Toronto, Aug 23 (IANS): German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau will attend an economic conference in Toronto on Tuesday, the second day of the German leader's inaugural trip to Canada.

The two heads of government will then travel to Newfoundland, where an agreement on stronger cooperation between the two countries in the production and transport of hydrogen is to be signed in the remote town of Stephenville, reports dpa news agency.

Scholz will be accompanied on his trip by his deputy, Economy Minister Robert Habeck.

Newfoundland is considered a favourable location for the production of renewable hydrogen.

The region is very windy and sparsely populated.

The use of hydrogen does not produce greenhouse gases.

To produce it, water has to be split into hydrogen and oxygen, an electrolysis that is only climate-friendly if sustainably produced energy is used.

In principle, hydrogen can serve as a basis for fuels to replace coal, oil and natural gas in industry and transport.

Because its production is very energy-intensive, hydrogen is currently still significantly more expensive than fossil fuels.