The decarbonization of the planet is one of the goals that countries around the world have set for themselves by 2050. Green hydrogen is positioned as an essential tool to replace fossil fuels, reduce CO2 emissions and therefore contribute significantly to facing climate change.
Green hydrogen is the production of hydrogen through wind and solar energy using electrolysis (separation of hydrogen from oxygen by electric current). Importantly, green hydrogen does not emit polluting gases either during combustion or during the production process.
Clean hydrogen has a lot of potential in Latin America, a region where a high portion of electricity is already generated by renewable resources. As it is difficult to implement processes to reduce emissions, this can have a major impact in sectors that use large amounts of hydrogen, such as the chemical industry for the production of ammonia, fuel for heavy load vehicles, maritime transport, refineries, the steel industry and methane production.
With the global rise of green hydrogen, public policies, incentives and regulatory framework related to green hydrogen are being developed by Latin American government bodies.
Argentina
In September 2023, Argentina presented its National Strategy for the Development of the Hydrogen Economy (ENH), a roadmap outlining the plan to integrate hydrogen as a key component in the energy transition until 2050. This includes the production of various types of hydrogen (green from renewable energy, pink from nuclear energy, and blue from natural gas) through the carbon capture in the fossil fuels.
The ENH sets the goal of reaching a production capacity of five million tons of hydrogen per year by 2050, with 80 percent of production destined for export and 20 percent for the domestic market. With these figures, Argentina would have a five percent share of the world market.
The country’s main initiative, the Pampas Project – planned by Australia FFI, with an investment of US$8.4 billion – will be built in the windy Patagonia region, and aims to produce 2.2 million tons of green hydrogen a year for export by 2030.
Brazil
Brazil’s Energy Expansion plan for 2030 projects a technical potential for hydrogen production of 1.8 gigatons per year. The greatest potential is in the offshore wind, source of 350 million tons of green hydrogen a year, biomass could add 50.5 million tons, onshore wind, solar, and hydropower could contribute another 18.1 million. Brazil expects to invest R$200 million per year in low-carbon hydrogen research and development.
In March 2023, Brazil and Germany signed an agreement that will support up to ten projects by small and medium-sized enterprises, startups, and research and technology organizations in both countries. The aim is to accelerate technology routes and connect green hydrogen producers with buyers. Brazil already has R$30 billion worth of projects, most of them are located in existing port facilities along the Brazilian coast for easy transport. The state of Ceará has already signed more than 30 pacts with companies in Brazil, France, Portugal, Spain, Australia, the United States and Italy that are interested in the production of green hydrogen.
Spanish solar developer Solatio Energía will invest R$20 billion in two green hydrogen and ammonia projects in the northeastern state of Piauí and will be able to generate two million tons of ammonia for national and international markets.
Chile
Taking advantage of the immense renewable energy resources in the Atacama Desert and the constant winds in Patagonia, along with ample lithium reserves, Chile’s ambition is to generate the world’s most cost-effective renewable hydrogen. Chile aims to have five GW of electrolysis capacity in operation or underway by 2025. By the end of the decade, its green hydrogen production capacity is expected to reach 25 GW.
The Inter-American Development Bank (IDB) granted a $400 million loan in June 2023 to finance new green hydrogen projects, support domestic demand, skills development, research and technological innovation. One of the main projects, developed by German subsidiary RWE Renewables, is to install around 835 MW of electrolysis capacity in Magallanes, in Chile’s southernmost region. Known as Vientos Magallanicos or the Winds of Magallanes, the project is also expected to produce about 475,000 tons of ammonia per year for export to international markets. The German company Eternal Power is exploring options for the construction of large-scale green hydrogen production plants for export to Europe.
Colombia
Ecopetrol, S.A., the government-owned oil company, is pursuing the development of low-carbon hydrogen with the goal of producing one million tons annually by 2040. In the next three years, Ecopetrol will allocate around COP $4.1 trillion for the production of 900 MW of renewable energy, the generation of more than 50,000 tons of low-carbon hydrogen, the reduction of almost 400,000 tons in carbon dioxide emissions, and advances in research related to carbon capture.
In April 2023, U.K.-based clean project investor PASH Global and renewable energy investor ERIH Holdings signed an agreement to create a joint venture and develop green hydrogen and ammonia production projects totaling five GW. Germany pledged €200 million in a memorandum of understanding signed between Colombia’s Ministry of Mines and Energy and Fraunhofer-Gesellschaft to analyze the production of hydrogen, ammonia, methanol and green fertilizers.
Mexico
Currently, Mexico does not have a national strategy for the development of the hydrogen industry. The consulting firm PwC projects that the demand for green hydrogen in Mexico will total about 230,000 tons in 2030 and increase to 2.7 million tons in 2050.
German green hydrogen project developer Hy2gen AG has sealed an agreement with the Mexican state of Campeche to carry out further feasibility studies for a green ammonia plant, with 200 MW of electrolysis capacity, the electrolyser will be powered by a 415 MW wind farm and a 230 MW solar park, and a production of 180,000 tons of renewable ammonia per year.
Cement manufacturer Cemex plans to implement hydrogen injection technology in four of its plants in Mexico in a bid to boost the use of alternative fuels and reduce carbon dioxide emissions in cement production by more than 47 percent by the end of this decade.
Panama
In July 2023, Panama’s government adopted the national green hydrogen strategy, which aims to position Panama as a global hub for the production of hydrogen and its derivatives, taking advantage of its strategic geographic location and infrastructure to provide renewable energy to the maritime, aviation and land transport sectors. The country is a key transit point for maritime trade through the Panama Canal and a prominent air traffic hub in Central America. Overall, the growth of the aviation and shipping industry is expected to drive the demand for green hydrogen in Panama.
Uruguay
Uruguay set a target of two GW of electrolysis capacity for 2026 to 2030 and 10 GW of capacity to produce hydrogen and its derivatives in 2030. After the initial phase, the hydrogen will be used mainly by converted forestry trucks and to introduce hydrogen into the existing natural gas network in the city of Paysandú, in western Uruguay. In addition, offshore green hydrogen bidding will award 10 offshore sites in Uruguay to companies that will develop offshore power generation and green hydrogen production projects.
New Paradigm
However, green hydrogen also faces challenges in the short and medium term. The main one is to ensure that the projects that involve it are economically viable. So far, few long-term deals have been finalized with only 10 percent of the $320 billion invested having reached the final investment decision stage.
With a focus on 2030 and beyond, green hydrogen will be crucial in the global transition to more sustainable energy sources. It’s a fact that the expansion of green hydrogen is growing by leaps and bounds around the world. More than 1,000 green hydrogen projects have been announced globally, many of them already completed or in the development stage. Its expansion is the representation of a global effort toward cleaner energy sources. Green hydrogen is the main protagonist of this new paradigm.
Ultimately, it will be necessary for humanity to recognize the value of green hydrogen in the fight against climate change, in order to generate enough demand to justify the development of the industry.
Sources:
2nd Annual Conference World Hydrogen Latin America. Santiago de Chile, December 2023.
Victoria Dannemann, Latin America’s commitment to Green Hydrogen. Nature and Environment. January 25, 2023.
Spanish Hydrogen Association. www.AeH2.org.
The Future of Energy is Here: Green Hydrogen. January 18, 2024. www.ecoticias.com.
Angela Levy was born in Colombia and became a U.S. citizen in 2012. She is now a dual citizen of the two countries. She holds two master’s degrees, an MBA and another in accounting. Levy worked as a production engineer in Colombia before moving to the U.S., where she worked in the finance and accounting group at Halliburton for a decade. She later worked with special needs children for five years. Levy now spends her time traveling the western U.S. and recently returned from an extended visit to Colombia.
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Angela Levyhttps://energiesmagazine.com/author/angela-levy/
Carlos Arturo Toro is a native of Colombia. An economist, he holds a master’s degree in finance. For more than 15 years, he was dedicated to the banking sector, as a credit analyst for Banco Popular de Colombia and as the national director of credit of various financial institutions. For several years after finishing his career in the banking sector, Toro worked as a tropical glacier guide and, periodically, as a volunteer park ranger for the Colombian National Park.
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Carlos Arturo Torohttps://energiesmagazine.com/author/carlos-arturo-toro/
