Latin American countries are taking their first steps into the burgeoning global green hydrogen industry, seeking to take advantage of their high potential in renewable energies and drive their efforts towards carbon neutrality by mid-century.
The energy sector accounts for 43 % of all emissions in Latin America and the Caribbean. The transformation of energy mixes is therefore an unavoidable reality, if the region’s countries are to meet their obligations of the Paris Agreement and attempts to limit global warming to 1.5C above pre-industrial levels.
Regulating green hydrogen
For some countries, green hydrogen presents a promising opportunity to export the fuel, while for others, the focus is on using it for local production of by-products, whether for the development of synthetic fuels, clean fertilisers, powering electric vehicles, and a host of other industrial and domestic uses.
The fuel could contribute towards 24 % of the country’s total carbon dioxide reductions by mid-century.
Chile currently derives 68 % of its energy from fossil fuels, the nation leads the way on green hydrogen in Latin America, having launched a national strategy for the fuel in 2020, which set out specific goals such as being the country with the cheapest green hydrogen on the planet, at less than U$S1.5 per kg by 2030.
Along with Chile, Colombia is another country making progress in its hydrogen development. In addition to publishing a roadmap for the sector in 2021, the country established tax incentives for green and “blue” hydrogen projects with the aim of attracting new investments.
Colombia hopes to reduce its emissions by 51 % by 2030. Last year, the country passed its Energy Transition Law, which also highlights hydrogen.
Uruguay, meanwhile, has featured green hydrogen in its Long-Term Climate Strategy and launched a call for pilot projects that is still underway. Although these initiatives are focused on domestic applications, authorities expect them to serve as a “learning curve” to help train technicians in the world of hydrogen.
Uruguay’s goal is to start producing green hydrogen in 2025, according to its own roadmap. The country has “comparative advantages” that will allow it to position itself as a “supplier of green alternative fuels” to new markets, such as its already developed renewable energy sector. Uruguay generates over 98 % of its electricity from renewable energy sources.
Meanwhile in Argentina, although the country passed the National Hydrogen Promotion Law in 2006, regulation never followed.
Hydrogen projects in Latin America
Latin America has the potential to become one of the world’s most competitive regions in green hydrogen production by 2030. Although they are at different degrees of progress, there are already 13 operational projects in the region and more than 70 in development.
Source: Diálogo Chino