Germany’s Olaf Scholz coming to Canada to sign energy deal. Here’s why it matters

The deal to export Canadian-produced hydrogen to Germany comes years before such a shipment will be possible, and as Germany seeks to cut its ties to Russian oil and gas.

German Chancellor Olaf Scholz’s visit to Canada comes during a crucial moment for Germany’s energy future amid Russia’s invasion of Ukraine, allowing Canada an opportunity to help while boosting its own economy.

The centerpiece of the visit — the signing of a months-in-the-making green energy agreement in Newfoundland with Prime Minister Justin Trudeau on Tuesday — will make Germany the first customer of a planned hydrogen production and export facility, the first of its kind in Canada.

While that first shipment is likely years away, the deal will mark a new phase in the relationship between the longtime allies.

That relationship was tested earlier this year when Canada hesitated to return a turbine for a Russian pipeline supplying natural gas to Germany, the Nord Stream 1, that was being repaired in Montreal. The turbine was ultimately returned in July in order to restore the flow of gas, despite sanctions on Russian energy due to the war in Ukraine.

Trudeau and his government faced criticism for the move, which the government has defended as necessary for European gas supply. Jobs and global inflation also factored into the decision, internal government documents revealed this month.

Scholz’s arrival on Sunday in Montreal, where he will be welcomed by Deputy Prime Minister Chrystia Freeland, marks his first visit to Canada since he took over from longtime chancellor Angela Merkel last December.

Trudeau previously met Scholz in Berlin in March and the two leaders held several discussions at the G7 summit in the Bavarian Alps in June.

During the summit, the pair not only discussed the Russian turbine but also the possibility of Canadian hydrogen exports, which Canada had been pitching to Germany and other countries since before Russia invaded Ukraine in February.