This articles follows our recent Thought Leadership piece on the Federal Government’s announcement of significant investment through the Smart Renewables and Electrification Pathways Program in Nova Scotia clean energy projects.

By Dave Randell, Sadira Jan, Allison Whelan, Alanna Waberski, G. John Samms, Daniel Mowat-Rose, Marina Luro¹

The Minister of Energy and Natural Resources, the Honourable Jonathan Wilkinson, has announced a commitment of $300 million for the advancement of Canada’s energy sector, focused on clean hydrogen trade under the Canada-Germany Hydrogen Alliance. This announcement is significant for the growing wind energy and renewables sector in Atlantic Canada.

Background on Hydrogen Strategy

In December 2020, the Federal Government announced Canada’s Hydrogen Strategy – a plan to harness off-shore hydrogen potential to aid in the country’s transition to net-zero energy emissions by 2050. The Hydrogen Strategy aims to work with provincial and territorial governments, Indigenous groups, and other stakeholders to expand Canada’s clean energy sector through investment in hydrogen energy developments.

In 2023, Nova Scotia released its Green Hydrogen Action Plan, setting out its planned path to promote and encourage development in the green hydrogen sector, leveraging the natural benefits and advantages that Nova Scotia’s geography and environment afford it in this area. Read about this and what other developments are occurring in the Atlantic region’s energy sector in our Energy Watch publication.

Hydrogen has the potential for considerable impacts on the renewable energy sector. By acting as an energy carrier, hydrogen complements other renewable energy sources, including through the storage of energy and facilitation of its movement between energy sources without the production of any greenhouse gas emissions. Energy market participants and other stakeholders see hydrogen as a key ingredient for achieving Canada’s decarbonization and clean energy targets by 2050.

The Canada-Germany Hydrogen Alliance: Taking clean energy international

Under the Canada-Germany Hydrogen Alliance, the export of clean hydrogen from Canada to Germany is expected to begin by 2025.

The Canada-Germany bilateral agreement was reinforced in March 2024, when Canada and Germany signed a memorandum of understanding reaffirming the countries’ shared commitment to advancing the hydrogen trade. In April 2024, the Government released the Hydrogen Strategy for Canada: Progress Report, setting out Canada’s progress to date and outlining its path forward. Highlights of the Progress Report include numerous projects in the Atlantic region currently going through the regulatory and development process.

Next steps for Canada’s investment into clean hydrogen

In Canada, funding will be allocated to developers via competitive auction, expected to be held by the end of 2024 following European Commission review of the proposed auction format and confirmation of Germany’s comparable funding commitment.

Read more about the growth and potential for the Atlantic Canadian wind energy and green hydrogen sector here in our Energy Group’s Winds of Change series.

This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Energy Group.

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1 At time of publication, Marina Luro was employed with the Firm as a summer student.