Germany-Canada deal shape of things to come for hydrogen trade
If necessity is the mother of invention, expect a lot more hydrogen to start flowing towards Europe over the coming decade.
Germany, in particular, is desperate to wean itself off fossil fuels after Russia’s invasion of Ukraine sent the cost of natural gas into the stratosphere and made continued purchases from its biggest supplier (also Russia) untenable.
Germany, in particular, is desperate to wean itself off fossil fuels after Russia’s invasion of Ukraine sent the cost of natural gas into the stratosphere and made continued purchases from its biggest supplier (also Russia) untenable.
While in the short-term Germany, and other European nations including the UK, are increasing their purchases of seaborne liquefied natural gas (LNG), much of the continent will be forced to ration energy this winter. There is also the not insignificant issue of carbon dioxide emissions from burning natural gas that point to the need for another solution.
Germany’s response has been to double down on its pursuit of clean hydrogen, both from domestic sources and from abroad.
Clean hydrogen can help decarbonise industries from steelmaking to construction, transport to heating. Hydrogen produced by splitting water with electrolysers powered by renewable energy creates no carbon dioxide and neither does burning it or consuming it in fuel cells, making it the cleanest fuel on the planet.
Germany has doubled down on its pursuit of clean hydrogen, both from domestic sources and from abroad.
The EU aims to produce up to 1 million metric tonnes of renewable hydrogen per year by 2024, and 10 million mt per year by 2030 under its Hydrogen Strategy. It has since increased its target to include imports of 20 million mt per year by 2030 to replace 25-50 bcm per year of imported Russian gas.
Imports will cover about half of Europe’s hydrogen needs by 2050, according to a report last year from the World Energy Council.
German companies have been at the forefront of efforts to secure foreign supply of clean hydrogen and it again showed its ambition last week as Chancellor Olaf Scholz signed a five-year deal agreement to begin imports of hydrogen produced from renewable energy in Canada.
Canada is “aiming to become a major producer and exporter of hydrogen as well as related clean technologies,” according to the agreement, while Germany is “aiming to import significant amounts of renewable hydrogen to decarbonize its hard-to-abate sectors in line with its 2045 climate neutrality target.”
Canada is aiming to become a major producer and exporter of hydrogen.
Canada has vast wind resources – the deal was signed in Stephenville, a small town northeast of New York near at least two large-scale wind farms that will be used to generate clean hydrogen.
Canada “has almost boundless potential to become a superpower in sustainable energy and sustainable resource production,” Germany’s Scholz said earlier in the day. “Germany, for its part, stands ready to become one of your closest partners.”
The Germany-Canada deal is an important one in the creation of a cross-Atlantic hydrogen trade, but it won’t be the last.
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