(Bloomberg) — South Korean company SK Ecoplant Co. will invest in and help develop a $4.5 billion green hydrogen project in Canada that’s set to be one the largest such plants in the world.
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The renewable energy unit of SK Inc. will buy a 20% stake in the facility in the eastern province of Newfoundland and Labrador for $50 million, it said in a statement. The project will produce green hydrogen and then covert it to ammonia to be exported to Europe from 2026, it said.
The announcement came during Prime Minister Justin Trudeau’s visit to South Korea this week. Canada is trying to position itself as a major proucer, user and exporter of hydrogen. It signed a green hydrogen supply pact with Germany last year, and also has a separate $6 billion project to produce the fuel in Nova Scotia, another eastern province.
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Hydrogen is made by electrolysis, a process that sends an electric current through water to split hydrogen atoms from oxygen. To count as green hydrogen, the electricity must come from renewable sources. While it’s widely tipped to play in a major role in weaning the world off fossil, the technology is in its early stages and still isn’t cost competitive with other types of fuel.
The Korean company has also obtained exclusive rights to engineer, procure and build equipment for the Canadian facility that could be worth about $1.5 billion, it said in the statement.
Read More: There Won’t Be a Saudi Arabia of Green Hydrogen: David Fickling
SK said it will be partnering with Canadian firm World Energy GH2 Inc., te project’s main developer. The first phase will involve building an onshore wind-power plant, an electrolysis system and a facility that can make 360,000 tons of green ammonia per year. The goal is to
produce green hydrogen by March 2025, and green ammonia a year later.
(Updated with details of the project from the first paragraph.)
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