South Korea has proposed a multibillion-dollar hydrogen transportation investment package to Canada, linking the initiative to its bid for the country’s next-generation submarine program in a move that underscores the growing use of industrial partnerships to support major defense contracts.
The proposal, known as “Project Beaver,” would invest approximately $2.3 billion in Canada’s hydrogen economy while helping establish a domestic supply chain for hydrogen-powered commercial vehicles. The plan emerged as South Korean shipbuilder Hanwha Ocean competes with Germany’s Thyssenkrupp Marine Systems for a submarine program that could rank among Canada’s largest military procurement projects.
Details of the initiative were disclosed during an interview with CTV on September 3 local time by Kang Hoon-sik, chief of staff to South Korean President Lee Jae Myung. According to Kang, the investment package would be activated if Hanwha Ocean secures the submarine contract.
The project is centered on deploying hydrogen-vehicle technology developed by Hyundai Motor Group, which is participating in the submarine bid effort alongside Hanwha Ocean.
Under the proposal, the first phase would begin in 2030 with the construction of a liquid-hydrogen production facility in British Columbia. The plan also calls for 32 hydrogen refueling stations across British Columbia and Alberta, as well as a hydrogen-vehicle manufacturing plant in Ontario.
A second phase would significantly expand the network after 2035, adding more than 160 additional hydrogen refueling stations nationwide.
Kang said the initiative would be designed around Canadian raw materials and locally sourced components while leveraging South Korean manufacturing and technology expertise.
“If we win the submarine contract, Hyundai Motor will help Canada build its hydrogen ecosystem,” Kang said.
He added that Project Beaver could generate roughly 9,000 jobs while creating the foundation for a domestic hydrogen-truck industry.
The proposal reflects South Korea’s view that hydrogen-powered commercial vehicles may offer a more attractive long-term opportunity than passenger electric vehicles in North America. Kang cited mounting competitive pressures and shifting industrial policies as key factors behind that strategy.
Referring to Stellantis’ decision to move production of a Jeep model from Ontario to Illinois, Kang argued that automakers face increasing incentives to expand manufacturing operations in the United States.
“The United States has made clear that companies may find greater advantages by locating production there,” he said, adding that South Korean manufacturers face similar pressures.
Kang also pointed to intensifying competition from Chinese automakers, arguing that competing directly with China in the passenger EV market has become increasingly challenging for global rivals.
The proposal highlights how governments and corporations are increasingly packaging infrastructure investment, advanced manufacturing and technology cooperation alongside defense exports as countries compete for large-scale procurement contracts. For South Korea, the Canadian submarine competition represents not only a defense opportunity but also a chance to expand its industrial footprint in North America through emerging energy technologies.
