The Argentine government is taking steps to promote the production of green hydrogen and other forms of hydrogen as part of the global shift to clean energy. Energy Secretary Flavia Royón announced at the Global Green Hydrogen Forum that the government intends to submit legislation to provide incentives for hydrogen production to meet the expected growing global demand.
Hydrogen in Argentina: Innovative bill to boost production and exports
The proposed bill includes several provisions to encourage hydrogen production. It provides tax benefits, such as a 0.0% tax rate on revenues generated from green and pink (nuclear) hydrogen for the first ten years after the legislation is approved. For blue hydrogen (natural gas), the tax rate will start at 1.5% and gradually increase to 3% in year 11 and then to 4.5%.
In addition, the bill offers incentives such as access to foreign currency, currently restricted in Argentina. Hydrogen exporters will be allowed to use up to 50% of their export earnings to cover the international financing and capital costs of hydrogen projects.
The government plans to send the bill to Congress in the near future. European markets, including the European Union, have shown interest in purchasing hydrogen supplies from Argentina and other Latin American countries. According to Malcom Turnbull, president of the Swiss Green Hydrogen Organization, Latin America can play a crucial role in meeting the growing global demand for hydrogen. The region’s abundance of hydroelectric, wind and solar resources makes it a potential hub for green hydrogen production.
Turnbull predicts that global hydrogen demand will increase sevenfold by 2050, driven by the need to ensure energy security and decarbonize heavy transportation, shipping and steel production. The European Union, in particular, is counting on Latin American countries to supply green hydrogen and ammonia to meet its carbon neutrality goals.
Argentina ready to become a key player in green hydrogen production
Argentina has attracted the attention of companies looking for green hydrogen suppliers. Stefan Kaufmann, executive hydrogen advisor for German steel producer Thyssenkrupp, highlighted the urgent need for a hydrogen supplier by 2026. Thyssenkrupp aims to produce 2.5 million metric tons of green steel each year by that date, which requires an initial 150,000 metric tons of green hydrogen per year. By 2029, the demand for green hydrogen is expected to reach 300,000 metric tons per year.
Kaufmann noted that using green hydrogen would significantly reduce the company’s carbon dioxide emissions. It predicts a substantial increase in global green hydrogen demand from 2030 onwards, but has identified challenges such as limited production capacity and transportation infrastructure as potential barriers.
Several companies, including YPF, Argentina’s state-owned energy company and largest oil and natural gas producer, are exploring hydrogen projects in the country. YPF CEO Pablo Iuliano revealed plans to use oil export revenues to fund the company’s transition to long-term clean energy. This includes the development of an upgraded pipeline to Chile and the construction of pipelines and port facilities on the Atlantic coast to facilitate the loading of very large crude oil carriers.
The proposed bill and the government’s efforts to encourage green hydrogen production underscore Argentina’s commitment to embrace clean energy alternatives and position itself as a key player in the global transition to a sustainable future. The opportunities for increased investment, economic growth and international collaboration in the hydrogen sector present significant prospects for the Argentine energy industry and the economy as a whole.