The production and export of green hydrogen can drive the rebound of the Latin American and Caribbean economy, heavily hit by Covid-19, assured the world Bank in its latest regional semi-annual report.
For Latin American and Caribbean countries, to which the pandemic added another “lost decade” in terms of economic expansion after the debt crisis of the 1980s, “feeding a sustainable energy future” is one of the priorities to regain growth , According to the report.
Hydrogen, whose burning does not emit pollutants, is an alternative to fossil fuels that promote climate change. The production of the latter, mainly from natural gas and coal, is under scrutiny for emitting large amounts of CO2.
Efforts to reduce CO2 emissions will be the focus of the upcoming COP26 climate conference in Glasgow, Scotland.
That is why the world is betting more and more on green hydrogen, generated by electrolysis from renewable energies, such as solar, hydro and wind.
This clean fuel is “a path to inclusive, resilient and green economic recovery,” says the report from the world Bank, presented at recent meetings of the agency and the International Monetary Fund.
Latin American countries have great potential to successfully participate in the global green hydrogen market due to their endowment of natural resources to produce renewable energy, “Janina Franco, senior energy specialist at the World Bank, told AFP.
“This potential can open a great opportunity for Latin America to become a region leader in green hydrogen production, which would allow it not only to deepen its own energy transition, but also to supply the green hydrogen market in Europe or Asia, “he added.
Chile, at the forefront
Argentina, Brazil, Chile, Colombia, Mexico and Trinidad and Tobago have “potential” to be global exporters of green hydrogen, says the report of the world Bank, which cites data from the International Energy Agency (OUCH).
According to the IEA, created by the Organization for Economic Cooperation and Development (OECD) after the 1973 oil crisis, these countries are able to offer competitive prices to importers in Europe and Asia.
As of September, 13 countries in Latin America and the Caribbean had shown interest in developing a national green hydrogen industry, according to the H2LAC platform:
- Costa Rica
- The Savior
- Dominican Republic
Franco pointed out different stages in the green hydrogen industry in the region.
Countries like Costa Rica, Colombia, Paraguay and Uruguay, whose electricity generation is almost entirely renewable, show “substantial progress” in their hydrogen strategy and regulations, he said.
Others, such as Brazil, Argentina, Mexico and Peru, which have great potential for local demand for mining and the production of steel, iron or chemicals, are in a “nascent process” in terms of a roadmap and regulations.
And at the forefront is Chile, the first country in the region to launch its “National Green Hydrogen Strategy” in November 2020, and which already has national and foreign interested in using this clean fuel and its derivatives, such as ammonia. , methanol or synthetic fuels.
Chile, which is committed to leading the global production of green hydrogen in three decades, announced last week that by 2030 it expects the Santiago airport to be the first in Latin America to operate from green hydrogen and its derivatives.
Less emissions, more employment
The world Bank highlights green hydrogen as a solution to “decarbonize” sectors difficult to electrify, such as long-distance shipping and aviation, and heavy industries.
In addition, it underlines that this clean fuel can help countries develop green energy value chains, which allow them to be globally competitive in the production of steel, copper, ammonia or fertilizers.
Green hydrogen and its derivatives can represent a source of export income by strengthening the region’s access to developed markets willing to pay a premium that guarantees green value chains, “the report indicates.
The green hydrogen industry has another advantage: creating “green, local and resilient” jobs, both direct and indirect, particularly in the areas of production, transport and distribution, highlights the world Bank.
But the transition to green hydrogen is not without challenges, including cost-competitive production, the development of adequate infrastructure, and the availability of knowledgeable professionals to operate the new technology, Franco warned.
“The greatest challenge facing countries in the region and in the world is to achieve competitiveness in production costs and achieve prices that allow the use of hydrocarbons to be displaced by green hydrogen,” he said.