Atlantic hydrogen firms welcome $200M in German investment for Canadian exports

Steam rises from a hydrogen train at a station in Wehrheim near Frankfurt, Germany, on March 5, 2025. (AP Photo/Michael Probst)

HALIFAX — The budding hydrogen sector in Atlantic Canada is welcoming a 200-million euro commitment from the European Union to support the production of renewable hydrogen and its derivatives in Canada.

The EU’s executive branch approved the money last week saying it will unlock matching funds from the Canadian government for fuels that would be exported to Germany. It’s the EU’s final regulatory step to bring into operation Canada and Germany’s joint declaration of intent to work together on clean hydrogen.

Former prime minister Justin Trudeau and former German chancellor Olaf Scholz inked the pact in western Newfoundland in 2022 as a way to lessen the European country’s dependence on Russian energy following Russia’s invasion of Ukraine.

Matthew Tinari, chief financial officer of Everwind Fuels, which has a hydrogen project underway on Newfoundland’s Burin Peninsula and a more advanced development in Point Tupper, N.S., says securing European buyers via so-called offtake agreements is key to landing financing. While the company has begun prep work, like tree clearing, on some of its wind farms, he says it won’t break ground on the main Nova Scotia hydrogen plant without agreements with buyers.

“We have extremely interested banks to work on the project financing. Extremely interested and, really, sitting waiting, equity investors. But the last key piece of this whole thing is locking in the offtake contract,” Tinari said in an interview Wednesday.

Auctions for Canadian hydrogen suppliers seeking rights to supply Germany are scheduled for 2027 with up to 300 megawatts of capacity on offer. The hydrogen will then be auctioned off to German buyers. The EU says that much fuel could mean almost 2.5 million fewer tonnes of carbon dioxide in the atmosphere.

“There’s a massive amount of investment moving forward in Germany on the infrastructure, because really, this is a new industry and sector that we’ve been involved in,” Colter Eadie, CEO of Abraxas Power, which has a joint venture with EDF Power Solutions for a hydrogen plant in Botwood, N.L., said in an interview Wednesday.

“This has had to be a partnership between both sides of the pond in terms of developing both the infrastructure on the receiving side as well as the supply on the Canadian side.”

About 35 kilometres northwest of Grand Falls-Windsor, N.L., Abraxas’ Exploits Valley Renewable Energy Corporation project plans to produce 180,000 tonnes of hydrogen and about one million tonnes of green-certified ammonia every year.

The government of Canada says hydrogen has various applications, including as fuel for transportation, for power generation and to heat industrial buildings.

Producers typically use electricity to separate hydrogen molecules from water. Natural gas can be used to create that power, but it’s carbon intensive. “Green hydrogen” usually uses wind power or other renewables for the process. The hydrogen is combined with nitrogen from the air to convert it into ammonia for long-distance shipping as ammonia is more energy dense and supported by more existing infrastructure than hydrogen gas. It’s then “cracked” at the other end of the supply chain and converted back into hydrogen.

However, some early promoters of hydrogen have had second thoughts. In Newfoundland and Labrador, at least two wind-to-hydrogen projects have recently been scrapped in favour of regular wind energy developments.

Pattern Energy withdrew its hydrogen project from the provincial government’s environmental assessment process in November, saying it would instead submit a stand-alone wind energy development.

The Financial Post reported in December that seafood magnate John Risley was also shifting focus to wind because a European market for green hydrogen energy hadn’t materialized. Risley is a partner and former director of World Energy GH2, which had planned to build a large wind-powered hydrogen energy operation in western Newfoundland. Instead, Risley said the project’s wind turbines will power a future energy grid linking Newfoundland, New Brunswick and Nova Scotia.

Tinari says it’s pretty typical to have lots of potential players jump in at the early stages of a new sector, and for some of them to not work out. Some of the timelines presented, like a projection that hydrogen would be shipped to Europe by late 2025, were also too optimistic.

“What that did was it kind of weeded out the projects that were serious about investing in engineering and developing a solution and those that were kind of getting in on the early excitement,” he said.

Eadie said he knew there would be some consolidation in the sector and that the real work on hydrogen development would begin after the honeymoon phase was over. He says Atlantic Canada has one of the strongest areas for hydrogen development, with its clear shipping lanes to Europe and more predictable regulatory framework than the U.S. where the Trump administration has been pulling approvals for wind farms.

“I know there’s been a shift with some of the other (hydrogen) projects, but we really don’t see ourselves being uncompetitive in the market and we do see a path forward for commercialization,” he said.

Eadie says his company’s project is about halfway through its engineering process and is seeking environmental approvals. If everything is approved, he says construction could begin in the first quarter of 2027.

By Devin Stevens

This report by The Canadian Press was first published Jan. 21, 2026.

-- With files from Sarah Smellie in St. John’s.