Green hydrogen could be a big winner for Argentina’s economy

1 June, 2022

Argentina is trying to position itself as an investment destination for a hydrogen economy. It hopes that this technology will contribute to the country’s economic growth and to a more sustainable future.

The Argentine government has developed the 2030 National Low-Emission Hydrogen Strategy, in collaboration with the private and academic sectors, to promote public-private collaboration, investment in science and technology, and industrial participation, among other initiatives for the deployment of this energy vector.

All types of hydrogen are relevant, but renewable hydrogen is of particular importance, as it will enable the country to decarbonise the energy mix, minimise the environmental impacts of economic growth, drive territorial development, and create quality jobs.

National Hydrogen Strategy

Argentina already has what is known as the Hydrogen Promotion Act dating back to 2006. This legislation led to national plans with mixed results, but it has at least allowed the country to take its first steps in the sector. Argentina has several experimental plants and researchers specialised in hydrogen.

After this experience, the Argentine government wants to give further impetus to this emerging sector. And this is why the 2030 National Low-Emission Hydrogen Strategy was launched. It aims to create a roadmap involving all relevant players to build a broad production chain with quality jobs and enable export growth.

Argentina is striving to build a broad production chain with quality jobs and enable export growth

Both issues, jobs and exports, are essential for the country. After many years of economic ups and downs and prolonged crisis periods, the Argentine economy needs a revival, which could be achieved through hydrogen.

The 2030 National Low-Emission Hydrogen Strategy is designed as a document with long-term goals that also includes short-term targets to drive the development of an activity that will generate 50,000 jobs and 15 billion in exports by 2050.

It gives a key role to technological development and training over the next 15 to 20 years. And given that Argentina is a major producer of natural gas, this development could come from blue hydrogen. Of course, the strategy also includes laying the legal foundations for a regulatory framework and technical standards that will make it possible to sustainably promote the production of green hydrogen.

Argentina´s potential

Argentina has what it takes to play a leading role in this sector. First of all, because it has inexhaustible natural energy sources, such as large areas of land, often with strong winds, high solar radiation and no shortage of water. But also because it produces around 400,000 tonnes of grey hydrogen (without capturing emissions, which offers significant potential for improvement in terms of sustainability) and because more than half of its current energy production is natural gas (the basis for blue hydrogen production).

Furthermore, with the second largest natural gas reserves in the world and an extensive gas pipeline network (16,000 km that can be used for hydrogen transmission), Argentina has developed an industry for gas-related goods and services. The country is also a major supplier of biomass and biofuels (from corn, sugar cane and soya beans).

Argentina is in a good position to become a leading player in this industry

Although the conditions are favourable, there are important challenges the country must overcome. Through the 2030 National Low-Emission Hydrogen Strategy some of these issues have already been addressed, such as dialogue between stakeholders and working toward a consensus. The country is also working to change its energy mix, which is currently dominated by natural gas, oil, and nuclear power.

Funding is another challenge that must be overcome to promote an industry like hydrogen on a national scale. External funding, however, can be used to solve this complex problem. Lastly, creating the necessary legal framework and institutions to attract foreign investment to Argentina is vital.

In fact, some foreign companies have already arrived. In 2021, for instance, an Australian company announced a project to produce green hydrogen in Rio Negro province. Through this investment, 15,000 direct jobs will be created and 2.2 million metric tons of green hydrogen will be generated annually by 2030.

Argentina should therefore be able to transition to a renewable hydrogen economy. The groundwork has already been done through the 2030 National Low-Emission Hydrogen Strategy, made possible by Argentina’s enviable geographical conditions.