For some years now, the Inter-American Development Bank (IDB) has been studying the potential of implementing a green hydrogen market in Latin America and the Caribbean (LAC). Currently, the region has the cleanest electricity matrix in the world. This is made up of a significant amount of renewable resources in the form of wind, solar, geothermal, and hydrological resources, allowing it to have 55% clean generation compared to the world average of 35%. At the same time, the current renewable energy resources and the great potential available could be directed towards the production of green hydrogen and provide a strong position for the region in this new global industrial value chain that is beginning to develop.
Countries across the continent have taken important steps to develop the green hydrogen market. In 2018, Costa Rica published a directive to promote hydrogen as part of its decarbonization strategy. In 2020, Chile approved its National Roadmap for Hydrogen Development. In 2023, Uruguay published its Green Hydrogen Roadmap, which sets out its ambition, together with specific objectives for the production and export of hydrogen and derivatives in the short, medium, and long term (2025, 2030, and 2040). There is also an important opportunity for the decarbonization of the main industrial and mining clusters in the region. In addition to those mentioned above, Colombia, Trinidad and Tobago, and Panama have published their strategies in the last three years. Despite its recent publication, Chile and Colombia are already working on its update, Paraguay and Argentina have established an initial hydrogen roadmap, while the strategies of Bolivia, Brazil, Ecuador, and Peru are under development.
The IDB Group has supported governments and private actors in Latin America and the Caribbean to create an industry for the production, local adoption, and export of green H2 and its main derivatives, such as ammonia and methanol. The Bank currently has initiatives in most LAC countries, which include technical assistance, pilot projects, concessional funds, and different guidelines. Eleven of the twelve regional hydrogen strategies that are under development and/or implementation in the region are being financed and technically supported by the IDB. In addition, the IDB has contracted consulting services for pre-feasibility studies in seven countries and value chain analysis and drafting of legal frameworks in four more countries. And the work still continues.
H2LAC 2023: A key opportunity for the expansion of the green hydrogen market and ecosystem in the region
As green hydrogen production initiatives and policies grow and consolidate in the region, the challenges related to the development of a hydrogen market such as the still low volume of demand, the debate around the effectiveness of incentives, the high costs in the value chain, and the development of a supply chain, among others, become more important.
For this reason, the IDB will participate this year in H2LAC 2023, the second worldwide edition of the most important green hydrogen conference in Latin America and the Caribbean. Organized by New Energy Events, this event will bring together the main players from the public and private sectors and from multilateral organizations from all over the region to discuss the development of the hydrogen industry from June 13 to 15 in Rio de Janeiro, Brazil.
This is a particularly timely conference where the IDB, through its subject matter expert representatives, will participate in the following panels:
- Tuesday, June 13: The infrastructure challenge. This panel will address questions such as: how critical are the distribution and storage problems for the countries of Latin America and the Caribbean today? What is the priority for infrastructure development, and which countries are advancing with this type of investment? Is this type of coordination already happening organically or will you rely on multinational organizations to carry it out?
- Wednesday, June 14: The role of international development finance. This session will examine how international development organizations can create enabling conditions for hydrogen and discuss the next steps that can be taken. Likewise, the most appropriate financial tools that development banks and other institutions can offer to the industry will be discussed.
- Wednesday, June 14: Decarbonization on an industrial scale: This panel will seek to answer the following questions: What are some of the companies and sectors that are pursuing the goal of carbon-neutral operations? What are their plans and what difficulties are they encountering? And how does the industry intend to finance investments in clean hydrogen?
Likewise, a round table will be organized with government representatives to analyze the importance of having a green hydrogen certification to guarantee credibility and transparency and channel its potential as a carrier of clean energy.
Our region has great potential for the development of a green hydrogen supply market to support the global energy transition. The IDB remains committed to the development of this industry and to the positioning of the region as an exporter of this energy vector that will be of great importance for the energy transition.
To learn more about H2LAC, visit https://newenergyevents.com/h2lac.