Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday August 25, 2022
Canada signs non-binding agreement with Germany to export hydrogen to Europe by 2025
The Canadian and German governments have signed a deal to co-operate on exporting hydrogen fuel to Europe, setting an ambitious target of 2025 to begin shipments from Eastern Canada – where a single hydrogen production plant has yet to be built.
April 13, 2022
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 the production of hydrogen from electrolysis.
The joint declaration of intent makes clear the agreement is not legally binding and stipulates it will be up to Canada’s Minister of Natural Resources and Germany’s Ministry of Economic Affairs and Climate Action to keep track of whether it’s making progress on its goals.
Canada currently produces about three million tonnes of hydrogen from natural gas a year, according to the federal government’s 2020 Hydrogen Strategy, which puts this country among the top 10 producers of the fuel in the world today. The Germans, however, want hydrogen made from renewable power and a raft of projects are under way in Canada to meet this demand.
The Canadian-German agreement sets no targets for volumes of hydrogen produced and contains no commitments of new money to help commence 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 spur hydrogen production.
The German government did not put a figure on funding for this agreement, but said in the declaration Berlin “will support domestic importers and consumers of hydrogen and its derivatives.”
July 14, 2022
Asked how Ottawa and Berlin would keep this agreement on track and progressing, Mr. Wilkinson said a primary driver of this effort is Germany’s desire to end its reliance on Russian energy. “Part of this is being driven by 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 merely the beginning of a rigorous effort needed to begin exports. “There is still a lot of work to undertake between now and 2025, such as permitting approvals and building infrastructure before first shipments can occur,” Mr. Agnew said.
The challenge with joint declarations, such as the one Canada and Germany have made, is “they risk being filed away and ultimately forgotten after a few follow-up meetings,” Mr. Agnew said. He said it will be vital for regular and transparent reporting on progress.
Canadian efforts to help Germany wean itself off Russian energy do not include any funding to construct infrastructure that might ship liquefied natural gas to Europe – even though Canada is the fifth-largest natural gas producer in the world.
Mr. Trudeau, who wants to reduce use of fossil fuels, on Monday cast doubt on the business case for exporting natural gas directly from the East Coast or Quebec to Europe, saying locations for plants to convert the fuel to liquefied natural gas are too far from Western Canadian sources to be economical.
But the Canadian Gas Association, which represents the natural gas delivery industry, said this week that the biggest obstacle to building LNG facilities on the East Coast is regulatory uncertainty. The association said investors can’t be sure when or if the federal government will approve the necessary pipeline infrastructure. (The Globe & Mail)