German-Canadian Alliance: “Transatlantic supply chain for hydrogen well before 2030”

(Berlin / Stephenville, Canada) – As expected, Federal Minister of Economics Robert Habeck and Canadian Energy Minister Jonathan Wilkinson concluded a hydrogen agreement (“Canada-Germany Hydrogen Alliance”) in the presence of Chancellor Olaf Scholz and Prime Minister Justin Trudeau.

The ceremony took place in the small port town of Stephenville on the west coast of the island of Newfoundland, which has a population of around 6.000. This is a “non-binding” declaration of intent, meaning: it is not a contract, but simply an expression of intent. Both sides could therefore change their wishes without giving reasons, which would make the agreements made obsolete. However, it is unlikely that this will happen; after all, states are hoping for technological progress and economic prosperity - i.e. sales.

The green hydrogen is to be produced in the Canadian Atlantic provinces of Newfoundland and Labrador, Nova Scotia and New Brunswick primarily using wind power and then shipped across the Atlantic to Germany as ammonia. The aim is to accelerate the international market ramp-up and clear the way for new transatlantic projects, according to the Federal Ministry of Economics (BMWK). The agreement initially runs for five years.

Not an exclusive program for Germany

Canada and Germany have been working intensively on hydrogen for more than a year as part of a “German-Canadian energy partnership,” according to the BMWK. With the new agreement, this cooperation will be further expanded.

According to the text of the document obtained by our editorial team, the alliance aims to facilitate trade in hydrogen and its derivatives between Germany and Canada, boost the hydrogen economy, and “create a transatlantic hydrogen supply chain well before 2030.” The first transports are planned for 2025.

The Government of Canada will strengthen collaboration with provinces and territories through Regional Energy and Resource Round Tables and with the private sector, the paper says.

Financing programs such as the C$1,5 billion (€1,15 billion) Clean Fuels Fund, the $6,16 billion (€XNUMX billion) Net-zero Accelerator Strategic Innovation Fund and The Canadian Infrastructure Bank supports “the development of Canadian resources for the production of hydrogen and its derivatives for domestic use and export to Germany, the wider European market and Asia” – so it is by no means a program that exclusively serves Germany.

Trade corridor to Canada

On the other side of the Atlantic, the federal government will support importers and users to build an international corridor with Canada and other partner countries.

To enable trade, participants will “strengthen and accelerate, to the extent possible, existing bilateral and multilateral cooperation in the development and coordination of codes, standards and regulations related to the production, distribution, trading and use of hydrogen.”

In addition, efforts in the areas of research, development and demonstration projects are to be promoted and hydrogen production, along with infrastructure and supply chains, are to be supported on the basis of the cooperation networks. This includes, among other things, agreements between German and Canadian ports to promote access to trade and decarbonize operations.

Agreements between shipping companies and ports in both markets are also planned. A working group within the German-Canadian energy partnership and special workshops are intended to advance cooperation between the hydrogen industry in both countries.

Define green hydrogen

Furthermore, a common method is being developed to determine the CO2 intensity of hydrogen. This is intended to define what is cleaner, what is low-CO2 and what is renewable hydrogen - a not unimportant definition, because Canadians do not strictly differentiate between "green" and blue "low-CO2" hydrogen, which is produced from natural gas.

“The focus on green hydrogen, produced from renewable energies, is crucial” and Germany must not give in here, says Sascha Müller-Kraenner, Federal Executive Director of German Environmental Aid (DUH), commenting on the agreement: Despite all the progress, Canada is keeping the door open the production of fossil hydrogen is open. Whether it is called “zero” or “ultra-low” “does not change the very high emissions associated with its production,” according to the DUH.

Other energy experts have already complained that the sale of Canadian hydrogen could only be a small part of the solution to the European energy crisis. Canada “does not yet have the infrastructure to produce large quantities of green hydrogen or export it over long distances.”

The technology requires further investment before the costs are even remotely comparable to those of the energy source obtained from natural gas. This is one of the reasons why the Canadian hydrogen strategy initially envisages the development of blue hydrogen before finally switching to green hydrogen Amit Kumar, professor of engineering at the University of Alberta, according to a media report, the agreement in advance.

Canada can learn from Germany

A point also echoed by the Climate Action Network Canada (CAN-Rac): “After months of discussions about liquefied natural gas (LNG), the visit brings a welcome shift in focus to green hydrogen.” At a time when the Canadian industry is for fossil fuels intensified their lobbying and used the invasion of Ukraine to promote the expansion of fossil fuels, “the German-Canadian Hydrogen Alliance offers a perspective on economic opportunities and job creation beyond oil and gas,” according to the alliance, its umbrella organization is supported worldwide by NGOs in the areas of environment, social affairs and indigenous peoples, among others.

As Canada's domestic "clean hydrogen" strategy continues to blur the lines between renewable and fossil hydrogen, the government now has the chance to "learn from Germany's clear categorization and focus on green hydrogen," emphasizes CAN-Rac. Canada must ensure that the funds committed under this agreement do not extend fossil fuel subsidies, but instead use public funds to support the expansion of renewable energy.

Who's Who of the German economy

Ahead of the signing, Federal Minister Robert Habeck and Chancellor Olaf Scholz, together with Prime Minister Justin Trudeau and Energy Minister Jonathan Wilkinson, visited a hydrogen trade fair in Stephenville co-organized by the German-Canadian Energy Partnership. The German politicians were – as usual on such trips – accompanied by representatives of German business, in this case the “who’s who” of the industry. A list contains the names of managing directors and board members of global corporations such as Bayer, Siemens Energy, Volkswagen, Mercedes-Benz, K&S, Uniper, Hamburg Port Authority, Binz Automotive, Arcelor Mittal, RWE and Thyssenkrupp, to name just a few.

While politicians were informed about the state of the art and projects, a number of companies concluded contracts prepared for the occasion.

Eon and Uniper order one million tons of ammonia per year from Everwind

The Canadian project developer Everwind Fuels LLC signed letters of intent with the two German energy companies Uniper SE and Eon SE to purchase green ammonia from the Point Tupper production plant in the province of Nova Scotia. According to the information, the order volume is around 500.000 tons annually from 2025.

Point Tupper is a multi-stage green hydrogen and ammonia production and export facility expected to begin commercial operations in early 2025. The location is Port Hawkesbury with its ice-free deep-water harbor and two jetties. The plant uses “a mix of certified green electricity from Nova Scotia’s grid and onshore wind energy.” Additional sections would be powered by offshore wind power, enabling the production of more than ten million tons of green ammonia per year.

Abo Wind recognizes “pleasant dynamics”

At the stand of Wiesbaden-based Abo Wind AG in Stephenville, Robert Habeck and Jonathan Wilkinson found out about their Canadian projects. According to its own information, ABO Wind is working on the development of several large wind farms in three Canadian provinces with a planned cumulative output of eleven gigawatts. “With the green electricity, up to 900.000 tons of hydrogen could be produced, converted into ammonia and transported by ship to Germany, for example,” says the company.

“We are currently working on renewable energy projects with a total of 15 gigawatts of power worldwide in connection with planned hydrogen production,” said Abo Wind board member Karsten Schlageter. These projects ran parallel to other grid-connected wind and solar parks with an output of 20 gigawatts that are under development. “We are treating these two pipelines separately because building a hydrogen economy is complex.” The German-Canadian agreement brings “a welcome dynamic to the topic.”

Immediately before its signing, Chief Richardson of Pabineau First Nation and Karsten Schlageter entered into a cooperation agreement for a hydrogen project in the province of New Brunswick. There they want to work together to advance a wind power project with four gigawatts of output, which will provide electricity for the production of up to 300.000 tons of hydrogen annually.

First Hydrogen is happy about “transatlantic supply corridor”

The First Hydrogen Corp. welcomes the agreement as “the beginning of establishing Canada as a major hydrogen producer.” The Vancouver and London-based company has expanded its green hydrogen plans to North America, with a continued focus on Canada and its renewable energy resources.

At the beginning of July, the Canadian government announced a funding program for zero-emission medium-duty and heavy-duty vehicles, providing 547,5 million Canadian dollars (421,4 million euros) over a period of four years. First Hydrogen also benefits from this, as the company specializes in zero-emission vehicles as well as the production and distribution of green hydrogen. “This political commitment will help create new demand for commercial vehicles powered by green hydrogen,” the company is certain.

First Hydrogen plans to produce and supply green hydrogen for commercial vehicles in North America, Great Britain and Europe. “The latest announcement calls for production in Newfoundland and Labrador using wind energy. The company plans to build fuel cell-powered light commercial vehicles with a range of over 500 kilometers under agreements with AVL Powertrain and Ballard Power Systems Inc. First Hydrogen is also developing a refueling system in collaboration with FEV Consulting GmbH in Aachen.

ABB continues to invest in Hydrogen Optimized's Rugged Cell technology

The Swiss technology group ABB AG and the Canadian manufacturer of hydrogen production systems Hydrogen Optimized Inc. (HOI) have agreed to expand their strategic partnership, which has existed since 2020, as part of the “German-Canadian Atlantic Renewable Hydrogen Expo”. ABB will therefore invest in the HOI parent company Key DH Technologies Inc. (KEY). No details were given.

According to the information, the focus is on the “rapid marketing” of the electrolysis technology called “Rugged Cell”, which has been developed by HOI since 2017, with which green hydrogen can be produced on an industrial scale. A demonstration system presented in October last year promised modules with an individual output of up to 100 megawatts. “We will now focus on optimizing the rugged cell design to advance the development of a market-ready product,” said Andrew TB Stuart, President and CEO of KEY and HOI.

The next goal is to scale individual electrolyzer modules to 200 megawatts. With this agreement, Stuart sees his company “excellently positioned in the segment of large-scale systems with outputs ranging from several hundred megawatts to several gigawatts.”

Alliance schedule not certain

However, as reported, it is not yet certain whether the schedule for the delivery of hydrogen to Germany in 2025 will be adhered to. The starting point is the hydrogen production facility planned in Stephenville World Energy GH2 Inc. The initial output of the system will be 0,5 gigawatts. The electricity for this is generated in an onshore wind farm.

In the first phase, 164 turbines with a cumulative output of one gigawatt will be built, along with the necessary infrastructure. The planned location for the wind turbines is the Port au Port peninsula, barely 15 minutes by car from Stephenville.

World Energy, co-organizer in Stephenville, wants to invest twelve billion dollars in the project, which will go into operation in 2024 and, when completed, will serve the global market with an electrolysis output of 1,5 gigawatts with 250.000 tons of green hydrogen annually. The project will create 1.800 direct jobs in construction, 300 direct jobs in operations and 3.500 indirect jobs, the company said in a statement.

However, the implementation of the plans could be delayed even after a building permit has been obtained. Residents of Cape St. George, on the southern tip of the peninsula, are reportedly concerned about the project's potential impact on the area's ecosystem, which is home to rare and endangered plants.

Protests against the hydrogen alliance

There were also protests on the day the German-Canadian hydrogen alliance was signed. According to CBC News, opponents of the proposal lined the street near Stephenville Airport to protest the deal. “Newfoundland is not for sale,” read posters.

Marilyn Rowe of the Environmental Transparency Committee, which was set up in response to the Port au Port wind farm and hydrogen project, said the peninsula's residents would become "guinea pigs" for the industry, according to the broadcaster. Until the first hydrogen transport finds its way from Canada to Germany, things could get really stormy again.

 

Photo above
Chancellor Olaf Scholz and Prime Minister Justin Trudeau on the eve of the official program of the visit to Canada. © Federal Government/Denzel