Canada, Germany sign green energy deal in bid to power fledgling hydrogen sector

Canada and Germany have signed an agreement to team up on green energy innovation and trade — with an eye to hydrogen as the market for the low-carbon fuel heats up.

Signed today by the two countries' energy ministers, the memorandum of understanding outlines a plan to co-operate on energy policy and research as both countries strive to reach the goal of net-zero emissions by 2050.

Natural Resources Minister Seamus O'Regan says Quebec and his home province of Newfoundland and Labrador are particularly well poised to start generating so-called "green hydrogen," which burns cleanly and can be produced using wind and solar power.

"We have tremendous challenges and opportunities here in Canada," said O'Regan. "There is no other democracy with the bounty of natural resources that we have and yet we face the urgency of climate change."

O'Regan stressed the need to retrain workers in regions with economies long reliant on struggling fossil-fuel industries, saying the transition could be "messy."

"It often makes people on both sides of the political spectrum, either side, unhappy," he said in a virtual signing ceremony with Peter Altmaier, Germany's minister of economic affairs and energy.

"Oil will be with us for some time and it will continue to be a part of the Canadian economy, without question."

LNG a 'bridge fuel'

Liquefied natural gas could serve as a handy "bridge fuel" to cross over into green-energy territory, he added, with Germany aiming to integrate LNG imports as well as hydrogen production into its own energy strategy.

The two countries might not see fully eye to eye on hydrogen, with Canada focusing recently on so-called "blue hydrogen."

The fuel is typically derived from natural gas or other fossil fuels and coupled with carbon-capture technology to reduce emissions, making it more politically viable in western Canadian provinces that boast abundant natural gas reserves.

Senior officials from several other G20 countries joined Canada and Germany at a virtual international energy forum out of Berlin Tuesday; they also promoted hydrogen as a key tool to lower worldwide carbon emissions.

United States President Joe Biden's special envoy for climate, John Kerry, told the forum he supports O'Regan's push for creative and collaborative solutions, including the expansion of hydrogen, as a way for governments and the private sector to work together in transitioning away from heavy reliance on fossil fuels.

"I think hydrogen is perhaps one of our greatest chances as obviously, that's a shared point of view. Whole economies can be built on it," Kerry said.

Foreign affairs and innovation ministers from Germany, Italy and the European Union joined Canada and the U.S. in stressing the need for greater collaboration to help build the renewable energy sector in developing and developed nations.

When challenged over Canada's ongoing spending on the fossil fuel industry, O'Regan defended federal policy.

"We are not going to get oil-free overnight, by any stretch of the imagination, so in the meantime we have to do the hard work of lowering the emissions involved in the extraction and use of oil," he said.

"This is not an act of charity. These are the people we need to do the hard work."