The province of Newfoundland and Labrador is scenically one of the most attractive regions in Canada. However, she rarely appears on the travel programs of European politicians. Unlike now with Chancellor Olaf Scholz. The windswept island on the Atlantic coast plays an important role in the plans of the German head of government to put Germany’s energy supply on a more secure footing. The environmentally friendly energy carrier hydrogen could come from there.
In Stephenville, a town with around 7,000 inhabitants on the west coast of the island, the paper company Abitibi was the most important employer until a few years ago – until it closed its mill. Now a new wind should blow: In and around Stephenville, wind power could be expanded, which in turn should provide energy for electrolysis and the production of hydrogen. The US company World Energy GH2, for example, wants to build a wind farm on Newfoundland’s west coast and produce hydrogen on the former Abitibi site.
For Scholz and Canada’s Prime Minister Justin Trudeau, the hydrogen economy is an important area of future cooperation on energy policy and the transition to clean, renewable energy sources. Therefore, the signing of an agreement on the establishment of a partnership in the hydrogen economy was on the agenda of the short joint stay in Stephenville. The multilateral agreement will form the basis for a hydrogen supply chain from Canada to Germany, which should be in place in just a few years.
Green hydrogen plays a decisive role in the energy strategy of both countries. It is made by electrolysis, which breaks water down into hydrogen and oxygen. The electricity required for this should come from renewable energies such as wind power. Both the electricity and the production of hydrogen are CO2-free. Hydrogen should then replace oil, coal and natural gas.
Canada is also a major producer of natural gas. The Ukraine war and the throttling of Russian gas supplies to Germany make it necessary to look for new suppliers, at least for a transitional period. With its enormous resources, Canada is one of the largest natural gas producers in the world. But only on the west coast is a terminal for exports to Asia nearing completion. There are currently no terminals on the east coast for exporting liquefied natural gas (LNG) to Europe. A terminal of the Spanish group Repsol can only be used for imports so far. Canada’s natural gas fields are mainly in the west, the transport routes are long and pipeline construction is controversial.
Canadian LNG cannot be a short-term and direct help for Germany. But the chancellor and prime minister made it clear that Canada, by supplying it through the West Coast terminal, is also increasing the amount of natural gas available on the world market, thereby helping Germany as well. Because this could release natural gas quantities on the world market, which could then come to Germany. In addition, Canadian natural gas flows to the US and is part of US gas exports to Europe.
The companies involved have to decide whether the construction of an export terminal is economically viable in view of the costs and the planned switch to hydrogen. At the economic conference in Toronto, however, Scholz emphasized that Canada was Germany’s “partner of choice” when it came to decoupling from Russian energy. “Temporarily, this means increasing our LNG imports. We hope that Canadian liquefied natural gas will play an important role in this.”
In addition to hydrogen and natural gas, the so-called critical minerals and metals are an important part of the closer cooperation. Canada has many important raw materials such as lithium, cobalt and rare earths that German industry needs. Canada should now help free Germany from its dependence on countries like China. Apparently German industry is very interested. But there has been talk of this shift for years, and little has happened. Now politicians are hoping that industry will follow suit. Pioneers can be VW and Mercedes, which signed agreements in Toronto. Both want to increase their collaboration with Canada on electric vehicle manufacturing and battery production, which includes developing a supply chain for the minerals critical to them.
It shouldn’t be up to the two heads of government, they wanted to make that clear. The fact that Trudeau has accompanied the Federal Chancellor on the trip since Sunday evening and has appeared with him in Montreal, Toronto and Stephenville is seen in Canada as a remarkable sign of high esteem. Conversely, the three days that Scholz planned for his inaugural visit to Canada are also noteworthy. When Trudeau expressly pointed out in Toronto on Monday evening that Scholz was “not on his way to or from Washington”, but only came to Canada, the invited guests from politics and business at the official dinner erupted in loud applause. Scholz thanked: “I’m glad to be here with friends.”
