Ahead of a visit to Canada next week by German Chancellor Olaf Scholz, German and Canadian business groups have issued a joint statement calling for a stronger partnership between their two countries on liquefied natural gas, hydrogen and critical minerals.
Germany has been looking for ways of reducing its Russian energy imports as tensions have risen over Moscow’s invasion of Ukraine. But Canada’s ability to help replace that Russian supply is limited, because this country currently has no operational export terminals for LNG.
“In the short term, Europe needs to wean itself from its dependence on Russian energy and increase its imports of energy products, especially LNG, from other suppliers,” the joint statement says. “Currently, global LNG supply is limited, as is Europe’s capacity to import it. By speeding up the deployment of Canadian LNG export facilities, Canada can help keep European industry running and households warm.”
The statement was issued by the Business Council of Canada, the Canadian Chamber of Commerce, the Canadian German Chamber of Industry and Commerce, and a group of four German business associations called the Transatlantic Business Initiative.
Volker Treier, chief executive of foreign trade for the Association of German Chambers of Industry and Commerce, one of the groups represented by the Transatlantic Business Initiative, said Germany is prepared to pay significantly more for energy to keep its industry running. “We need to diversify in Germany, primarily in terms of energy supply,” he said.
Economic relations between Canada and Germany have historically not been a priority for either country, Mr. Treier added. Canada is Germany’s 31st-largest trading partner. In 2021, the volume of trade between the two countries was €16.2-billion. That’s roughly equivalent to the volume of trade between Germany and Australia.
Germany currently has a positive trade balance with Canada: €10-billion of exports, offset by €6.2-billion in imports. The European country mainly exports cars and car parts to Canada, as well as machinery and pharmaceutical goods. Its Canadian imports are almost exclusively metal ores and metals.
“There is still a lot of room for improvement in terms of trading volume,” Mr. Treier said. “Chancellor Scholz’s trip is overdue.“
The joint statement also calls on Germany and Canada to work together to enable future Canadian exports of hydrogen, which produces no harmful emissions when used for energy. Increased adoption of hydrogen fuel, the business groups argue, would help Canada and Europe meet their climate targets.
“While markets for renewable and low-carbon hydrogen are still in their infancy, increased Canada-Germany cooperation has the potential to accelerate the hydrogen market ramp-up in both countries and support international hydrogen trade,“ the statement says.
The German government announced last week that, during Mr. Scholz’s visit to Canada, he and Prime Minister Justin Trudeau will sign an agreement to jointly explore the production of hydrogen fuel in Canada for export to Germany.
Mr. Scholz will be in Canada from Aug. 21 to 23, and the two heads of government will sign the hydrogen accord during a stop in Stephenville, N.L. The Chancellor will be accompanied on his trip by Germany‘s federal Minister for Economic Affairs and Climate Protection, Robert Habeck, and a business delegation.
According to two sources, the CEO of turbine manufacturer Siemens Energy, Christian Bruch, will be part of the delegation. The Globe is not identifying the sources because they were not authorized to speak for the company.
Siemens operates a plant near Montreal where a turbine for Nord Stream 1, the pipeline that carries natural gas from Russia to Northern Germany, was recently repaired. At the urging of Germany and other European countries, who feared disruptions to gas supplies, Canada issued a special exception to its sanctions against Moscow in order to allow the turbine and others like it to be returned to Russia. The device continues to be a focal point of an international dispute over sanctions and Russian energy.
The German delegation will also include a representative from Voith, a supplier of equipment for hydroelectric plants, as well as representatives of companies from Germany’s energy production, automotive and chemical sectors.
In their statement, the business groups say the Chancellor’s trip should also be used to explore how realistic it would be to increase rare mineral mining in Canada, and what doing so would cost.
Germany and the European Union are trying to diversify their supplies of critical minerals, and to build resilient and sustainable supply chains with trusted and reliable partners, the statement says.
“Mining minerals will be much more expensive in Canada than in Russia or China, but German industry is willing to pay higher prices in exchange for co-operation with a like-minded country,” Mr. Treier said.
The federal government said in its 2022 budget that it is prepared to spend $3.8-billion to fund the critical minerals industry over the next eight years.
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