Canada, Germany strengthen commitment to transatlantic H2 corridor

Germany and Canada are enhancing their clean hydrogen partnership by pledging to establish a bilateral programme aimed at developing a transatlantic hydrogen corridor and launching a joint H2Global financing window.

Canada's energy minister Jonathan Wilkinson and German economy minister Robert Habeck on Monday signed a memorandum of understanding (MoU) designed to accelerate commercial-scale hydrogen trade between the two countries, secure early access for clean Canadian hydrogen producers in the German market and strengthen the two countries’ efforts to fight climate change and enhance energy security.

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Under this agreement, Canada and Germany will team up to create a special channel called the Canada-Germany Bilateral Window. It will be managed by Germany's H2Global Foundation. This channel will help connect Canadian hydrogen producers with German buyers in the industrial and energy sectors. The aim is to set up auctions that match supply and demand, making it easier to finalise deals for selling clean Canadian hydrogen and its products to Germany.

In a separate statement, the German economy ministry said that the memorandum is intended to expand the H2Global auction financing model, which was successfully launched in Germany, to include the Canadian government's willingness to contribute financially to the scheme.

The pact follows the signing of a German-Canadian alliance in August 2022 under which German energy majors E.on SE and Uniper SE plan to import up to one million tonnes of green ammonia per year from Canada.

Since then, there has been progress, with the announcement of several planned green hydrogen export projects in Canada and new hydrogen partnerships between Germany and the Canadian provinces of Newfoundland and Labrador, ports and companies, the German ministry noted.

Commenting on the latest MoU, Habeck said: “We welcome the progress in Canada in the development of several renewable hydrogen and ammonia projects. Although some challenges remain, we believe a common H2-Global financing window can play an important role in closing the remaining pricing gap. In this way, we are promoting the development of hydrogen production capacities with the aim of increasing the availability of hydrogen.”

Through the H2Global programme, the German government offers financing to cover the gap between the higher global market price of hydrogen production and purchase and the lower regional resale price, ensuring economic viability for hydrogen imports.