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.