canada and Germany have officially discovered that they have something in common in the clean hydrogen sector. Chancellor Olaf Scholz’s visit to the country made it possible to concretize this good agreement in the form of a strategic alliance according to which Canada will begin to supply Germany with this precious energy vector as early as 2025.
“Hydrogen will play a major role in our energy supply,” Scholz said at a news conference with Justin Trudeau from Stephenville, Newfoundland and Labrador. “We believe that Eastern Canada represents a huge opportunity for us,” he added.
The governments of the two countries therefore announced, late Tuesday afternoon, the creation of the “Hydrogen Alliance between Canada and Germany”, in order to stimulate the emergence “well before 2030” of a bilateral commercial relationship related to hydrogen and related technologies.
“Canada will always support its European allies in the face of Russian aggression,” said Justin Trudeau, referring to Germany’s efforts to try to get rid of its dependence on Russian gas. “We have already accelerated our supply of oil and gas to the world market, but for tomorrow we must turn to resources like hydrogen, which can and will be clean and renewable,” added the Prime Minister.
Provinces to act
Ottawa has been seeking for several months already to develop a national hydrogen sector capable of producing a gas without carbon, or with a very low carbon content, with a view to making it an export product. As part of this agreement, the federal government undertakes “to develop clean hydrogen from all sources and production methods, according to the comparative advantages in terms of resources of each region”, we read in the document confirming the creation of its partnership with Germany.
This formulation is of course not insignificant, as it recognizes the fact that energy issues in Canada are the responsibility of provincial and territorial governments. For example, Quebec adopted its own renewable energy strategy at the start of the summer, which relies on what the industry calls green hydrogen, that is, hydrogen produced from renewables, such as water and hydroelectricity.
“It is an important agreement […]Quebec has a major role to play in this,” rejoiced Gabriel Durany, President and CEO of the Quebec Association for the Production of Renewable Energy.
The latter stresses, however, that Quebec will have to produce more clean energy to compensate for the great electricity needs represented by an increased production of green hydrogen: “Hydrogen is a blind spot in the production of electricity in Quebec, which we estimate 10 to 15 terawatt hours by 2030,” he says. For comparison, the Romaine complex as a whole produces 8 terawatt hours, he said.
Alberta, for its part, relies on a form of hydrogen derived from fossil fuels to ensure the survival of its oil sector. In Western Canada, there are huge expectations for the technology to capture and sequester the carbon generated by this activity to produce what is called “blue hydrogen”, also with very low carbon content.
However, there is a significant downside associated with this project: there is currently no viable application of carbon capture and sequestration that can be used in the industrial production of hydrogen.
Regardless, Ottawa intends to act as a financier and strategic advisor to interested provinces, whether by facilitating access to “existing financial support mechanisms” or “by taking advantage of programs such as the Fund for Clean Fuels, with an investment of $1.5 billion”, or the “Net Zero Accelerator of the Strategic Innovation Fund, with an investment of $8 billion, and the Canada Infrastructure Bank” .
The dream of energy security
Germany, for its part, wants its specialized companies to have easier access to the Canadian energy sector. Already, agreements have been signed in recent days between Canadian producers for the purchase of equipment from German equipment manufacturers.
More than that, Germany has the ambition to contribute with this alliance to strengthen the energy security of Europe, a concept that is threatened these days by the will of the European Union (EU) to free itself of Russian oil due to the invasion of Ukraine. Russia was until now the main foreign energy supplier in the EU.
The Canada-Germany agreement is announced as a first step towards the establishment of an “international trade corridor with Canada and other partner countries as a means of diversifying future hydrogen imports from Germany”.
The United States is probably at the top of the list of these other partner countries. The US energy industry has big ambitions for the production and export of low-carbon hydrogen.