Canada is buddying up with its pilsner-drinking, schnitzel-eating ally to kick-start a new clean energy trade market.
What happened: Canada and Germany agreed to help accelerate the creation of a global market for clean hydrogen gas — a low-emission energy source used to power industrial machines, heavy vehicles, and residential heating — and connect Atlantic Canada producers with EU buyers.
- Both countries will put money into creating hydrogen gas auctions that aim to alleviate some of the price uncertainty that has deterred investors from hydrogen.
Why it matters: Hydrogen is considered a potential long-term clean energy solution, with Ottawa investing billions into helping fund new projects. Creating a stable hydrogen market is a crucial step towards making it a legit tradeable commodity for Canada and its allies.
- Part of the incentive to create a steady flow of Canadian hydrogen to European countries is to cut their reliance on Russian energy, as the war in Ukraine drags on.
Big picture: More than 80 low-carbon hydrogen production projects have been announced in Canada to date. And with the feds setting aside more than $17 billion in tax credits to fund projects until 2035, hydrogen is set to play a key role in the energy transition.—LA