On Tuesday, Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed a “joint declaration of intent” that enjoins both parties to invest in hydrogen. With their establishment of a “transatlantic Canada-Germany supply corridor,” Canada also agreed to export hydrogen to Germany by 2025.
While Germany, through conscious policy, was already weaning itself off of fossil fuels, the Russo-Ukrainian war’s escalation in February prompted a speeding up of that process; since the loss of Russia as a primary and reliable partner in the supply of fossil fuels, Germany has been frantically looking for alternatives, even going as far as to (unsuccessfully) court Qatar. It hopes that hydrogen, a gaseous fuel useful for making steel, could eventually power cars, trucks, and ships.
According to the prime minister’s statement on the government’s website, the deal “marks an important step toward Canada’s objective of becoming a top global supplier of clean hydrogen.” The deal would also advance the two countries’ “common climate change objectives” and “mutual interests in accelerating the global energy transition and safeguarding international energy security to meet net-zero emissions by 2050,” the statement projected.
Europe’s largest economy has high expectations of Canada’s hydrogen, which the country derives from wind farms. During a press conference, Trudeau called the so-called ‘hydrogen pact’ a “historic step forward.”
The prime minister added that “we must look to resources like hydrogen which can and will be clean and renewable. We can be the reliable supplier of clean energy a net-zero world needs,” and that the need for this energy “is almost limitless, and that’s where Canada, and Atlantic Canada specifically, gets to step up. With our renewable resources, we have a huge advantage.”
Grateful for Canada’s commitment, Scholz said that while Germany’s coast cannot possibly match the same output Canada can furnish, hydrogen will play a major role in Germany’s future energy supply, especially in industries that are hard to decarbonize, such as shipping and aviation.
The five-year deal was signed during Scholz’s 3-day visit to Canada in the port city of Stephenville; a symbolic place, as it lies on Canada’s windy east coast. At least one large-scale wind farm project is proposed for the area, which would use water electrolysis to produce the hydrogen Germany craves.
Quite unusually, according to Politico, Scholz was not only accompanied by Vice Chancellor Robert Habeck but by a contingent of CEO’s from Germany’s largest companies, including Bayer, Mercedes-Benz, and Volkswagen. While there, the two car companies secured deals of their own, ensuring access to lithium, nickel, and cobalt—elements used in batteries. In addition, energy firms Uniper and E.ON announced plans to work with Canada’s EverWind to buy a total of 1 million tonnes of green ammonia a year, starting from 2025.
On the same day of the pact’s signing, as he was talking in Toronto, Scholz expressed his hope that Canada might soon be a major player in the export of liquefied natural gas (LNG); only the day before, Canada curbed such enthusiasm, as it would need time to set up export terminals specifically fitted for that purpose. Currently, Canada has no such terminals, though two are being built on its West Coast. According to Trudeau, these are still years away from completion.
Clearly, Chancellor Scholz realizes that currently, energy scarcity and its associated high cost is Germany’s greatest concern—as well as the main reason for his dwindling popularity among voters. According to a recent poll, commissioned by Bild am Sonntag, 62% of those polled expressed dissatisfaction with Scholz’s leadership.
It is imperative then that on this issue, the Chancellor delivers—both for his and his coalition’s sake, as well as for that of the people.