Trudeau and German Chancellor Olaf Scholz to sign hydrogen deal in Newfoundland

Prime Minister Justin Trudeau and Olaf Scholz, Chancellor of Germany take a stroll at the G7 Summit in Schloss Elmau on Monday, June 27, 2022. THE CANADIAN PRESS/Paul Chiasson

Prime Minister Justin Trudeau and German Chancellor Olaf Scholz are set to sign a green energy agreement later this month in Newfoundland that could prove pivotal to Canada's nascent hydrogen industry.

The German government on Friday issued a statement confirming the agreement will be signed Aug. 23 in Stephenville, where a Newfoundland-based company plans to build a zero-emission plant that will use wind energy to produce hydrogen and ammonia for export.

If approved, the project would be the first of its kind in Canada.

Germany is keen to find new sources of energy because Russia's invasion of Ukraine has led to a surge in natural gas prices. As well, Russia has reduced its flow of natural gas to its European customers, prompting concerns about supply shortages.

Meanwhile, the company behind the Newfoundland project, World Energy GH2, has said the first phase of the proposal calls for building up 164 onshore wind turbines to power a hydrogen production facility at the deep-sea port at Stephenville. Long-term plans call for tripling the size of the project.

"There is a heightened urgency for Canada to step into this new market that's in such high demand," said Stephenville Mayor Tom Rose, who noted the province did not lift a moratorium on wind farm development until this year.

"We're poised now to be the green energy hub of North America."

Among the companies behind the project is CFFI Ventures Inc., led by Nova Scotia-based billionaire John Risley, who is best known as co-founder of Clearwater Seafoods.

As for Trudeau and Scholz, Rose said they will be joined in Stephenville by cabinet ministers and a delegation of German business leaders who will attend a green energy trade show before the signing ceremony.

Rose said Stephenville is an ideal place for a wind farm because the area is known for having a world-class "wind corridor." As well, the town has the means to produce the large amounts of water needed for hydrogen production because heavy-duty infrastructure remains in place from the Abitibi-Price paper mill that closed in 2005.

"It appears to be the energy of the future and the demand is very robust," said Rose, who was born and raised in the area. "We're stepping up when another country needs our resources."

The multibillion-dollar project was registered with the province in June and now requires an environmental impact statement.

In its proposal, World Energy GH2 says it is on the cutting edge of a new, green industry.

"The development of large-scale green hydrogen production facilities is just starting, providing (Newfoundland and Labrador) and Canada with the opportunity and advantages of being a first mover in the green energy sector," the proposal says.

"(Newfoundland and Labrador's unique geography, strong wind resource and proximity to large centres of demand, will make it a globally competitive green hydrogen producing region."

The company points out that the vast majority of existing hydrogen production relies on natural gas or coal for its electricity, which means it produces unwanted carbon emissions.

Meanwhile, the company says construction of its first wind farm is slated for late next year on the Port au Port Peninsula.

In Cape St. George, which is on the peninsula, Mayor Stella Cornect has said residents are worried about the project's potential impact on the area's delicate ecosystem, which includes rare and endangered plants.

On Saturday, the Prime Minister's Office confirmed Trudeau will accompany the chancellor on a brief Canadian visit that will include earlier stops in Montreal and Toronto, starting Aug. 21.

This report by The Canadian Press was first published Aug. 14, 2022.