Is the Canada-Germany ‘hydrogen deal’ overly ambitious?


Canada and Germany have agreed to support the development of hydrogen by establishing a trans-Atlantic supply corridor to facilitate Canadian hydrogen exports by 2025.

Paul Martin, co-founder of the Hydrogen Science Coalition, said the project is still at a very early stage. “I would be shocked if this is making much less shipping ammonia by 2025,” he told pv magazine, adding that the project has not gone through an environmental impact study yet. 

The so-called “hydrogen deal” signed this week includes a wind project, a hydrogen plant, and an ammonia synthesis loop, or “synloop.” The project is focused on ammonia as a way to ship hydrogen.

“There is the expectation of starting to export clean hydrogen by 2025. Of course the volumes were not discussed,” Ivette Vera-Perez, the president and CEO of the Canadian Hydrogen and Fuel Cell Association (CHFCA), told pv magazine.

The details are still not clear, but under their first memorandum of understanding (MoU), EverWind Fuels Company and Uniper have agreed to negotiate a binding offtake agreement for 500,000 tons per annum of green ammonia.

“The signing of this MOU with Uniper in addition to the simultaneous signing of another offtake MoU today results in EverWind having commitments to put in place offtake for one million tonnes per annum of future green ammonia production at Point Tupper,” wrote the Canadian company. 

The two countries focused on green hydrogen, as it is coherent with their energy strategies and ambitions.

“Canada did not develop its LNG export potential in the 1980s, and watched Australia become one of the world’s top exporters. Clean, low-emissions hydrogen gives Canada a second chance, and the government is determined to lead, this time with a zero-emission fuel,” Matthew Klippenstein, Regional Director for Western Canada for CHCFA, told pv magazine. 

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Canada and Germany are also strengthening ties in research, and other sectors. For instance, Canada signed two new MoUs with Volkswagen and Mercedes-Benz to advance collaboration in Canada across the automotive, battery, and critical minerals sectors. The agreements include Canadian cobalt, graphite, nickel and lithium.

Canada is also clinching deals with companies from other European and Western countries. Sweden’s ABB recently signed a deal with Canadian company Hydrogen Optimized, for example. And Fortescue Future Industries could take part in other hydrogen projects.

“And this is only one of four hydrogen projects being proposed in the Atlantic provinces,” said Vera-Perez.

According to the Canadian Hydrogen and Fuel Cell Association (CHFCA), local governments, and indigenous communities are largely in favor of wind and ammonia projects.

“Hydro capacity was also mentioned, but the conversation was centred on on-shore wind, with the understanding that off-shore wind capabilities are also being developed: there was an Irish company invited to participate and showcase their floating wind facilities,” said Vera-Perez.

Not everybody agrees on the potential of Canada in the hydrogen sector, at least from a financial perspective. Canada isn't really a low-cost location for the production of green hydrogen for export, said Toronto-based Martin.

“Newfoundland wind capacity factors aren't any higher than those in Europe as far as I know, nor are costs of deploying wind turbines there dramatically lower either- and then you need to add the costs of making hydrogen and then ammonia rather than just carrying power to a ready market via HVDC cables,” Martin said. “Other locations, where wind plus solar give capacity factors of 70% rather than the around 35% expected from onshore wind, should be able to make ammonia much more cheaply.”

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