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Canada, Germany, pursuing net-zero carbon emissions, team on hydrogen
Gary Park for Petroleum News
Canada and Germany have formed a partnership to enter the global race to produce and sell hydrogen in the market for low-carbon energy, with Germany already strongly placed in the world’s largest markets for alternative fuels.
Energy ministers for the two countries signed a memorandum of understanding earlier in March to cooperate on energy policy and research as they strive to achieve net-zero greenhouse gas emissions by 2050.
But what they have not yet agreed to is what type of hydrogen they prefer - “blue,” which is produced from natural gas and carbon capture and storage, CCS, or “green,”, which is produced by water electrolysis using intermittent zero carbon electricity generated by wind and solar facilities.
Canada’s Natural Resources Minister Seamus O’Regan leans heavily to “blue,” especially coming on the heels of Canada’s recent decision to focus on “blue” by making it more politically viable and palatable in Western Canada, which has abundant reserves of natural gas and other fossil fuels.
When challenged over Canada’s continuing financial support for the fossil fuel industry, O’Regan left no doubt he is counting heavily on a new federal policy to promote hydrogen through the investment of C$30 billion over the next 10 years to capture and store greenhouse gas emissions from the exploitation of oil and gas.
German view German Economic Affairs and Energy Minister Peter Altmaier agreed with O’Regan that the transition to fuels such as hydrogen “could be messy,” but stopped short of taking a definitive stand, even though the German government has demonstrated its preference for “green” in a report it commissioned and released in mid-March.
“How the focus on blue hydrogen will be aligned with Canada’s goal of reaching climate neutrality by 2050 is not spelled out in detail,” said an executive summary of the report by the Berlin-based consultant Adelphi.
“As a result, the (Canadian strategy) seems to be more of a vision for the future of those provinces (primarily Alberta, British Columbia, Saskatchewan and Newfoundland) with large fossil fuel resources.”
But the summary was bullish on Canada’s green-hydrogen potential, especially in Quebec and the Atlantic region, where it said the conditions are “optimal for a rapid market uptake of green hydrogen, possibly among the best in the world.”
Canadian advantage Raffaele Piria, one of the report’s authors, told the Globe and Mail that Canada has the advantage over some of its likely rivals for hydrogen exports, such as Saudi Arabia or Morocco, because of its “geopolitical stability.”
He also noted Canada’s proximity to European ports, especially from Newfoundland, which he said has great potential to produce green hydrogen.
Piria doubts Germany will direct significant public funds to advance blue hydrogen because of the entrenched environmental opposition to advancing carbon-capture technology, although he conceded “blue” might have a limited chance to gain support as a transitional fuel.
Sabine Sparwasser, Germany’s ambassador to Canada, said her country obviously believes that green hydrogen will be the best hope of reversing climate change trends, but suggested there is a chance for “blue” if Canada moves quickly to get those supplies to market, while the “green” technology is being developed.
The Adelphi report said blue hydrogen produced in Canada might find receptive markets in Asia and the United States.
The Canadian government has estimated returns from its hydrogen exports could total C$50 billion and create 350,000 jobs by 2050.
LNG as ‘bridge fuel’ O’Regan is also making a case for LNG to serve as a “bridge fuel” into green-energy territory, noting that Germany is aiming to integrate LNG imports as well as hydrogen production into its own energy strategy.
Senior officials from several G20 countries joined Canada and Germany at a virtual international energy forum in mid-March to promote hydrogen as a key tool to lower worldwide carbon emissions.
President Joe Biden’s special climate envoy 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 combine in reducing the reliance on fossil fuels.
“I think hydrogen is perhaps one of our greatest chances (to develop a renewable energy industry). Whole economies can be built on it,” he said.
- GARY PARK
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