• National hydrogen roadmap vaults Chile to lead position
• Industry in region still in ‘diapers’ phase
• Uruguay ‘punches above its weight’

Brandon Mulder, Platts

HOUSTON
EnergiesNet.com 11 30 2022

Chile, Brazil and Colombia, followed closely by Uruguay and Argentina, are leading Latin America’s green hydrogen push and are positioning the region to be a hydrogen exporter for European and Asian markets, business intelligence platform Bnamericas said Nov. 28.

These Latin American countries are currently the most likely to attract green hydrogen
investments because of their favorable policy environments and abundant renewable resources.

“While the industry is still in its diapers in the region, the potential is significant in terms of export and local adoption in areas such as transport and industry, particularly steelmaking in major producer Brazil,” Bnamericas said in a report.

Chile leads the Latin American region in hydrogen preparedness, Bnamericas said, citing the H2LAC readiness index, which tracks policy incentives, development of countries’ low carbon ecosystem and the number of projects existing and underway.

Chile’s success so far is due to strong policy incentives that have maintained high interest from industry partners and spurred international cooperation agreements, according to Senior Consultant Juan Pablo Zuniga of Hinicio, which compiled the H2LAC.

According to the index, Chile scored 65 points on a 100-point scale, followed by Colombia with 57, Brazil with 51, Uruguay with 42 and Argentina at 37. For context, more mature hydrogen markets, like Japan and Germany, would score 100 on Hinico’s index, Zuniga said in the Bnamericas report.

Chile leads the region due to the enactment energy policies, new cooperative agreements and its high number of existing projects. The country has 25 projects currently under development, including its largest, H2 Magallanes — a 10-GW project to be located in the country’s windy south.

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.

Hydrogen export opportunity

Uruguay, one of the least populous countries in South America, “punches above its weight” when it comes to clean hydrogen potential thanks to the adoption of a national hydrogen roadmap, research and development funding, and plans for an export-oriented methanol project. The country’s national oil company, ANCAP, is preparing a series of offshore green hydrogen and wind energy funding rounds in 2023, and it is looking to partner with companies experienced in offshore projects to develop its envisioned maritime hydrogen production hub.

According to Bnamericas, next year ANCAP is expected to tender bids for 10 offshore leases, each of which is expected to have an average wind energy capacity of 2-3 GW that can produce 320,000 mt/year of green hydrogen. In total, Uruguay is estimated to have 250 GW of offshore wind potential.

Nonetheless, adoption of hydrogen economies in Latin America still faces challenges, Bnamericas said.

“These include implementing certification systems, supportive policy frameworks, project de-risking and community engagement mechanisms and demand-side measures, along with ensuring power grids are ready and offer competitive prices,” it said. “Having the requisite midstream infrastructure – particularly for export operations – is another.”

But if these obstacles can be overcome, Latin America’s opportunity to build an export industry that can serve the global energy transition is ripe. Yet these opportunities will need to rely on public-private partnerships, said Eduardo Bitran of Chile’s Universidad Adolfo Ibanez.

“If there’s no public-private alliance, it’s going to be difficult to position ourselves as leading global exporters,” Ibanez said in the Bnamericas report. “The commitment of countries is fundamental, with national strategies, route maps that show the road ahead and a participative, shared vision. Only a few countries have this today.”

spglobal.com 11 30 2022