Canada intends to start shipping green hydrogen produced by wind farms by 2025, a first step in a partnership to help Europe’s largest economy reduce its dependence on fossil fuels.

Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz signed a five-year hydrogen deal on Tuesday in Newfoundland and Labrador, a remote province on Canada’s east coast with abundant wind power potential.

The gaseous fuel, which burns hot enough to be used to make steel, is seen to play a key role in curbing industrial emissions as well as ultimately powering cars, trucks and ships. The two countries are committed in the agreement to “build a transatlantic supply chain for hydrogen before 2030, with a target of first deliveries for 2025.”

According to the agreement, Canada “aims to become a major producer and exporter of hydrogen as well as related clean technologies”, and seeks to attract foreign direct investment to build infrastructure.

Meanwhile, Germany is aiming to “import significant amounts of renewable hydrogen to decarbonize its hard-to-absorb areas in line with the 2045 climate neutrality target.”

Trudeau and Scholz signed the agreement in Stephenville, a small town with a deep sea port on the Gulf of St. Lawrence, 1,000 miles northeast of New York. There are at least two large-scale wind farm projects proposed for that area that would use water electrolysis to produce hydrogen.

Speaking earlier in the day at a business conference in Toronto, Scholz said Canada has “an almost limitless potential to become a superpower in sustainable energy and sustainable resource production.”

The chancellor said that “Germany, for its part, is ready to be one of your closest partners.”

Scholz is on the final day of a three-day visit to Canada, which includes a delegation including Economy Minister Robert Habeck and prominent German business leaders.

In this visit Volkswagen AG and Mercedes-Benz Group AG have tied up with Canada to secure access to raw materials such as nickel, cobalt and lithium for battery production.

Scholz also met with representatives from the Pension Fund of Canada in Toronto to lobby for more green investment to support Germany’s transition toward a carbon neutral economy.

Canadian and German officials are still examining options for shipping liquefied natural gas to Germany, but Trudeau said Monday that there should be a strong business case to justify building export infrastructure on Canada’s east coast. In support of Scholz’s effort to wean his country off Russian gas, the prime minister said he would be willing to reduce the regulatory burden if the private sector decides to consider LNG export projects as an economic one.

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