A review of the future of hydrogen in Latin America

The potential for Latin America to become a major player in the clean hydrogen market is significant, but there are obstacles to overcome to achieve this goal. Overall, while Latin America has potential for clean hydrogen production, challenges remain in terms of investment, regulation and market development.

The potential for clean hydrogen in Latin America is underpinned by a few key factors, including:

  • The region boasts an abundance of renewable resources: Latin America boasts a wealth of hydropower and other renewable energy sources that can be harnessed to produce clean hydrogen.
  • Global demand for clean hydrogen is growing rapidly: The global market is seeking alternatives to fossil fuels, making clean hydrogen a highly sought-after commodity.
  • The potential for economic opportunity is significant: Clean hydrogen production has the potential to be a significant economic driver for the region.

However, there are challenges to hydrogen production:

  • Investment: Despite government support and funding from multilateral lenders, further investment is required to increase clean hydrogen production.
  • Lack of customers: Local companies are reluctant to sign long-term contracts, which is essential to secure financing and stimulate production.
  • Energy inputs: Critics argue that clean hydrogen production still requires significant energy inputs.

It is logical to conclude that, in the absence of a domestic market, the necessity for export contracts is paramount. The key factors to consider are: 1) the potential for European and Asian demand for clean hydrogen to increase, 2) the possibility of stimulating production by signing contracts with these countries, and 3) the impact of the wider market. The development of green hydrogen in Latin America is facing challenges due to a lack of customers and the need for renewable energy infrastructure. To overcome this, it is essential to explore ways to engage potential customers with global connections. Local industries, such as shipping, airlines and heavy industries, could be key consumers of green hydrogen.



Of all the variables, the renewable energy supply is of primary importance. The cost of green hydrogen is influenced by the availability of affordable and reliable renewable energy sources, as well as significant social challenges faced by surrounding communities, particularly indigenous ones. It is important to note that clean hydrogen currently has a higher cost than grey hydrogen produced from fossil fuels. One strategy for reducing costs is the reuse of existing infrastructure and the construction of shared facilities, which could be particularly beneficial in the production of clean hydrogen.

To date, multilateral lenders, governments and funds have committed $6.1 billion for renewable energy investments in Latin America, including clean hydrogen. Industry estimates indicate that the figure required by 2030 will be between $100 billion and $300 billion.

There are approximately 65 clean hydrogen projects in Latin America, with Colombia and Brazil spearheading significant initiatives. Beyond the regulatory challenge, infrastructure investment, community management and government incentives, the most promising opportunities lie in the Colombian Guajira and Chile's Strait of Magellan.







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