CONTENTS
PREFACE
As a preamble to our upcoming 2nd International Congress and Exhibition
“HYDROGEN LATIN AMERICA 2023”
(14‑15 June 2023, Santiago Chile), the Vostock Capital research team conducted a survey among the most prominent representatives of the Hydrogen industry in Latin America. I am pleased to share the results and analysis of this survey to offer you an up to date overview of the industry, its trends, challenges, prospects, technologies, and development opportunities in the region.
Vostock Capital has a strong commitment to help in the creation of opportunities for developing the Hydrogen industry in Latin America, bringing to our participants innovative communication channels, industry updates, and networking opportunities. I hope you will find this information useful to get a clearer perspective on the development
of the hydrogen industry, which is showing a steady growth in the region and interest from governments and private enterprises. We are confident that by participating in our networking and knowledge ‑sharing spaces, your company will benefit by identifying growth strategies, policies and innovations, while getting a clear vision on the industry status to decide the direction to take in order
to achieve your goals and take advantage of the opportunities ahead.
To learn more about the investment opportunities and development potential of the hydrogen industry in Latin America, government policies, ongoing and planned projects and new technologies available, we invite you to participate in the 2nd International Congress and Exhibition
“HYDROGEN LATIN AMERICA 2023” (14 15 June 2023, Santiago Chile),
We look forward to seeing you at the Congress!
Vostock Capital Team
While every effort has been made to verify the accuracy of this information, Vostock Capital will not accept any responsibility or liability for any person’s reliance or for the information, opinions or conclusions set out in the report. The findings do not necessarily reflect the views of Vostock Capital and its representatives.
2023 HYDROGEN FORECAST LATAM
Hydrogen is the most abundant element in Earth’s atmosphere. It can be utilized as fuel, an energy carrier, and industrial raw material to store and transport energy. When produced from renewable energy, such as solar or wind, green hydrogen can be essential in the race to net zero. From Namibia to Canada, and Chile to the EU, policymakers are looking at hydrogen more than ever before.
Everyone is looking for better ways to generate energy. Better technologies and futures that are less polluting, less dependent on third countries and friendlier to the environment. In the long term, green hydrogen could reach global sales of up to 700,000 million euros annually by 2050 (Bloomberg). Green hydrogen as a profitable, high-tech industry and as a supplier of zero emission energy is possible and is on track, it is in
full development of improving its productive concepts of its technologies and its long‑ term vision. Latin America is one of the world’s leading regions for renewable energy use today and one that can play a major role in the international push for low carbon hydrogen, a crucial element of a global net zero emissions future. Low carbon hydrogen industry is growing in Latin America, with many countries currently developing long term hydrogen strategies, including several gigawatt‑scale projects to export it beyond the region.
The World Bank has pointed to Latin America as having the potential to become one of the world’s most competitive regions in green hydrogen production by 2030. Although countries in the region are at different degrees of progress, there are already 13 operational projects in the region
and more than 70 in development.
The region has great potential to play a major role in the future low carbon hydrogen landscape, and in Latin America’s own clean energy transitions. The next decade will be crucial for the long‑term promise of low carbon hydrogen in Latin America, and much can be done today to develop new technologies and prepare the ground for their future scaling up. In the region, 11 countries have either published or are currently preparing national hydrogen strategies and roadmaps, and a pipeline of more than 25 low carbon hydrogen projects are at the early stages of development. Chile has the ambition to produce and export the world’s most competitive hydrogen from renewable electricity by 2030, and many countries in Latin America share the conditions that could make the region a global leader in low carbon hydrogen
2023 HYDROGEN FORECAST LATAM
production. Fossil fuel producing countries could also find opportunities to build on their existing production and infrastructure to produce low carbon hydrogen, for example by capturing and storing carbon emissions from existing hydrogen production facilities. In certain countries, such as Brazil, the availability of biogenic carbon from existing biofuels and bioelectricity production facilities could also help produce and export synthetic fuels, which require both carbon and hydrogen.
Existing uses of hydrogen will continue to dominate demand to 2030 in Latin America, with new uses in industry and transport representing less than 20% of total potential hydrogen demand. These existing uses could absorb growing shares of low‑carbon hydrogen, replacing emissions‑intensive alternatives and supporting the production of low carbon hydrogen in the near term,
without additional investment in end‑use infrastructure.
There are a large number of projects in different stages of development and that should start operating by 2030, mainly in Argentina, Chile, Brazil and Mexico. Among these, HyEx (2024) and Haru Oni (2022) stand out, two Chilean low carbon projects aimed, on the one hand, to replace imported ammonium for different applications in mining, which is the most representative sector of the country’s economy, especially copper mining, and, on the other, to the production of ecological fuel with a neutral effect on the environment.
FACTS AND FIGURES
Latin America is launching projects and green hydrogen, with countries looking to the fuel as a key part of their energy transition and decarbonization goals
Chile could produce up to 160 megatons per year of green hydrogen and become the leading low cost exporter by 2040, when the local market will be worth an estimated $33 B, including $24 B, in exports.
The energy sector accounts for 43% of all emissions in Latin America and the Caribbean, according to World Bank data. 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.
Colombia´s government has pledged to reduce Greenhouse Gas emissions by 51% by 2030 compared to 2010 levels.
Argentina is keen to develop a green hydrogen export hub for developed nations. The country could produce as much as 7.5 million tonnes of green hydrogen per year. According to the Ministry of Production, this could amount to US $15 B in hydrogen exports by 2050.
Chile aims to become a green hydrogen powerhouse, a new energy strategy is based on the country’s great wind and solar power potential, which would enable it to produce low cost hydrogen fuel. The Government has committed US $50 M in financing to encourage the development of pilot projects.
Colombia, Ecopetrol’s oil refinery in Cartagena, the company started a pilot test of green hydrogen production Uruguay’s government hopes to advance in the expansion of electric mobility and at the same time define the first green hydrogen pilot projects, today in high demand for freight transport. The goal is to start producing green hydrogen in 2025, according to its own roadmap.
Costa Rica aims to have a decarbonized economy by 2050. This commitment has been embodied in the Nationally Determined Contribution (NDC) published in 2020, which among its mitigation goals establishes that the country will develop a strategy for the development and promotion of green hydrogen.
FACTS AND FIGURES
Brazil published a resolution establishing the National Hydrogen Program (PNH2). Among its objectives, the policy seeks to decarbonize the economy; to value and encourage national technological development; and to develop a competitive hydrogen market.
Honduras, IDB has placed technical cooperation in its pipeline of possible financing to support the development of green hydrogen in Honduras and Paraguay, with initial steps being taken in Honduras. The funds would help evaluate the feasibility of producing, storing, transporting and using hydrogen for power generation and thermal applications. The Central American nation’s energy department and power regulator CREE also would benefit from capacity building related to the legal, regulatory and institutional framework.
The focus for Paraguay is to expand on existing work, targeting technology to improve productivity and resilience. Trinidad & Tobago’s government is moving toward the creation of a low carbon hydrogen industry with green (or blue) hydrogen being a carbon neutral alternative, which can be used as feedstock for petrochemical production.
Mexico created the hydrogen group Asociación Mexicana de Hidrógeno (AMH), the organization brings together more than 30 energy companies and includes energy trade groups and agencies from the states of Coahuila, Sonora, Tamaulipas, Hidalgo, Campeche, Puebla and Nuevo León.
Chile SNAPSHOT BY COUNTRY
Chile is an ideal location to develop green hydrogen. With a coastline that stretches 4,000 miles, it has access to water and an abundant and diverse renewable energy supply. The northern part of the country has the highest solar radiation in the world while southern Chile has some of the best conditions for wind energy. These conditions make it favorable for the country to be able to produce green hydrogen at some of the lowest rates compared to other countries.
Though 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 US $1.5 per kg by 2030.
The government also expects initial domestic demand for green hydrogen to be driven by the mining sector, which has been under pressure to reduce its carbon footprint.
The country has committed to carbon neutrality by 2050 and pledged to close or repurpose all of its 21 coal-fired power plants by 2040, and its energy matrix
is steadily becoming cleaner. Chile has drawn up a strategy that indicates that green hydrogen will help reduce the country’s greenhouse gas (GHG) emissions by 21%, and identifies the potential for hydrogen production and the possible markets and sectors that would use it.
Chile has almost 30 initiatives ranging from the application of hydrogen in public and cargo transport, to the production of methanol or “green” ammonia for the explosives industry.
The potential for green hydrogen to transform Chile’s renewable energy sector received an endorsement from the Government in Chile when the Ministry of Energy unveiled its national hydrogen strategy at the end of 2020. The strategy includes the policies and regulatory framework that should be enacted to encourage the development of the industry. The Ministry of Energy has formed a task force to make recommendations on how to improve the permitting process for new projects and is leading a government effort to improve the regulatory environment to promote foreign investment.
The Chilean hydrogen association, says green hydrogen “will be one of the spearheads” in Chile’s contribution to global warming mitigation measures. The fuel could contribute towards 24% of the country’s total carbon dioxide reductions by mid century.
SNAPSHOT BY COUNTRY
Chile
NEWS AND INITIATIVES
An RFI released by Chile’s economic development agency, CORFO, yielded an additional $12 B, in potential green hydrogen projects.
H2 Magallanes in Southern Chile, promoted by Paris based Total Eren, will include a port facility for export.
Haru Oni pilot project backed by Chilean firm HIF, the Italian Enel Green Power and German multinational Siemens Energy, will focus on renewables based fuel production in the Magallanes region. With an investment of US $51 M, the project is the largest of its kind in Latin America and one of the first worldwide. It will produce 350 tons of methanol per year and 130,000 liters of fuel per year by the end of 2022.
HyEx project led by the French energy company Engie and the Chilean Enaex, in Antofagasta province, received environmental approval to start their complementary projects involving green hydrogen production and green ammonia synthesis
Ministry of Energy unveiled its national hydrogen strategy at the end of 2020. The strategy includes the policies and regulatory framework that should be enacted to encourage the development of the industry. The Ministry projects that Chile could produce up to 160 megatons per year of green hydrogen and become the leading low cost exporter by 2040, when the local market will be worth an estimated US $33 B, including US $24 B in exports.
The Team Europe Initiative (TEI) for the development of Green Hydrogen (H2V) in Chile is a joint effort by the EU and its Member States to enhance cooperation with Chile in the development of its green hydrogen economy. The objective is to promote investment opportunities in the field of green hydrogen in Chile, by creating green jobs and generating business opportunities for Chilean and European companies, while meeting European import demand for green hydrogen.
Colombia SNAPSHOT BY COUNTRY
The Colombian Government is completely invested in decarbonizing the economy. The country is also assessing a domestic emissions trading system to include a carbon tax that will open the door to blue hydrogen technologies while green hydrogen reaches maturity. The H2 LAC Index 2022 shows that Colombia is the second country in the region with the greatest progress. The first is Chile which has a score of 65 out of 100 possible and Colombia follows with 57.
Colombia has the potential to achieve the fourth lowest price for green hydrogen globally by 2050, something in which it could only be surpassed by China, Chile and Morocco. The country advances in the challenge of decarbonizing its economy, for which it established a roadmap that estimates that by 2030, Greenhouse Gas (GHG) emissions will be reduced by 51% and carbon neutral in 2050.
Colombia’s Ministry of Mines and Energy unveiled a long term roadmap for clean hydrogen, outlining plans to install up to 3GW of electrolysis capacity by 2030 and envisaging large scale adoption of fuel cell vehicles.
In addition to publishing a roadmap for the sector in 2021, the country established tax incentives for green and “blue” hydrogen projects (those generated using fossil fuels but with emissions capture) with the aim of attracting new investments. It also sets a target of 50 kilotons of blue hydrogen capacity made from natural gas in the same period. Investments in the segment range from US $2.5 B to US $5.5 B, in the period, while between 10,000 and 15,000 jobs would be created.
Recently, the country passed its Energy Transition Law, which also highlights hydrogen, and has since seen the election of Gustavo Petro as its president, who has promised to wean the country off fossil fuels and may provide further impetus to green initiatives. Colombia’s Ministry of Mines and Energy revealed that it had received 58 requests for funding as part of its +H2 Colombia financing program.
In terms of developing a hydrogen market, Colombia presents two strategic advantages:
High availability of renewable energy sources to produce green hydrogen in areas like the Guajira. With the cost of renewable electricity tumbling, green hydrogen could be cost competitive as early as 2027, and, certainly before 2030.
Strong geographical location, as Colombia is the link between Central America and South America, boasting transportation, distribution and trade networks with five other countries. It is also located between two oceans, and has 10 port areas, which positions the country in an optimal location for maritime trade and exports.
-Significant oil reserves, natural gas, and coal available for the production of blue hydrogen with carbon capture usage and storage (CCUS) to mitigate associated emissions.
SNAPSHOT BY COUNTRY
Colombia
NEWS AND INITIATIVES
+H2 Colombia. This initiative, backed by the government’s Fenoge clean energy management fund, aims to fund feasibility studies of clean hydrogen projects in the country.
Colombia’s green hydrogen development jumped to second place on account of its new National Hydrogen Strategy and Roadmap. Published in 2021, the national strategy outlines the country’s hydrogen production routes, identifies domestic sources of demand and underscores the country’s export opportunity. Colombia’s hydrogen potential was also boosted by the government’s promotion of hydrogen tax breaks.
Colombia has two projects producing this energy at present and another 10 that are under development.
The Fund for Non-Conventional Energies and Efficient Energy Management (Fenoge) closed a call to finance more than US $6.5 B, to 10 projects and nine firms for the development of green and blue hydrogen works.
Colombia has more than ten projects under study, and the areas of application range from the construction of a green hydrogen hub to supply the steel industry, to the production of fuel from renewable energy surpluses, for mobility and industrial use.
A green hydrogen initiative is already in operation at Ecopetrol’s Cartagena oil refinery, powered by solar panels.
Natural gas supplier Promigas also has an active project in the country.
Uruguay SNAPSHOT BY COUNTRY
Uruguay generates over 98% of its electricity from renewable energy sources. The country is going through its “second energy transition” to decarbonize the rest of the energy consumption that still depends on fossils, particularly transportation.
The country 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. The intention is for green hydrogen to be a transitional, clean energy that has no environmental collateral.
The roadmap 2040 document includes the long term strategy of the country for the production and export of green hydrogen and its derivatives. 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. It also has very good conditions for the development of green hydrogen and derivatives, and it is projected that, by 2040, it will be able to invoice around US $2 B, in all this new industry, and potential to generate more than 30,000 quality jobs.
NEWS AND INITIATIVES
H2U pilot, an official strategy that can be applied both in heavy transport and in the production of ammonia and green fertilisers.
Tambor Green Hydrogen Hub, by the German company Enertrag, in cooperation with the Uruguayan SEG
Ingeniería, the project consists of a plant for the production of green hydrogen and derivatives such as methanol, in the department of Tacuarembó.
Ancap, the state‑owned oil and gas company of Uruguay, is getting ready to launch a series of offshore green hydrogen and wind tender rounds in 2023. The goal is to build a maritime hydrogen production hub driven by its large offshore wind potential calls for businesses with experience in offshore wind, hydrogen, or deepwater oil and gas.
The tender would initially offer 10 blocks of 500 km2 each, each block has the potential to install 2 3 GW of wind power and produce 320,000 t/y of green hydrogen.
SNAPSHOT BY COUNTRY
Argentina
Argentina is among the group of countries that have announced plans to become net zero by 2050. Argentina’s Nationally Determined Contribution (NDC), submitted in 2016, states that the country’s emissions will be limited to 483 Mt CO2eq by the year 2030, which would constitute an increase of roughly one third (in 2016, Argentina’s total emissions amounted to about 364 Mt CO2eq.26). With international support, a conditional target of 369 Mt CO2eq is envisaged.
It has potential in different sectors linked to natural resources and energy is one of them. Vaca Muerta and unconventional fuels are present and future, as is lithium in the north of the country with its announced investments and projections, renewable energies and hydrogen are added, either in its green or blue format.
The country offers some of the largest potentials for low costs hydrogen based on renewable electricity in the world. This is due to high average wind speeds and in addition high solar irradiation throughout large areas of the country. However, transport distances to major offtake regions such as Europe or Asia are large, and this will increase the landing costs for hydrogen.
Argentina’s hydrogen demand amounted to about 350 kt in 2019, with two thirds being pure hydrogen and the remaining third mixed hydrogen. Argentina is the only country in the region with sizeable hydrogen demand for all of the four main current applications of hydrogen in industry: oil refining and the production of ammonia, methanol and DRI.
Concerning green hydrogen, the country started to deploy increasing capacities of onshore wind and could built on this expertise. Although the country passed the National Hydrogen Promotion Law in 2006, regulation has not followed, which is why the H2 Argentina platform, is calling for progress on a regulatory framework to promote hydrogen investments in the long term.
Argentina currently uses about 330,000 tons of grey hydrogen per year. The largest part, more than 300,000 tons are used in the petrochemical industry for refineries to lower the sulfur content of diesel fuels. The chemical industry makes up the largest share of the remainder with more than 25,000 tons per year.
SNAPSHOT BY COUNTRY
Argentina
NEWS AND INITIATIVES
A clean hydrogen production plant already exists in Comodoro Rivadavia, in the Patagonian province of Chubut, run by the domestic company Hychico.
Authorities have announced the landing of the Pampas project in the province of Río Negro, a multi‑million dollar initiative focused on green hydrogen production on an industrial scale led in the Sierra Grande; Rio Negro area by Australian firm Fortescue Future Industries, with an investment of US $ 8.4 B.
The Argentine government signed a Memorandum of Understanding with the Australian energy company Fortalesco regarding the development of hydrogen production capacity in Rio Negro, Patagonia. In a pilot project, US$ 1.2 B shall be invested until 2024.
Costa Rica SNAPSHOT BY COUNTRY
Following the United Nations Climate Change Conference (COP26), Costa Rica officially presented its National Hydrogen Strategy, which will cover industrial processes with the aim of integrating all initiatives from the private sector, academics and all the actors involved. The program will have significant financing from the Inter American Development Bank (IDB) and Japan.
This document states that the mission is to produce H2V competitively, promoting its value chain and renewable energy projects in the country, while contributing to the reduction of greenhouse gas emissions through the activation of hydrogen demand in the transportation and industrial sectors.
The Costa Rican government foresees that, by 2023, there will be 200 to 750 MW of electrolysis capacity installed and under development, and that the levelized cost of green hydrogen (LCOH) will reach US $2 per kilogram.
Costa Rica could produce nearly six million tons of green hydrogen annually, equivalent to 8.5% of global demand.
NEWS AND INITIATIVES
The National Green Hydrogen Strategy of Costa Rica aims to deploy this energy vector in Costa Rica contributing to the goal of zero net emissions in 2050 set out in the update of the Nationally Determined Contribution (NDC) of Costa Rica. Taking into account the potential of green hydrogen, the National Decarbonization Plan 2018 2050 also includes as one of its objectives the promotion and development of hydrogen in the country.
SNAPSHOT BY COUNTRY
Brazil
The Brazilian Hydrogen Association (ABH2) indicates that the country has the potential to achieve a true industry for green hydrogen; and, with plenty of sunshine and good winds, the country’s Northeast Region opens its doors to the fuel of the future with 17 projects from international companies.
According to the Ministry of Mines and Energy, Brazil has great potential to stand out in this technology and be an energy exporter, since more than 80% of the electricity matrix comes from renewable sources.
Brazil can capture close to 6% of the world’s total green hydrogen supply through 2050, with the market gaining scale after 2030. Only 20% of the country’s green hydrogen facilities will be connected to the grid. The majority of these projects will be off grid and part of it will be supported by offshore wind, alongside other renewables, which will play a key role in the country’s future economy and long term position as a global energy exporter.
NEWS AND INITIATIVES
The first green hydrogen plant in Latin America is under construction in the port of Pecem. Brazil will produce what is called: blue hydrogen (Suape port) with an estimated investment of US $3.5 B for 1 GW (gigawatt) of capacity.
Brazilian chemical company Unigel is investing of US $120 M, in the development of the first industrialscale green hydrogen plant in Brazil. Incorporating electrolyzer technology by Thyssenkrupp Nucera. The plant is expected to come online in late 2023.
SNAPSHOT BY COUNTRY
Paraguay
Paraguay could become a logistics hub for green hydrogen, the country has participated in the first research on the production potential of green hydrogen and its applications. The work points a tempting path to energize South America with sustainable methods, through renewable energies, in which Paraguay would play a relevant role.
According to 2021 data, energy demand in transportation, industry and homes throughout the country could be replaced by 100% national green hydrogen. This would guarantee energy independence and a lower degree of air pollution, since the residues in the production of green H2 are oxygen (O2) and water (H2O).
ATOME Energy announced further developments in its mobility project in Paraguay, enabling the country to become the leader on the continent in the fast growing green hydrogen economy.
In addition to the already paid deposit of US $300,000, no further payments are due regarding the electrolyzer until the first quarter of 2024, at which point CPH agreed to upgrade the electrolyzer at its own cost with the latest technology now planned for its 2023 series models. By 2023, ATOME intends to introduce zero emission hydrogen passenger vehicles progressively.
NEWS AND INITIATIVES
ATOME Energy doubles size of first Paraguay green ammonia plant, with FID in second quarter of 2023. Recently the company completed the purchase of the 30 hectare site earmarked for the Villeta green hydrogen project in Paraguay.
SNAPSHOT BY COUNTRY
Bolivia
Bolivia’s state power company Ende has declared void the second call to carry out green hydrogen studies. The process, launched in November, fell through because offers from the two bidders – Ghenova Ingeniería and Tecnatom – did not fulfill technical requirements, procurement information shows.
The consultancy work will support development of a green hydrogen pilot project at the 5MW Cobija solar park, which is operated by Ende Guaracachi. The alternative fuel would be used at the Bahía thermal plant in Cobija, which is the capital of Pando department in the northwest of the country.
NEWS AND INITIATIVES
A new agreement between H2 Bolivia and the Government of Oruro will see a 500,000 tonne per year green ammonia plant built in the country. Taking advantage of the “unmatched solar irradiance” in the Oruro region, a solar farm will power 490 MW of electrolysers at the plant, with enough land acquired to expand the project well beyond the initial 500,000 tonnes per year target. FID is due in 18 months, with construction to begin by 2024. The project will target ammonia export markets to begin with, but there is a chance it could help replace Bolivian imports of ammonia (and a significant fertiliser market in South America). Bolivia’s only world scale ammonia and urea plant has been beset by technical difficulties and lossmaking operations since it was commissioned a few years ago.
SNAPSHOT BY COUNTRY
PeruH2 Perú, the Peruvian Hydrogen Association, created to promote the development of green hydrogen in the country as a key part of the decarbonization of the economy, presented to the Congress Authorities and the National Executive Power a proposal for a roadmap of the green hydrogen in Peru.
Through its proposals, H2 Peru seeks to support the Peruvian State in this green hydrogen race, which is to build the national strategy, develop the operational framework and encourage the development of pilots and projects, and promote the deployment of energy of the future in our country.
The energy and mines ministry (Minem) would be tasked with leading a multisector group in the drafting of a national green hydrogen strategy which would include a technical regulatory framework, incentive mechanisms, a financing structure for pilot projects and PPP guidelines, among other aspects.
An energy transition study prepared by Deloitte highlights that the country could become an exporter of green hydrogen within the decade.
Among the most ambitious goals, large scale projects are projected to be deployed by 2050, with more than 12 GW of installed electrolyzer capacity, which could reach production costs close to US $1 per kilogram of H2V.
In addition to the Cachimayo industrial plant in Peru, which has been operating since 1965 and has a capacity of 25MW – being, at the moment, one of the most important globally – there are other initiatives that have begun to operate more recently as part of this transformation process towards low carbon hydrogen. Cerro Pabellón and H2V Las Tórtolas in Chile (with capacities of 50kW and 2 kg of hydrogen per day respectively), which began operations in 2017 and 2021 respectively; Hychico in Argentine Patagonia (0.55 MW), which has been operating since 2009; and the Sustainable Transport Ecosystem in Costa Rica, which seeks to electrify transport through the use of hydrogen from renewable sources and has been operating since 2017.
NEWS AND INITIATIVES
Mmex Resources Corporation, an American company dedicated to the development of resources such as hydrocarbon exploitation through renewable energy projects, announced that it will carry out Peru’s first green hydrogen project. Located on the southern coast of the country, the first pilot is being prepared to produce up to 55 tons of hydrogen per day, requiring 160 MW of renewable capacity.
SNAPSHOT BY COUNTRY
Trinidad and Tobago
Trinidad and Tobago has committed to achieving 30 per cent renewable energy generation by 2030, and reducing carbon emissions in its power generation, transport and industry sectors by 15 per cent, under the Paris Agreement.
Trinidad and Tobago’s Ministry of Energy and Energy Industries (MEEI) has launched a roadmap to develop a green hydrogen market in the Caribbean island nation. The roadmap, which was developed by the country’s National Energy Corporation with support from the Inter American Development Bank (IDB), states that many of the building blocks for a regional production, storage and trading hub are already in place to give the nation a head start in the market. The roadmap identifies offshore wind technologies as the best renewable energy source available in Trinidad and Tobago in the production of green hydrogen. The immediate next steps consist of a two track approach of securing funding for the programme and launching local demonstration projects. To take the programme forward the Ministry is working on a draft Hydrogen Policy that will support the findings of the roadmap study.
NEWS AND INITIATIVES
The National Gas Company of Trinidad and Tobago Ltd (NGC) and NewGen Energy (NewGen), a hydrogen start up, have signed a non‑binding Letter of Intent (LOI) to collaborate on the construction of NewGen’s hydrogen production plant. When completed, the more than US $200 M, NewGen plant will be the world’s largest clean hydrogen production facility of its kind, using a smart combination of solar energy and energy efficiency. It will generate hydrogen to meet 20% of the hydrogen needs of an existing global ammonia plant at the Point Lisas petrochemical center in Trinidad.
National Energy has partnered with the Inter‑American Development Bank (IDB) and KBR in 2021/2022 to complete a feasibility study on the establishment of a green hydrogen industry in Trinidad and Tobago.
SNAPSHOT BY COUNTRY
Mexico
Mexico is working to develop its nascent hydrogen industry. Currently, there are organizations interested in developing and growing the green hydrogen industry in Mexico. For example, the 23 year old Sociedad Mexicana del Hidrógeno (SMH) has been responsible for promoting research, development, and innovation of hydrogen technologies.
Mexico has committed to reduce greenhouse gas emissions gradually by 50% until 2050, in accordance with the Climate Change Law; while in the Energy Transition Law the obligation is to guarantee access for all to affordable, safe, sustainable and modern energy. Therefore, in the Program for the Development of the National Electric System 2022 2036, the inclusion of green hydrogen generation from 2028 stands out.
Mexico shares many of the characteristics that make Argentina, Brazil and Chile good candidates for competitive production of hydrogen from renewable electricity. The Federal Electricity Commission (CFE) expects its green hydrogen plant to start producing clean fuel in 2023. Green hydrogen can be generated
in Mexico because of the highly potential of some states and its large amounts of resources for renewable energy, while having energy infrastructure and demand, adherence to state sustainable objectives, strategic logistics position and public sector allies. For example, Puebla, Tamaulipas, and Nuevo León.
Green hydrogen production could start in 2025, increasing to around 230,000 tons in 2030 and 2.7 million tons in 2050. In order to supply this, Mexico would need 79 GW of new renewable capacity and 51 GW of electrolysis by 2050. The total amount of investment would be in the range of US $59 B in 2025 2050, according to AMH. The demand for green hydrogen in Mexico for large industries, such as cement and mining companies, would create a market of US $700 M per year by 2050, according to the document from the German agency.
NEWS AND INITIATIVES
SMH has been working on the National Hydrogen Plan for Mexico, which seeks to identify the national skills and potential to approach the best opportunities in the current situation of Mexico.
The country has four projects in Guanajuato, Durango, Baja California and Sonora, which represent an investment of approximately US $ 1.5 B. The natural resources together with its population, territory and industrial plant make Mexico have the potential to become an important producer of hydrogen and even project itself as an exporter. The country already has a grey hydrogen market, which represents 0.3% of the global market.
HIGHLIGHTED PROJECTS
BRAZIL
TRINIDAD & TOBAGO
BASE ONE Location: Pecém Concessionaire: Enegix Energy Capex: US$ 5.4 B
Base One calls for a green hydrogen production plant to be built at the port of Pecém in the northeastern state of Ceará. The facility would produce green hydrogen from 3.4GW of baseload renewable energy. Operator Enegix expects the facility to be fully operational in 2025.
CHILE
NEWGEN Owners: Yara, NGC
Norwegian fertilizer company Yara International is co developing the NewGen hydrogen project in Trinidad and Tobago in partnership with the National Gas Company of Trinidad and Tobago (NGC).
The complex, which aims to produce ammonia, is expected to comprise 170MW to 185MW of electrolysis capacity. Construction work is expected to be completed in 2024. Yara already co‑owns two ammonia plants, known as Tringen I and II, in Trinidad and Tobago.
QUINTERO BAY Location: Valparaíso Owner: GNL Quintero Capex: US$ 30 M
The project entails the construction and operation of an electrolysis plant for the generation of green hydrogen from water and electricity generated through renewable sources. The project, which will occupy an area of 0.69ha, will be located in Quintero bay, Valparaiso region.
HIGHLIGHTED PROJECTS
URUGUAY COLOMBIA ARGENTINA
CARTAGENA REFINERY
PILOT Location: Cartagena
Owner: Ecopetrol
The pilot consists of the installation of a 50kW proton exchange membrane (PEM) electrolyzer and 270 solar panels. It uses industrial water from the refinery to produce 20kg of high purity green hydrogen daily.
TAMBOR HUB Location: Tacuarembó, Uruguay
Owner: Enertrag
In May 2022, German renewables company Enertrag announced plans to produce large amounts of hydrogen and its derivatives at Tacuarembó in northern Uruguay. The first phase of this undertaking will involve the construction of 350MW of wind and solar farms, an on site electrolyzer and conversion facilities. The goal is to produce around 15,000t/y of green hydrogen and convert it to e methanol.
FORTESCUE
HYDROGEN FACILITY
Location: Rio Negro, Argentina
Owner:
Fortescue Future Industries
Capex: US$ 8.4 B
Australian green energy company Fortescue Future Industries will invest up to US$8.4bn to produce green hydrogen in Argentina. Slated for the northern Patagonian province of Rio Negro, the project includes an initial US$1.2 B pilot stage from which output would gradually be scaled up to meet demand from industries and the transport segment.
HIGHLIGHTED PROJECTS
MEXICO CHILE PARAGUAY
HARU ONI Location: Punta Arenas, Chile
Owner:
HIF Capex: US$ 51 M
The project envisages the construction and operation of a chemical plant for the production of methanol and gasoline from carbon dioxide and hydrogen. The initiative also comprises a 3.4MW wind turbine and would be connected to the local grid via an 8.8km medium voltage power transmission line.
NEPTUNO Location: San Luis Potosí Owner: Neptuno Solar Capex: US$ 191 M
The project consists of the construction of a photovoltaic plant with 484,680 solar panels and a green hydrogen generation plant in an area of 326ha. The project will be located in Villa de Arriaga, San Luis Potosí state.
NEOGREEN Location: Paraguay Owner:
Neogreen Hydrogen Corporation Capex: US$ 500 M
The project involves the installation of an industrial plant that would produce green hydrogen from renewable energy in Paraguay. In the first phase, the developer plans to supply green hydrogen exclusively to industrial users. In the second, the company would build a larger plant to serve other domestic consumers and export markets.
SURVEY RESULTS
In order to keep industry members updated on the current situation and upcoming development opportunities for the Hydrogen industry in Latin America, Vostock Capital conducted the Hydrogen Latin America survey, with input from more than 200 participants, all directly involved with the industry in the region, including C suite, and senior executives from project developers, technology and service providers, regulatory bodies, academia, consultants and independent experts. We take this opportunity to thank all those who provided valuable input to help us compile an overview of the Hydrogen industry in Latin America.
As part of our constant effort to provide though understanding of the most relevant aspects of the industry, and the trends that will determine the future of the hydrogen developments in the region, this survey focused on three main objectives: first, to determine the most relevant projects and their current status; second, to understand the challenges faced by the industry in the global energy transition; and finally, to obtain an overview of the most promising applications for the hydrogen industry in the region that will boost project development and the evolution of innovative technology and services.
We thank all participants for taking the time to offer their valuable insights and opinions on the development of the Hydrogen industry in Latin America. Among the participating companies: AES, Air Liquide, Air Products, ASOCIACIÓN ESPAÑOLA DEL HIDRÓGENO Empresarios Agrupados, Bechtel, CAP, EPM, ECOPETROL, Enel, Engie, Hinicio, Iberdrola, ITEM Power, Linde,
Messer Group GmbH, METROGAS, Multinsa, Naturgas, Promigas, Reliance Industries Ltd, Siemens, Technip Energies, TGI, THYSSENKROUPP LAMERICA, Worley, WSP, Yara.
PROFILE OF PARTICIPATING COMPANIES
SURVEY RESULTS
The regulatory issue is currently the most concerning aspect for the development of the industry in the region, since most countries are still creating the roadmap for it, and regulation is still unclear.
Policy makers face the challenge of developing a tailored and carefully timed mix of policy and regulatory measures guided by priorities to reap the benefits of hydrogen production
Each country has a different set of opportunities and challenges in relation to existing hydrogen demand and supply, potential low carbon production routes and demand sectors, existing industrial value chains, infrastructure and ecosystems of market players, technological capabilities and financial services, to name a few crucial aspects.
Attracting investors takes second place in the list of challenges, which is linked to both the need for regulation and the availability of more affordable technologies, and a clear vision for the role of hydrogen in the national clean energy transition, as well as the country’s position in the future global hydrogen landscape and participation of foreign investment by country.
Technological development takes third place, both in terms of safety standards and hydrogen application, especially when these take place close to the consume. Amongst those technological challenges we can find carbon capture and storage, affordable generation, supply chain, and cost competitiveness. Low carbon hydrogen deployment depends on many technologies that are still under development, and considerable cost reductions will be needed to enable it to reduce global emissions in applications that may not be suitable for director electrification
Among others, our respondents mentioned: Processing of permits, LATAM customers, Economic viability, Accurate market information, supply of technology and equipment, production/storage/transportation chain, lack of information and knowledge in the energy sector, both private and governmental, about the generation, transportation and practical use of hydrogen.
What are the key challenges affecting your business in the field of hydrogen processing in Latin America Region?
SURVEY RESULTS
Which country in the region is the most promising in terms of investing in hydrogen industry:
Chile takes the lead as a promising country for development of hydrogen industry, both because of it’s natural resources as well as a clearer legal framework. The country is spearheading the region in the energy transition. Colombia takes second place, closely followed by Brazil, both countries are developing the industry as well as the regulatory roadmap to further develop the industry. Argentina and Mexico follow closely in the list of promising countries in the region.
SURVEY RESULTS
AMONGST THE MOST MENTIONED TECHNOLOGIES ARE THE ONES BELOW, IN ALPHABETICAL ORDER.
Which hydrogen production technologies would have the greatest applicability in Latin America?
Alkaline electrolysis
Ammonia Conversion
Bioenergy
Biogas reforming
Capture and storage
Coal gasification
Conventional electrolysis
Electrolysis from NCRE
Electrolysis powered by renewable energy
Electrolytic Plants
Electrolyzers for the production of H2V
Electrolyzers with non conventional renewable sources
Electrolysis of seawater for production of sodium hypochlorite
Fermentation
Green Hydrogen
H2 Green for Mobility (Alkaline and PEM)
High and low temperature electrolysis
Liquid storage
Pyrolysis in microwave induced plasma reactor
Photoelectrolysis
Plasma torches
Pressurized storage
Renewables
Replacement of hydrocarbons
Solar
Steel tanks or cylinders
SURVEY RESULTS
Which global and regional trends do you think may significantly affect the development of the Hydrogen industry in Latin America over the next 5 years?
We have organized the most frequent answers, by category.
FINANCIAL
Availability of financial resources
Cost and safety (sustainability and process sustainability)
Decrease in CAPEX of hydrogen plants
Decreasing technology prices
Definition of financial/fiscal support for the launching of this industry, either for the own production of green hydrogen or through subsidies in the electricity grid.
Development of local renewable hydrogen consumption together with macro projects to export H2 as an energy vector and green ammonia to other regions.
Economic recession
Governmental clarity to legislatively support the development of this type of projects.
Greater investment in the region
Production costs that may increase due to inflation
Rising fuel prices
The increase in the price of NG
ENVIRONMENTAL
Availability of resources for H2 projects
Climate change
Decarbonization
Energy transition
Hydrogen conversion technology
Increased environmental awareness
Natural gas presence in some countries
Renewable Energy breakthrough
Water shortage
CONFLICT, POLITICAL INSTABILITY
Crisis of local governments.
Currency Devaluation
European consumption
Geopolitics
Government stability
Hydrogen Intensive Use Regulations
Lack of government support
Legal and regulatory framework, influence of communities close to projects
Reduction of corruption
EVENTS CALENDAR
2nd International Congress and Exhibition
14–15 June
2023, Santiago, Chile
hydrogenlatinamerica.com
4th International Congress and Exhibition
5–6 July
2023, Buenos Aires, Argentina
www.lithiumcongress.com
5th International Congress and Exhibition
26–27 July
2023, Bogota, Colombia
colombiaoilandgas.co
4th International Congress and Exhibition
4–5 October
2023, Santiago, Chile
www.mininglatamcongress.com
6th International Conference and Exhibition
26–27 March
2024, Santiago, Chile
www.desalinationlatinamerica.com
International Forum and Exhibition
14–15 February
2024, Tashkent, Uzbekistán
www.thermalpowercentralasia.com
International Congress and Exhibition
23–24 May
2023, Astana, Kazakhstan
www.miningkaz.com
2nd International Congress and Exhibition
12–13 December
2023, Uzbekistan
www.mininguz.com
7th Annual International Congress and Exhibition
21–22 June
2023, Astana, Kazakhstan
www.hydropowercongress.com
6th Annual International Summit and Exhibition
25–26 October
2023, Istanbul, Türkiye
www.hydropowerbalkans.com
2nd International Congress and Exhibition
8–9 November
2023, Uzbekistan
www.syngasuz.com
2024 DOWNSTREAM
2nd International Congress and Exhibition
15–16 November
2023, Tashkent, Uzbekistan
www.pharmauz.com
OIL AND GAS
2nd International Congress and Exhibition
13–14 December
2023, Istanbul, Türkiye
www.oilandgasturkey.com
10th Annual Conference and Exhibition
March
2024, Uzbekistan
www.oilandgasrefining.ru