Canada to invest in H2Global to support hydrogen market creation

Canada to invest in H2Global to support hydrogen market creation

March 25, 2024 0 By Bret Williams

The North American country is joining a German- and Dutch-supported effort to boost H2

Canada is preparing to join an effort backed by Germany and the Netherlands to help give the hydrogen market a boost.

The countries are working together to try to kickstart the trade of H2

Canada will be providing H2Global with funding to support the creation of a hydrogen market, according to Jonathan Wilkinson, the Canadian Energy and Natural Resources Minister. That said, the actual amount of the investment was not disclosed at that time.

Wilkinson and Robert Habeck, the German Economy Minister, have been preparing to make an announcement about this agreement later today. They may provide further details about the collaboration in that announcement.

Canada and Germany have already been supporting the hydrogen market

Canada and Germany already have an agreement together in which the North American country will be supplying the European nation with H2 by 2025.  That said, no global market currently exists for H2, so the countries are working to build one out. They are also making an effort to bring down price uncertainty for H2.  Until now, this uncertainty has been a key factor causing investors to hesitate.

A government-backed intermediary

H2Global would be a hydrogen market intermediary backed by governments to bring H2 sellers and buyers together by way of auctions.  Moreover, H2Global will provide coverage for any price gap that occurs between short-term sales contracts and long-term supply of the gas. This has been compared to contracts-for-difference, which have been used in other clean energy areas such as wind power.

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According to Wilkinson, the goal is to “best address premiums” as the H2 production scale rises across a period of ten years.  He pointed out that the exact details of how the auctions will be created and how they will function will be set within the next three months.

Closing thoughts

hydrogen news ebookThis investment from Germany, the Netherlands and Canada shows substantial faith in the future of the hydrogen market. Though Canada’s investment has yet to be identified, Germany’s Economy Ministry has committed €900 million (US$980 million) and additional funding from the Dutch government is also being set aside.

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