As Latin American nations establish aggressive climate goals, hydrogen is poised to become an important part of the energy puzzle, but numerous operators in the region are thinking bigger and toward the global market.


Latin America could become “a key contributor to the global push toward low‑carbon hydrogen,” according to a recent study by the International Energy Agency (IEA). However, it will likely be a decade before meaningful progress is made.

More than 120 countries have so far announced their intention to bring emissions to net zero by the middle of this century, according to IEA, and hydrogen will almost undoubtedly be an important part of this push. The global energy watchdog suggested that today’s early stage technologies including hydrogen will likely need to contribute “almost half of the emissions reductions” in the push to net zero.

Columbia University’s Center on Global Energy Policy also includes hydrogen among what it calls its three major “pillars of decarbonization.” Globally, Europe so far is ahead of the pack. It is aiming for 40 GW of installed electrolyzer capacity by 2030, as well as 10 million tons of green hydrogen production per year, according to Bloomberg New Energy Finance.

Latin America will likely only get to a fraction of that by 2030, but its plans are starting to take shape across the region, with Chile in the lead.

Chile First

Chile was the first Latin American country and one of a dozen globally to publish a national hydrogen plan late last year. The country plans to be carbon neutral by 2050, and “hydrogen is essential” in this goal, energy minister Juan Carlos Jobet said in a recent speech.

Chile is aggressively decarbonizing its economy. It is set for 6 GW of renewables this year, and is shuttering its coal plants. Still, “the plan has one problem,” Jobet said. “There are certain parts of the economy that are very hard to electrify. And that is where hydrogen is an essential solution.”

With a booming renewable energy business, the country is setting its sights on exporting green hydrogen, or hydrogen developed with renewables including solar and wind resources.

“We are working to become the cheapest green hydrogen producer in the world by 2030, and we want to be one of the three top exporters of green hydrogen and its derivatives by 2040,” Jobet said.

The country is working to have 5 GW of electrolyser capacity under development by 2025, he said. Chile’s hydrogen potential has “seen enormous interest, and 40 projects are in different stages of development by local and international companies.”

One of those firms is mining explosives company Enaex SA, which in conjunction with French multinational Engie SA, is developing a green ammonia production complex in northern Chile with 1 GW-plus of planned electrolyser capacity.

In February, Chilean generator AES Gener SA signed a memorandum of understanding with an undisclosed international hydrogen producer to conduct a feasibility study for the first large green hydrogen-based ammonia project in Chile. The project would produce green ammonia for export. 

Chile is also home to a first-of-its-kind hydrogen fuels pilot plant backed by carmaker Porsche AG in its southern Magallanes province.

Hydrogen Transportation

The IEA sees the transport sector as promising in the region, although technological advancements are still needed to unlock the full potential of many of these applications.

“Other than the existing uses in the chemical, steel and refining industries, one of the possible future uses of hydrogen in the region is in transportation,” IEA’s Mariano Berkenwald, clean energy transitions program officer for Latin America, told NGI. “This includes buses, trucks, shipping, off-road vehicles, with the potential to reduce carbon dioxide emissions across the region alongside other sustainable technologies.”

In Uruguay, state oil company Administración Nacional de Combustibles Alcohol y Pórtland (Ancap) is involved in a pilot project to develop hydrogen for long-haul transport. It’s only one example of oil and gas companies taking the lead in embracing hydrogen.

Elsewhere in Latin America, Colombia’s state oil company Ecopetrol SA is also looking closely at hydrogen potential. 

In addition, Argentina’s state oil company YPF SA in conjunction with the national research council Consejo Nacional de Investigaciones Científicas y Técnicas de Argentina (Conicet) is spearheading a hydrogen consortium called H2Ar. It comprises 40 companies including gas transporters, renewable producers, oil and gas companies and potential offtakers.

Argentina’s state-owned Integración Energética Argentina (Ieasa), the country’s principal buyer of imported natural gas, has also stated its intention to enter the hydrogen sector.

Institute of the Americas’ Cecilia Aguillon, director of the energy transition initiative, thinks that the region’s major energy companies, including oil and gas firms, are looking to get in on the hydrogen opportunity early.

“We see how when solar came about, everyone thought it was crazy. It was just too expensive,” Aguillon told NGI. “And utilities were late to the party. So, a lesson has been learned with solar, and now power and oil companies are getting involved early on in hydrogen.”

She said that oil and gas companies have the “capacity, the facilities, they have everything we need for hydrogen.” At this stage, it doesn’t matter if the hydrogen produced is green, gray or blue, as long as the industry in Latin America gets off the ground. 

Blue hydrogen is manufactured with natural gas, with greenhouse gas emissions eliminated using carbon capture utilization and storage, or CCUS. Gray hydrogen is developed using fossil fuels. 

“Countries can start from the place that they are comfortable with and use oil and gas for hydrogen,” Aguillon said, pointing to the need to bring down the high costs. The estimated costs to develop and deliver green hydrogen today approach $20/MMBtu, according to the IEA. 

“Otherwise it would take longer to get the economies of scale to kick in and for exports to grow from the region. This is a unique opportunity for Latin America.” Aguillon pointed in particular to Brazil’s hydrogen potential, and its “amazing resources and market.”

Brazil has seen a flurry of recent hydrogen announcements, including a feasibility study by Australian firm Enegix Energy Pte to build a $5 billion green hydrogen plant in the Port of Pecém, Ceará state. Enegix said it would be the largest hydrogen project in the world.

Natural Gas Partner

So far, there are no projects to produce hydrogen from natural gas in Latin America, but opportunities abound.

“We are not aware of any announced low-carbon hydrogen projects using natural gas as a feedstock in Latin America, but there could be opportunities there, most notably in countries that could produce low-cost natural gas like Argentina, Brazil, Trinidad,” said IEA’s Berkenwald. “The low-carbon credentials or footprint of such projects would depend on the ability of the producers to sequester or use the carbon emitted.

“To develop projects with carbon capture, the thing is that you need a lot of scale, so it makes sense to use industrial clusters, especially in port areas, which group several hard-to-abate emission sources, as springboards to develop these projects and you could have these conditions in a couple of places.”

Berkenwald said “everywhere, the game is getting ready for 2030. I don’t think we will see massive volumes of hydrogen in the region before that.” 

In terms of installed capacity, Berkenwald said electrolysis in Latin America should be in the 1 GW scale by 2030 if the announced projects go ahead as planned.

Aguillon said one concern is that the region seems focused on hydrogen for export, without paying enough attention to developing a local market and infrastructure.

“What are they doing in terms of local infrastructure? If everybody decides to export, it’s not going to work. Latin American countries need to look at how to utilize the hydrogen and grow a local market and expertise.”