Federal government signs agreement with Germany to sell Canadian hydrogen
Trade deal comes despite lack of approval for World Energy GH2's proposed wind-to-hydrogen project
Canada and Germany have signed a memorandum of understanding to establish a trade program to sell hydrogen produced in Canada, including proposed projects in Newfoundland and Labrador, and Nova Scotia.
Federal Energy and Natural Resources Minister Jonathan Wilkinson said the agreement is "historic."
"It is a huge step forward and it is something that I think people in Newfoundland and Labrador can be enormously optimistic about in terms of the creation of jobs and prosperity," Wilkinson told CBC News on Sunday.
According to a press release from Natural Resources Canada, the memorandum, signed Monday, accelerates the hydrogen trade between Germany and Canada, with exports beginning as early as next year.
Canada has seen only two projects — Everwind and Bear Head Energy's respective Point Tupper plants in Nova Scotia — pass environmental assessment so far, although those projects still have to clear assessments for the wind farms that will power it.
The next closest is the World Energy GH2's proposed wind-to-hydrogen project on the Port au Port Peninsula in Newfoundland, which is still awaiting approval under the province's environmental assessment process.
That process will be respected, said Wilkinson, despite the memorandum. He said these types of deals need to be struck ahead of time so companies can safely invest in new industries, such as the hydrogen trade.
"Of course, World Energy and other proponents in Newfoundland and Labrador will have to go through the environmental assessment process," Wilkinson said. "They will have to ensure that they address concerns around impacts on the environment and on community concerns. But certainly we are creating a frame where we believe that projects once they proceed through that, assuming they do, can actually be commercially viable."
Energy
and Natural Resources Minister Jonathan Wilkinson says the memorandum
will lead to prosperity in Newfoundland and Labrador. (Sean Kilpatrick/The Canadian Press)
Under the memorandum, Germany's H2Global Foundation will support commercial transactions between Canada's hydrogen producers and Germany's industrial manufacturing and energy distribution sectors. It is being signed by both Wilkinson and the German Vice-Chancellor Robert Habeck in Hamburg at the Canada-Germany Hydrogen and Ammonia Producer-Offtaker Conference.
Indigenous representatives are also said to be present for the signing, including former Miawpukek First Nation chief Mi'sel Joe and Qalipu First Nation Chief Jenny Brake. Joe, who recently retired as administrative chief in his community, is a strategic adviser for World Energy GH2.
Feds tout potential economic impact
The statement, from Energy and Natural Resources spokesperson Carolyn Svonkin, says Atlantic Canada's hydrogen proponents are internationally competitive and "well positioned to move forward on export opportunities."
"They will use Atlantic Canada's abundant and untapped wind resources and immediate proximity to Atlantic shipping routes to become reliable suppliers of new clean energy exports globally."
According to the statement the government of Newfoundland and Labrador estimates that the four projects selected to move forward in the Crown land bidding process will have an overall economic impact on gross domestic product of $206 billion, create $11.7 billion in provincial revenue to the province of $11.7 billion, and employ 11,694 full-time equivalents at peak construction.
Wilkinson said the work on the memorandum began in 2022, when German Chancellor Olaf Scholz and Prime Minister Justin Trudeau signed a hydrogen agreement in Stephenville.
"We have been working very actively over the course of the past year and a half," Wilkinson said. "We have come to an understanding as to how we're going to structure a window that will match companies that actually want to purchase green hydrogen in Germany with people who are going to produce the hydrogen in Nova Scotia and Newfoundland and Labrador."
Prime
Minister Justin Trudeau, left, signed a hydrogen agreement with German
Chancellor Olaf Scholz in Stephenville during August 2022. (Adrian Wyld/The Canadian Press)
Wilkinson said the deal also holds important global implications beyond just trade, including fighting climate change and curbing Russia's economic advantages over European countries.
"They can actually rely either on themselves or on their friends and allies to supply the kinds of fuels that they are going to need going forward, so they're not dependent on dictators like Vladimir Putin," Wilkinson said.
"This kind of approach is something that addresses climate.… It addresses energy security. It addresses economic prosperity for Newfoundland and Labrador. And yes, we are making sure that we are doing this in a thoughtful way that addresses transportation, not just production."
Wilkinson said work is underway to ensure there are ports and infrastructure in Canada and Germany to facilitate the transport of hydrogen products.
World
Energy GH2's environmental assessment is 4,000 pages long. The
provincial government's verdict on it is expected to be released in
April. (Colleen Connors/CBC)
Wilkinson reiterated that Monday's announcement does not guarantee that the World Energy project will move forward.
"We're not quite there yet," he said. "There's still some work to do."
However, he is optimistic that the project will move forward.
"I look forward to pushing this over the line and to being there when the ribbons are being cut."
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