Canada and Germany Sign Landmark Hydrogen Trade Corridor Agreement
OTTAWA/BERLIN, March 18, 2024 – The Government of Canada and the German Federal Ministry for Economic Affairs and Energy today formalized a historic Memorandum of Understanding to create a dedicated Canada-Germany Hydrogen Trade Corridor, marking the first bilateral hydrogen trading mechanism between a G7 producer nation and Europe’s largest industrial consumer.
The agreement establishes a specialized Bilateral Window through Germany’s H2Global Foundation, which will orchestrate coordinated supply-and-demand auctions to connect Canadian hydrogen producers directly with German offtakers in the manufacturing, chemical, and energy distribution sectors. The mechanism aims to facilitate commercially binding contracts for up to one million tonnes of clean hydrogen and its derivatives annually by 2030, with first deliveries targeted for 2027.
This trade corridor builds upon the Canada-Germany Hydrogen Alliance established in Stephenville, Newfoundland, in August 2022. Under the terms signed today, Canadian producers will gain first-mover advantage in the rapidly consolidating European hydrogen import market. According to the International Energy Agency’s Global Hydrogen Review 2024, if all announced projects materialize, export-oriented hydrogen production could reach 16 million tonnes per annum by 2030, with Europe targeted as the primary import destination for 75% of these projects . The Canada-Germany corridor represents one of the most advanced public-private frameworks to convert project announcements into executable trade flows.
The bilateral window will be administered by H2Global, with the German government committing initial auction volumes of 100,000 tonnes hydrogen-equivalent in the first procurement round. Canadian exporters can leverage the country’s newly implemented Clean Hydrogen Investment Tax Credit, which provides up to 40% refundable credit for eligible projects, combined with $297 million in export development loans already deployed to leading domestic producers. These policy instruments position Canadian hydrogen at a delivered cost competitive with domestic European production, particularly for provinces with access to Atlantic export infrastructure.
Infrastructure development is advancing in lockstep with commercial arrangements. Simultaneous with today’s MOU, the Port of Argentia, Newfoundland, and the Hamburg Port Authority executed a Letter of Intent to collaborate on green hydrogen derivative logistics, establishing the physical maritime backbone for the corridor. Argentia is partnered with Pattern Energy on a 300-MW wind-to-hydrogen production facility, while Hamburg is developing Europe’s largest hydrogen import terminal capable of handling 1.2 million tonnes annually by 2030.
The corridor will initially focus on ammonia and liquid organic hydrogen carriers for maritime transport, with pipeline integration planned through the proposed SoutH2 Corridor connecting North Africa to Central Europe. Canadian projects in Alberta, British Columbia, and Atlantic Canada are expected to supply the majority of exports, utilizing both blue hydrogen with carbon capture and green hydrogen from renewable sources. According to Natural Resources Canada, the country’s clean hydrogen production capacity is projected to exceed 8 million tonnes annually by 2035, with at least 30% earmarked for export markets.
Energy security and decarbonization imperatives drive the agreement’s strategic importance. Germany’s industrial sector, responsible for 24% of national emissions, requires 90-110 TWh of hydrogen annually by 2030 to meet climate targets under the European Green Deal. The Canada-Germany corridor diversifies Germany’s supply base away from sole dependence on North African and Middle Eastern producers while providing Canada a stable, premium market for its developing hydrogen sector.
Quote from The Honourable Jonathan Wilkinson, Canada’s Minister of Energy and Natural Resources: “This agreement positions Canada as Germany’s hydrogen partner of choice in the transatlantic energy transition. By combining Canada’s abundant clean energy resources with German industrial demand and H2Global’s innovative procurement mechanism, we are creating a template for how nations can rapidly scale hydrogen trade while delivering good jobs and emission reductions at home.”
Quote from Michael Strugl, CEO of VERBUND AG and Chair of H2Global’s Industrial Advisory Board: “Canadian hydrogen offers the scale, quality, and reliability German industry needs. The Bilateral Window removes commercial friction and provides the long-term contract security necessary to finalize investment decisions on both production and offtake. We expect this model to be replicated across multiple trade corridors.”
Market analysis indicates the global hydrogen trade could reach 53 million tonnes annually by 2050, representing 20% of total projected demand and requiring approximately $2.49 trillion in cumulative investment across production, transportation, and storage infrastructure. Canada, with its established energy export expertise and low-carbon resource base, is strategically positioned to capture 8-12% of this market, generating an estimated CAD $50 billion in annual export revenues by 2040.
The agreement includes provisions for technology transfer, workforce development, and environmental safeguards. Annual ministerial-CEO roundtables will monitor implementation, with the first review scheduled for Q4 2024. Both nations have committed to harmonize certification standards under the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) framework, ensuring seamless cross-border transactions.
About Natural Resources Canada
Natural Resources Canada is the federal department responsible for Canada’s energy, minerals, metals, and forest resources. The department drives innovation and expertise in clean energy, including hydrogen, supports the sustainable development of natural resources, and builds economic opportunities for Canadians.
About H2Global Foundation
Established by the German government, H2Global is a unique public-private partnership mechanism designed to accelerate international hydrogen trade. Through double-auction contracts, H2Global bridges the price gap between high-cost green hydrogen production and industrial willingness to pay, de-risking investments and creating liquid global markets.
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