(Stephenville) Canada and Germany say a new green energy supply pact will launch a transatlantic hydrogen supply chain, with first deliveries expected in just three years.
Posted at 6:30 p.m.
Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed the agreement in the port city of Stephenville, Newfoundland and Labrador, on Tuesday, where they attended a hydrogen fair.
The five-page agreement is a “statement of intent” to create a hydrogen alliance between the two countries.
Canada will be largely responsible for the increase in hydrogen production and Germany will mainly focus on a maritime corridor to transport it across the Atlantic.
Although Russia is not named in the deal, the pact is as much about energy as it is about sending a message to President Vladimir Putin that his country’s era as the world’s energy superpower is in jeopardy. .
Germany is looking for other forms of long-term energy to replace fossil fuels, both to meet its climate commitments and to enable it to end its energy dependence on Russia.
Natural Resources Minister Jonathan Wilkinson said in an interview Tuesday that there is no doubt that this deal is happening now because of Vladimir Putin and the invasion in Ukraine.
“We were going to have these conversations about hydrogen anyway because of the energy transition, but we weren’t going to have them that quickly,” he said.
“Nearly every project we see in Atlantic Canada really started as a result of the invasion. It’s part of a strategy for the Germans – and eventually all of Europe – to say: ‘We are not going to depend on Russia any longer’. »
Both governments are aware that this agreement will not resolve Germany’s immediate desire to wean itself off Russian oil and gas, a necessity given the threat posed by the war in Ukraine to European energy security.
“Long before 2030”
Although Canada currently produces almost no hydrogen that would meet the objectives of the agreement, the two countries believe that a new hydrogen trade corridor can be operational “well before 2030” and that the first deliveries are possible in 2025.
This requires Canadian projects to be vetted and licensed, built and fueled, and feasible shipping options put in place over the next three years.
The deal does not specify how much hydrogen Canada and Germany expect to be able to ship by then.
“It’s absolutely ambitious, but part of the goals set is that you have to be ambitious to force action,” Wilkinson acknowledged.
The signing of the agreement took place in Stephenville, as a local company plans to build a hydrogen production plant without greenhouse gas emissions, and the municipality is hosting a trade show this week.
The city’s mayor, Tom Rose, said in an interview that in his view, the location and the existing infrastructure make it the perfect location for such a project. He believes the region could well become “the hub of green energy in North America.”
Minister Wilkinson said projects that use onshore wind power have a shorter lead time than offshore wind, but acknowledged that initial production would be quite low.
“I think it’s reasonable to say we can get there within three years, but if we don’t get to 2025 and we’re in 2026, setting 2025, that’s still a pretty lofty goal,” he advanced.
It will also take time for German demand to pick up, Wilkinson said. This will require infrastructure changes, such as pipe upgrades in homes to use hydrogen for heating.
“Blue” versus “Green”
Germany has a strong preference for “green” hydrogen, which is produced by splitting water molecules using electrolysis powered by renewable energy.
But Canada is also looking to produce large amounts of “blue” hydrogen, the kind derived from natural gas, but with carbon dioxide emissions, trapped by CO capture.2 and stored underground.
Currently, almost all of the hydrogen produced in Canada – about three million tonnes in 2020 – is made from natural gas without carbon capture technology. This type of hydrogen is called “grey”.
Germany does not ban blue hydrogen, but will not spend public money on it. That said, most of Canada’s blue hydrogen will come from Western Canada, and shipping it to Europe is no more feasible than shipping natural gas from Alberta and British Columbia to Europe.
Any blue hydrogen exported from Western Canada will seek to reach American or Asian markets.
The agreement includes a requirement for the two countries to develop a mutually agreed method for defining “clean, low-carbon, renewable hydrogen.”
But it is carefully crafted to note Germany’s preference for green hydrogen while acknowledging Canada’s desire for both types to be included.
Canada intends to build on existing funding programs, including the $1.5 billion Clean Fuel Fund, but will put additional funds on the table where needed, the minister said Wilkinson.
Partner of choice
Speaking at a morning Canada-Germany business forum in Toronto, Justin Trudeau said Canada stands with its European allies in increasing global energy supplies as Russia continues to grow. arm its fossil fuel exports.
“It’s never been clearer why we need to accelerate the green transition,” said Mr. Trudeau. And you should have no doubt that Canada has what it takes to be a clean energy provider in a world [zéro émission nette]. »
Mr. Scholz said that Canada is Germany’s partner of choice for the country to stop being dependent on Russia for energy.
“That means increasing our energy imports. We hope that Canadian energy will play a major role in this,” said Mr. Scholz.
“But the task at hand is much bigger than simply diversifying our energy supply. For us, what awaits us is nothing less than the greatest transformation of our economy, our infrastructure and our mobility since the beginning of the industrial revolution. »
Scholz said his country aims to become climate neutral by 2045, while remaining a leading industrialized country in the world.
Chancellor Scholz and Vice-Chancellor Robert Habeck, who is responsible for energy files, are taking part in a three-day tour of Canada this week.