The governments of Canada and Germany have signed a cooperation agreement to export hydrogen fuel to Europe, setting an ambitious 2025 goal of starting shipments from Eastern Canada – where a hydrogen production plant has yet to be built. Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed the agreement in the western Newfoundland town of Stephenville, near the site of a proposed wind farm project that would power hydrogen production from electrolysis. The joint statement of intent makes clear that the agreement is not legally binding and states that it will be up to Canada’s Minister of Natural Resources and Germany’s Ministry of Economic Affairs and Climate Action to monitor whether it is making progress on its goals. Because New Earth is betting big on wind and hydrogen This Australian billionaire wants to become the world’s green hydrogen baron. He pushes Canada to follow suit View: Canada’s moment with Germany won’t last long if it doesn’t move fast “Participants aim to work closely together on all aspects necessary to launch the hydrogen economy and establish a transatlantic hydrogen supply chain well before 2030, with the first deliveries targeted for 2025,” the agreement states. The deal is part of the German government’s drive to become less dependent on Russian fuel supplies by deepening energy partnerships with Canada and other countries. In recent months, as tensions over Russia’s invasion of Ukraine have risen, Moscow has cut gas flows to Europe, forcing Germany to prepare for gas rationing. Canada currently produces about three million tonnes of hydrogen from natural gas annually, according to the federal government’s 2020 Hydrogen Strategy, which places the country among the top 10 producers of the fuel in the world today. The Germans, however, want hydrogen from renewable energy sources, and a number of projects are underway in Canada to meet that demand. The Canadian-German agreement does not set targets for volumes of hydrogen produced and contains no commitments for new money to help start exports to Europe by 2025. Instead, the Canadian government said existing programs, such as the $1.5 billion Clean Fuels Fund and the $8 billion Strategic Innovation Fund’s Net Zero Accelerator Initiative, are being used to help boost hydrogen production. The German government did not provide figures for the financing of this deal, but said in the statement that Berlin “will support domestic importers and consumers of hydrogen and its derivatives.” Natural Resources Minister Jonathan Wilkinson acknowledged that the target date for the start of exports is too aggressive. “It is very ambitious, but it reflects the fact that Germany sees how this can help them in their current context,” the minister said. He said he expects export volumes in 2025 “to be rather modest.” Mr Wilkinson said he knew of about 15 hydrogen projects in various stages of development that would be powered by renewable energy sources such as wind or water. “Our hope is that at least one or two of them will be producing by 2025,” he said. Dozens of protesters demonstrated outside Tuesday’s announcement, many with signs opposing the spread of wind turbines that would accompany a green hydrogen industry in the region. Most hydrogen export proponents are looking at transporting it to Europe by converting it to liquid ammonia before shipping, Mr. Wilkinson said. The liquid will turn back into hydrogen after crossing the Atlantic. Asked how Ottawa and Berlin will keep this deal on track and moving forward, Mr. Wilkinson said a primary driver of this effort is Germany’s desire to end its dependence on Russian energy. “Part of this is due to the desire to displace Russian gas,” he said. 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 exports. “There is still a lot of work to be done between now and 2025, such as getting approvals and building infrastructure before the first missions take place,” Mr Agnew said. The challenge with joint statements like the one Canada and Germany have made is that “they risk drifting apart and eventually being forgotten after a few follow-up meetings,” Mr. Agnew said. He said regular and transparent reporting on progress would be vital. Canada’s efforts to help Germany wean itself off Russian energy do not include funding to build infrastructure that could transport liquefied natural gas to Europe — even though Canada is the world’s fifth-largest natural gas producer. Mr. Trudeau, who wants to reduce his use of fossil fuels, on Monday questioned the business case for exporting natural gas directly from the East Coast or Quebec to Europe, saying the sites for facilities to convert the fuel into liquefied natural gas is far away. from western Canadian sources to be economical. But the Canadian Gas Association, which represents the natural gas industry, said this week that the biggest obstacle to building LNG facilities on the East Coast is regulatory uncertainty. The association said investors cannot be sure when or if the federal government will approve the necessary pipeline infrastructure. The agreement also states that Ottawa and Berlin will set rules defining the carbon intensity of hydrogen so producers can determine what can be called clean, low-carbon or renewable hydrogen. “The transformation is moving forward. Our industry is investing to produce in a climate-neutral way in the future,” said Mr. Scholz. Klaus-Dieter Maubach, chief executive of German utility Uniper SE, who accompanied Mr. Scholz on the German leader’s visit to Canada, said a cooperation agreement signed with a green hydrogen and ammonia producer in Nova Scotia is “ excellent starting point to develop hydrogen businesses in Canada.” Uniper has signed a memorandum of understanding with Nova Scotia-based EverWind Fuels LLC to purchase green ammonia from the company’s planned production facility in Point Tupper, NS. The German company would buy 500,000 tonnes of green ammonia per year, which can be converted into hydrogen. “It has to start somewhere,” he said. He said 70 to 80 percent of the hydrogen Germany will need as it transitions to a greener economy will have to be imported. Flensburg shipbuilder FSG-Nobiskrug and Canadian shipping company Oceanex were also expected to sign a deal on Tuesday to build a carrier to supply Newfoundland and Labrador. Oceanex currently uses three transport ships to deliver goods to the island daily, from food to raw materials and cars. One of them already comes from the FSG-Nobiskrug plant.
Mineral transactions with Volkswagen, Mercedes
Due to impending shortages of important raw materials for battery production, Volkswagen wants to rely more on Canada. The automaker and the Canadian government signed a memorandum of understanding Tuesday to secure access to Canadian raw materials for electric vehicle batteries. The letter of intent was signed on Tuesday by outgoing VW CEO Herbert Diess and Canadian Industry Minister François-Philippe Champagne. “We are not opening our own mines, but we want to acquire stakes in Canadian mines and mine operators,” VW chief technology officer Thomas Schmall told The Globe and Mail. The aim, he says, is to secure volumes and prices through long-term supply agreements. Canada has almost all the raw materials we need to make batteries,” says Mr. Schmall. VW is investing €20 billion globally in the battery value chain. The company will invest a single-digit billion in Canada, Mr. Schmall said. The company is currently planning six battery plants in Europe and another in North America. Mr. Schmall is not yet revealing whether this will be in Canada or the United States. It’s not the only company with big plans in Canada. Stuttgart-based carmaker Mercedes-Benz AG also signed a letter of intent on Tuesday to buy raw materials. Chief Technology Officer Markus Schaefer, responsible for development and purchases, was part of the delegation led by Mr Scholz and Finance Minister Robert Habeck. Mr. Schaefer explained that Mercedes is in the process of drastically increasing the production of electric vehicles. “That’s why we’re also exploring new ways to responsibly source the raw materials needed for this.” Canada, he said, is “a strong partner for this.” Mercedes wants to tap into “mining and refinery opportunities in Canada, as well as active cathode precursors.” To that end, Mercedes wants to build relationships with the Canadian mining sector – and work closely with German-Canadian company Rock Tech Lithium Inc. Rock Tech says it plans to supply Mercedes with 10,000 metric tons of lithium hydroxide annually starting in 2026. The two companies have signed an agreement to that effect. However, Rock Tech’s lithium mine in Canada is still in the approval process, according to CEO Markus Brügmann. The raw material from which the battery-grade lithium hydroxide will be extracted will initially come from Australia, among other countries, until the Canadian mine is operational and refined in Germany.
