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12 Insights on Hydrogen –

Argentina Edition

IMPULSE

Please cite as:

Agora Energiewende, Agora Industry,

Fundación Torcuato Di Tella (2023):

12 Insights on Hydrogen – Argentina Edition

www.agora-industry.org

This publication is available for

download under this scan code.

ACKNOWLEDGEMENTS / MISCELLANEOUS

We wish to thank the following colleagues for

their contributions in various ways: Matthias

Deutsch, Leandro Janke, Zaar Hussain, Camilla

Oliveira, Emir Çolak (all Agora Energiewende).

We also wish to thank the PtX Hub partners

for their contributions and reviews: Veronica

Chorkulak, Stephan Remler, Claudia Ilting, Manuel

Andresh, Sonia Rueda, Nelly Eisenbach (all GIZ);

National direction of scenarios and evaluation of

energy projects by the Undersecretary of energy

planning at the Secretariat of Energy of Argentina,

Luisa Lopez (DECHEMA), Raul Bertero (CEARE)

The International Power-to-X Hub is implemented

by the Deutsche Gesellschaft für Internationale

Zusammenarbeit (GIZ) GmbH on behalf of the

German Federal Ministry for Economic Aairs and

Climate Action (BMWK). Financed by the Inter-

national Climate Initiative (Internationale Klima-

schutzinitiative, IKI), the PtX Hub is a contribution

to the German National Hydrogen Strategy of

2020 and represents one of the four pillars of the

BMUV’s PtX action programme initiated in 2019.

294/02-I-2023/EN

Version 1.1, June 2023

PUBLICATION DETAILS

IMPULSE

12 Insights on Hydrogen – Argentina Edition

WRITTEN BY

Agora Energiewende

www.agora-energiewende.de

info@agora-energiewende.de

Agora Industry

www.agora-industry.org

info@agora-industrie.de

Anna-Louisa-Karsch-Straße 2

10178 Berlin | Germany

P +49 (0)30 700 14 35-000

Fundación Torcuato Di Tella

Esmeralda 1376 | 1007 Ciudad Autónoma de

Buenos Aires, Argentina

T +54 11 5169 7000

http://ftdt.cc

mc@itdt.edu

PROJECT MANAGEMENT

Fabian Barrera

fabian.barrera@agora-energiewende.de

AUTHORS

Fabian Barrera (Agora Energiewende);

Luciano Caratori, Micaela Carlino, Hernán Carlino

(all Fundación Torcuato di Tella)

Typesetting: Karl Elser Druck GmbH

Proofreading: WordSolid

Title picture: Bruno De Regge I Unsplash

12 Insights on

Hydrogen –

Argentina Edition

This work is licensed under

CC BY-NC-SA 4.0.

Preface

Dear reader,

The role of rene

wable hydrogen is getting more

and more attention in the global pursuit of climate

neu trality. The trading potential of hydrogen and its

derivatives, combined with the important social

and economic beneﬁts of a hydrogen economy, is

bringing new players into the hydrogen game. In

addition, the global fossil fuel crisis has underlined

the need for new energy suppliers and a more

diverse industrial market, shifting the spotlight on

renewable-rich countries.

Argentina has vast energy resources that position

it as one of the potential future exporters of renew-

able hydrogen and Power-to-X (PtX) products.

However, when embarking on the road to becoming

one of the world’s hydrogen hubs, certain aspects

need to be carefully analysed. Energy infrastructure

development, the use of natural gas, certiﬁcation,

and in vestment needs are among the hot topics

currently being discussed at the national level.

This brief study aims to contribute to the discussion

on the priorities and next steps that are part of the

decision-making process to maximise the local bene -

ﬁts of scaling up renewable hydrogen production in

Argentina. We also highlight the signiﬁcant con tri-

bution to the global decarbonisation that the country’s

potential export of green products can make.

I wish you a pleasant and informative read.

Yours sincerely,

Frank Peter

Director, Agora Industry

Key ﬁndings at a glance:

Renewable hydrogen will be crucial for reaching climate neutrality; however, it should be reserved

for applications where direct electriﬁcation is not possible. Argentina’s national hydrogen strategy,

currently being drafted, should prioritise the use of hydrogen in key sectors such as industry, ship-

ping, and aviation, and in providing ﬂexibility to a renewable-based power system. For other use

cases, direct electriﬁcation is usually more economic and ecient.

Argentina is well-positioned to become a major global producer of hydrogen due to its vast energy

potential. Argentina’s renewable energy resources can produce cheap electricity that can be con-

verted into renewable hydrogen. Natural gas with carbon capture and storage could be used as a

bridge technology but should be switched to renewable hydrogen as soon as possible.

Developing a renewable hydrogen economy can help decarbonise Argentina’s industry and create

important socio-economic beneﬁts to the country. Hydrogen can enable the production of green

products with a high export demand potential, such as ammonia, fertilisers, and synthetic fuels.

Scaling up the production of these products would stimulate sustainable industrial growth and

contribute to economic diversiﬁcation and job creation.

International cooperation could strengthen the Argentinian renewable hydrogen economy and

thus boost global decarbonisation. Renewable hydrogen production in Argentina can greatly beneﬁt

global decarbonisation and it would therefore be in the interest of the international community

to support the expansion of the country’s infrastructure and industrial development. Regional

cooperation would also strengthen Latin America's position as hydrogen producer in international

fora on standards and trade.

/49

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12InsightsonHydrogen–ArgentinaEditionIMPULSEPleaseciteas:AgoraEnergiewende,AgoraIndustry,FundaciónTorcuatoDiTella(2023):12InsightsonHydrogen–ArgentinaEditionwww.agora-industry.orgThispublicationisavailablefordownloadunderthisscancode.ACKNOWLEDGEMENTS/MISCELLANEOUSWewishtothankthefollowingcolleaguesfortheircontributionsinvariousways:MatthiasDeutsch,LeandroJanke,ZaffarHussain,CamillaOliveira,EmirÇolak(allAgoraEnergiewende).WealsowishtothankthePtXHubpartnersfortheircontributionsandreviews:VeronicaChorkulak,StephanRemler,ClaudiaIlting,ManuelAndresh,SoniaRueda,NellyEisenbach(allGIZ);NationaldirectionofscenariosandevaluationofenergyprojectsbytheUndersecretaryofenergyplanningattheSecretariatofEnergyofArgentina,LuisaLopez(DECHEMA),RaulBertero(CEARE)TheInternationalPower-to-XHubisimplementedbytheDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbHonbehalfoftheGermanFederalMinistryforEconomicAffairsandClimateAction(BMWK).FinancedbytheInter-nationalClimateInitiative(InternationaleKlimaschutzinitiative,IKI),thePtXHubisacontributiontotheGermanNationalHydrogenStrategyof2020andrepresentsoneofthefourpillarsoftheBMUV’sPtXactionprogrammeinitiatedin2019.294/02-I-2023/ENVersion1.1,June2023PUBLICATIONDETAILSIMPULSE12InsightsonHydrogen–ArgentinaEditionWRITTENBYAgoraEnergiewendewww.agora-energiewende.deinfo@agora-energiewende.deAgoraIndustrywww.agora-industry.orginfo@agora-industrie.deAnna-Louisa-Karsch-Straße210178BerlinGermanyP+49(0)307001435-000FundaciónTorcuatoDiTellaEsmeralda13761007CiudadAutónomadeBuenosAires,ArgentinaT+541151697000http://ftdt.ccmc@itdt.eduPROJECTMANAGEMENTFabianBarrerafabian.barrera@agora-energiewende.deAUTHORSFabianBarrera(AgoraEnergiewende);LucianoCaratori,MicaelaCarlino,HernánCarlino(allFundaciónTorcuatodiTella)Typesetting:KarlElserDruckGmbHProofreading:WordSolidTitlepicture:BrunoDeReggeIUnsplash12InsightsonHydrogen–ArgentinaEditionThisworkislicensedunderCCBY-NC-SA4.0.3PrefaceDearreader,Theroleofrenewablehydrogenisgettingmoreandmoreattentionintheglobalpursuitofclimateneutrality.Thetradingpotentialofhydrogenanditsderivatives,combinedwiththeimportantsocialandeconomicbenefitsofahydrogeneconomy,isbringingnewplayersintothehydrogengame.Inaddition,theglobalfossilfuelcrisishasunderlinedtheneedfornewenergysuppliersandamorediverseindustrialmarket,shiftingthespotlightonrenewable-richcountries.Argentinahasvastenergyresourcesthatpositionitasoneofthepotentialfutureexportersofrenew-ablehydrogenandPower-to-X(PtX)products.However,whenembarkingontheroadtobecomingoneoftheworld’shydrogenhubs,certainaspectsneedtobecarefullyanalysed.Energyinfrastructuredevelopment,theuseofnaturalgas,certification,andinvestmentneedsareamongthehottopicscurrentlybeingdiscussedatthenationallevel.Thisbriefstudyaimstocontributetothediscussionontheprioritiesandnextstepsthatarepartofthedecision-makingprocesstomaximisethelocalbene-fitsofscalinguprenewablehydrogenproductioninArgentina.Wealsohighlightthesignificantcontributiontotheglobaldecarbonisationthatthecountry’spotentialexportofgreenproductscanmake.Iwishyouapleasantandinformativeread.Yourssincerely,FrankPeterDirector,AgoraIndustryKeyfindingsataglance:1Renewablehydrogenwillbecrucialforreachingclimateneutrality;however,itshouldbereservedforapplicationswheredirectelectrificationisnotpossible.Argentina’snationalhydrogenstrategy,currentlybeingdrafted,shouldprioritisetheuseofhydrogeninkeysectorssuchasindustry,shipping,andaviation,andinprovidingflexibilitytoarenewable-basedpowersystem.Forotherusecases,directelectrificationisusuallymoreeconomicandefficient.2Argentinaiswell-positionedtobecomeamajorglobalproducerofhydrogenduetoitsvastenergypotential.Argentina’srenewableenergyresourcescanproducecheapelectricitythatcanbeconvertedintorenewablehydrogen.Naturalgaswithcarboncaptureandstoragecouldbeusedasabridgetechnologybutshouldbeswitchedtorenewablehydrogenassoonaspossible.3DevelopingarenewablehydrogeneconomycanhelpdecarboniseArgentina’sindustryandcreateimportantsocio-economicbenefitstothecountry.Hydrogencanenabletheproductionofgreenproductswithahighexportdemandpotential,suchasammonia,fertilisers,andsyntheticfuels.Scalinguptheproductionoftheseproductswouldstimulatesustainableindustrialgrowthandcontributetoeconomicdiversificationandjobcreation.4InternationalcooperationcouldstrengthentheArgentinianrenewablehydrogeneconomyandthusboostglobaldecarbonisation.RenewablehydrogenproductioninArgentinacangreatlybenefitglobaldecarbonisationanditwouldthereforebeintheinterestoftheinternationalcommunitytosupporttheexpansionofthecountry’sinfrastructureandindustrialdevelopment.RegionalcooperationwouldalsostrengthenLatinAmerica'spositionashydrogenproducerininternationalforaonstandardsandtrade.4ContentsHydrogenasadecarbonisationdriverforArgentina512InsightsonHydrogenforArgentina91.DiversifyingtheenergymatrixwithrenewableenergywillunlockArgentina’shydrogenpotential92.Theroleofhydrogenforclimateneutralityiscrucialbutsecondarytodirectelectrification143.Energyinfrastructureshouldbeprioritised,andhydrogenproductionshouldbeincludedinlong-termdevelopmentplans174.ArgentinahasthepotentialtobecomeakeyglobalexporterofPtXproducts;itmustensurethatproductionisaccompaniedbythedecarbonisationofdomestichydrogendemand205.Thepotentialfuturemarketforhydrogenvehiclesisshrinkingdaily226.Argentina’sbioenergyindustrycansignificantlycontributetoitsPtXmarket257.ArgentinashouldcontemplateitsroleinglobaltradetoensurethecompetitivenessofitsexportstoEuropeanandAsian-Pacificmarkets278.Thehydrogenindustryneedstobecompetitiveandestablishstandardsthatareinlinewithglobaltradeandindustryrequirements309.Fossil-basedhydrogenwithcarboncaptureandstorage(CCS)canserveasabridgetechnologybutwillbeoutcompetedbyrenewablehydrogen3210.Argentinacanidentifypotentiallocationsforinitialhydrogenhubsbymappingcomplementaryresourcesandlocaleconomiesintheprovinces3611.Argentinashouldcreateaclearpolicyframeworkforhydrogenproduction,developadequateconditionstoattractinvestors,andregardhydrogenasanenergyandclimateissuewhenconsideringaccesstofinancinginstruments3812.PromotingR&Dandincentivisinginternationalcooperationcanacceleratehydrogenproduction41IMPULSE12InsightsonHydrogen–ArgentinaEdition5HydrogenasadecarbonisationdriverforArgentinaAnoverviewofArgentina’senergycontextArgentinaischaracterisedbyadiversearrayofenergyresources.Ithasoneoftheworld’slargestunconventionalgasandoilreserves,mostofwhicharelocatedintheNeuquénBasin’sVacaMuertafield.Naturalgasisthecountry’smainenergysource(seeFigure1).However,Argentinaisanattractivemarketforcleanenergyduetoitsvastavailabilityofrenew-ableenergyresources.Argentina’senergymatrixislargelydominatedbyhydrocarbons,accountingfor85percentofthecountry’stotalprimaryenergysupply,followedbynuclearandrenewables(includinghydro,solar,windandbioenergy)(seeFigure1).Thisheavyrelianceonfossilfuelsisalsoreflectedinthecountry’spowersupply,wherenaturalgasaccountsformorethan60percentofpowergeneration.Nuclearenergyisalsoanimportantenergysource,positioningthecountrytofurtherexploreitsuse.Renewableenergy,especiallyhydropower,playsalargeroleinthecountry’selectricityproduction.(seeFigure1).Otherrelevantrenewableenergysourcesinthecountryincludewind,solarPV,andbioenergy.Itisimportanttonotethat,despitetheabundanceofenergyresourcesinthecountry,duringthewintermonthsthelocalnaturalgassupplydoesnotcoverdomesticconsumption,andAgoraEnergiewende,AgoraIndustryandFundaciónTorcuatodiTella(2023)basedonCAMMESA(2022)PrimaryenergysupplyandpowergenerationinArgentina,2021Figure1FuelOil4%Wind74%Nuclear4%VariableRenewableEnergy2%74.3[MMtep]142.6[TWh]Hydro3%Biomass3%Biofuels3%Smallhydro7%Solar13%Other6%Others1%Coal3%Nuclear7.2%Coal1%Thermal63.5%Diesel10%Hydro17%Oil32%Otherrenewables12.3%Naturalgas82%Naturalgas52%AgoraIndustry12InsightsonHydrogen–ArgentinaEdition6thereforeLNG,diesel,andfueloilimportsarerequiredtomeetfullelectricitydemand.Argentinahaspromotedrenewableenergyuseinpowergenerationformorethanadecade.In2015,thecountrysetcleartargetsforrenewableenergyinpowergeneration.Itwasthefirststepinaseriesofprogrammesthatprovideincentivesandbenefitsforrenewablesgeneration,includingdistributedgenera-tionforprivateusers.Thissetofpoliciesandregula-tionsincreasedtheinstalledcapacityofrenewableenergyby4349MWbetween2015andthefirsthalfof2022.Intermsofelectricitygeneration,theshareofrenewableenergyincreasedfromlessthan2to14percent.Today,Argentina'senergytransmissioninfrastruc-ture,incombinationwithmacroeconomicfactors,1placesmajorconstraintsonthedevelopmentoftherenewableenergymarket.Theresulthasbeenamodestexpansionofrenewableandnon-renewablepowergeneration.TheimportanceofhydrogenArgentina’senergyresourcesmakethecountryveryattractiveforbothfossil-basedandrenewablehydrogenproduction.Fossil-basedhydrogenwithcarboncaptureandstorage(CCS)isapossibletransitiontechnology,butpolicymakersshouldcarefullyconsidertherisksofmethaneleakageandthepotentialforstrandedassetsgiventheglobalappetiteforrenewablehydrogenandPower-to-X(PtX)products.Asthehydrogenmarketbecomesmoreestablishedoverthecomingyears,conditionsmayimprove,settingupArgentinatobecomea1Overthepastdecades,Argentinahasbeenaffectedbysignificanteconomicfluctuationsandmacroeconomicimbalancesthathavelimitedeconomicgrowth.Thishastakenatolloninfrastructureandotherstrategicsector,creatingsignificantchallengesforinfrastructureinvestmentandplanning,andhaveaffectedinvestorconfidence.competitiveproducerofhydrogenandotherPtXproducts.2Argentina’srenewableenergyconditionsareoptimalforrenewablehydrogengeneration.Forinstance,estimationsoffull-loadhours3(akeyfactorforrenewablehydrogenproduction)puttheweightedaverageofthecapacityfactorforwindpowerat47percentin2021(4149full-loadhours).Inthesameyear,solarPVhadacapacityfactorof29percent(2541full-loadhours)(CAMMESA,2022).However,thecapacityfactorforwindandsolarPVpowerplantsisunevenlydistributedacrossthecountry’svastterritory.PatagoniaandBuenosAiresleadinwindpower(eachwitharound50percentor4300hours/year),whileCuyoshowsthebestresultsforsolarPV(31percent,or2650full-loadhours/year).Inaddition,theavailabilityoflandinArgentinaisalsoanimportantadvantagefortheproductionofhydrogen.ThisisevenmoresignificantinthePatagoniaregion,whichhasimportantenergyresourcesandalowpopulationdensity.Newenergyandhydrogenprojectswouldhavelessimpactonthelocalpopulationandencounterlessopposition.However,allprojectsshouldguaranteeacomprehen-siveEconomic,Environmental,Social,andGovern-ance(EESG)frameworktomitigatenegativelocalimpacts.TheavailabilityoflandincreasesArgenti-2UndertheumbrellaofthePtXHub,AgoraEnergiewendeincollaborationwithÖkoInstituthasdevelopedtheBusinessOpportunityAnalyser(BOA),aninteractivetoolthatpromotestheexportofarangeofPtXmoleculessuchasgreenammonia,e-methanol,syntheticfuels,etc.ThetoolenablesuserstocalculatethedeliveredcostofPtXmoleculesfromanexportcountrytoanimportcountry,highlightingthecompetitiveedgeofonecountryagainstanother.ArgentinaisoneofthedeepdivecountriesinBOA.Thatis,thetoolprovidesmoredetailinformationandlocaldatatoobtainprefeasibilityinformationinthetradeofPtXproductsfromthecountry.3Estimationsaremadebasedondatafrom99powergen-erationplantswithatotalinstalledcapacityof4367MWforthe2019–2021period.IMPULSE12InsightsonHydrogen–ArgentinaEdition7na’shydrogenpotential,especiallywhencomparedwithEuropeancountries.GlobalhydrogendemandHydrogenuseinLatinAmericacorrespondsonlytoaround5percentofglobalhydrogendemand(IEA,2021),whichreached94Mtin2021(IEA,2022).ArgentinaisoneofthetopsixhydrogenconsumersinLatinAmerica,usingaround350ktin2019.HydrogeninArgentinaismostlyusedforindustrialhydrogenapplicationssuchasoilrefiningandtheproductionofammonia,methanolanddirectreducediron(DRI)(IEA,2021).Givenitswidespreadhydrogenuseandrenewablehydrogenpotential,Argentinacouldbeakeyplayerinsupportingglobaldecarbonisation.Globalhydrogendemandisexpectedtokeepgrowinginviewofitsrolealongtheentireenergychain.AsshowninFigure2,variousglobalenergyscenariosestimatethehydrogendemandtoreachmorethan600Mtin2050.Mostoftheglobalenergyscenariosagreethathydrogendemandwillbedrivenbythedecarbonisationofhard-to-abateapplicationsinindustryandtransport(mostlyaviationandshipping).Hydrogenuseinthepowersectorwillmostlygotowardsstorageapplicationsthatfurtherintegratevariablerenewableenergyintothesystem.Buthydrogendemandinthepowersectoristhemostdifficulttoforecastsincethetechnologylandscapeisevenmorecomplicatedthantheavailableoptionsfortheheatandtransportsectors.However,hydrogenmaybemorescalablethananyothertechnologygivenitsmanyapplica-tionsoutsidethepowersector.Somecountrieswithgreaterhydrogendemandarelikelytobeunabletomeettheirowndomesticdemandforlow-carbonhydrogen.Inthesecases,renewable-richcountrieslikeArgentinacanplayakeyroleinsupplyingrenewablehydrogentobigdemandcentres.Forinstance,inlinewithGerma-ny’sambitionstoachieveclimateneutralityby2045,itisestimatedthatthecountry’shydrogenAgoraEnergiewendeandAgoraIndustry(2021).Note:Finalenergydoesnotincludefeedstocksandothernon-energyuse;ETC=EnergyTransitionCommission;BNEF=BloombergNEF;IRENA=InternationalRenewableEnergyAgency;IEA=InternationalEnergyAgency.Finalenergyﬁgurestakenfromrespectivesources.Estimatesofglobalhydrogendemandin2050byselectedscenariosFigure20%5%10%15%20%25%30%020040060080010001200ETCHydrogenCouncilBNEFGreenClimateIEANetzeroIRENA1.5FinalenergyshareDemand2050[MtH₂]IndustryTransportPowerBuildingheatFinalenergyVariability[MtH₂]0100200300400500600IndustryTransportPowerBuildingheatAgoraIndustry12InsightsonHydrogen–ArgentinaEdition8demandwillreach1.9MtH₂by2030and7.9MtH₂by20454(Prognos,Öko-Institut,WuppertalInstitut,2021).However,Germanywouldneedtoimportmorethantwo-thirdsofitshydrogendemand,mak-ingitoneofthemostimportantPtXimportmarketsintheEU.Argentina’sroleinthecurrentglobalenergycrisisGlobalfossil-fuelpriceshaverisenrapidlysince2021.ThesituationhasbecomeevenmorecriticalsinceRussia'sfull-scaleinvasionofUkraine,whichhashadamajorimpactonnaturalgaspricesandhashelpedtriggeraglobaleconomicrecessionthathasbeenmarkedbyhighinflationanddecliningfoodandenergysecurity.TheimpactinEuropehasbeensevere:thepriceofnaturalgashasreachedrecord4Originalvaluescorrespondto63TWhby2030and265TWhby2045.Calculationbasedonlowheatingvalue(LHV)forhydrogenof33.3kWh/kgpricesupto70USDpermmbtu,creatinguncertaintyintheregion’senergysupplyandaffectingtheglobalnaturalgasandLNGsupplychain.Highnaturalgaspricesarealsohurtingtheindustrialsector.Euro-peancompaniesarewonderingwhethertohaltoperations,andcertaincommoditiesmanufacturedfromnaturalgassuchasammoniaandsteelreachedrecordpricesin2022.Forinstance,globalfertiliserpriceshavetripledsincemid-2020.Thiswillhaveasustainedimpactonglobalagriculturalproduction(IEA,2022b).Argentina’sabundantenergyresourcesprovidethecountrywithauniqueopportunitytobecomeakeyplayerinaddressingtheglobalenergycrisis.Argen-tinacancontributetothediversificationoftheglobalsupplychainforfertilisersandotherPtXproductswhilealsoalleviatingpressureonnaturalgasroutesaffectedbytheinvasionofUkraine.Inthisway,Argentina’srenewableandfossil-energyresourcescanmakeasignificantcontributiontoaddressingtheglobalenergycrisis,whilepositioningthecountryasaglobalhubforPtXproducts.IMPULSE12InsightsonHydrogen–ArgentinaEdition912InsightsonHydrogenforArgentinaArgentinahaslargeuntappedenergyresourcescapableoffulfillingthecoun-try’senergyneedsRenewableenergycanmitigatethecountry’sdependenceonfossilfuelsandopenupopportunitiestodevelopamoresustainableindustrialsectorandmoreproductioncapacityforrenewablehydrogenandPtXproducts.EnergyandpowergenerationinArgentinaisheavilydominatedbyfossilfuels,withnaturalgasplayingacriticalrole.However,thecurrentinfrastructuredoesnotallowthecountrytofullyutiliseitsresources.Forinstance,thecountrymustimportLNG,diesel,andfueloilduringthewintermonthswhenenergydemandishigh.Figure3showsArgentina’senergytradebalance.Itcanbeseenthatenergyimportsarestillasignificantcostforthecountry.Argentinacanstrengthenitsenergysecuritybydiversifyingitsenergymatrixsothatagreatervarietyofsourcesisavailabletomeetenergydemand.EstimatesputthetotalgrossresourcepotentialofArgentina’ssolarPV,wind,hydro,andgeothermalenergyat29000TWh/year,ledbysolarPV(57per-cent)andwindpower(42percent)(IDB,2017).Likewise,IRENA’sestimatesofArgentina’srenewableenergypotentialcomparedtotheglobalaverageplaceitatthehighendforsolarandwind(IRENA,2022b).Thecountry’suntappedpotentialforrenewablescanAgoraEnergiewende,AgoraIndustryandFundaciónTorcuatodiTella(2023)basedonINDEC(2023)Argentina'senergytradebalanceFigure3-15000-10000-5000050001000020002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022e[USD/MWh]Exports(CIF)Imports(CIF)Balance(Exports-Imports)1DiversifyingtheenergymatrixwithrenewableenergywillunlockArgentina’shydrogenpotentialAgoraIndustry12InsightsonHydrogen–ArgentinaEdition10significantlyhelpmeetrisingenergydemandamidincreasinglevelsofelectrificationandrenewablehydrogenproduction.FurtherREdevelopmentcanbringimportantbenefitstothecountryRenewableenergydevelopmentinArgentinacanenhanceenergysecurityanddecreasetheneedforelectricitysubsidies.Forone,renewableenergycanhelptomitigatetheimpactoffuelpricesontotalsystemcosts–themaincontributortoelectricitypricesinArgentina,asshowninFigure4.Areductionintheelectricitypricewouldreducethegapcoveredbysubisidies,mitigatingthispublicexpense.Addi-tonally,itwouldprovidetheindustrialsectorwithlowerelectricityprices,facilitatingelectrificationanddecarbonisation.In2021,electricitysubsidiestobridgethegapbet-weenhouseholdtariffsandsystemcostsamountedto1.8percentofArgentina’sGDP,withelectricitytariffsforhouseholdscoveringonly37percentoftotalsystemcosts(CAMMESA,2021).Subsidylevelsareexpectedtobelargerin2022giventheglobalcrisisinfossil-fuelprices.Thegapbetweentariffsandtotalsystemcostsislikelytoincreaseduetothedepend-encyofelectricitypricesonfuelcostsandtovolatileforeignexchangerates(mainlybetweentheUSdollarandtheArgentinianpeso).Powerpurchaseagree-ments(PPA)withsomegeneratorsinArgentinaareinUSdollars.Likewise,thecostsofdomesticnaturalgasandimportedfuels(LNGandliquidfossilfuels)areAgoraEnergiewende,AgoraIndustryandFundaciónTorcuatodiTella(2023)basedonCaratori(2022)SummaryofsystemcostsforpowergenerationinArgentinaFigure40102030405060708090100202020212022[USD/MWh]HydrobaseNuclearThermalspotThermalPPAsRenewablePPAsTransmissionFuelsImports4.13.63.63.83.62.68.68.39.115.213.912.06.68.89.718.932.246.40.44.359.6+22%+23%72.589.42.10.31.71.8IMPULSE12InsightsonHydrogen–ArgentinaEdition11Infobox1:Mitigatingcarbonemissions–Argentina’sclimatecommitmentsArgentinaratifiedtheParisAgreementinSeptember2016,obligatingittoprepareandcommunicateNationallyDeterminedContributions(NDCs).TherevisedNDCsubmittedbyArgentinain2021raisedthecountry’sambition.Thenewtargetistokeepnetemissionsbelow349MtCO₂eby2030.Thisis26percentlowercomparedtotheNDCsubmittedin2017(483MtCO₂eby2030).Additionally,Argentinahascommit-teditselftomakeeffortstoachievenet-zeroemissionsby2050.Theenergysectoristhelargestcontributorofcarbonemissions,makingupmorethanhalf(51percent)ofArgentina’stotalGHGemissions(energygeneration,consumptionandfugitiveemissions).Mostoftheenergy-sectoremissionsariseprimarilyfromthecombustionoffossilfuels.Thesecondlargestcontribu-tortoArgentina’semissionsisagriculture,forestryandotherlanduse(AFOLU;39percent),followedbyindustrialprocessesandproductuse(IPPU;6percent).Theremaining4percentcomesfromlandfillemissions.Source:MAyDS,2022alsotransactedinUSDdollars.Thecrisisinglobalfossil-fuelpricesandtheeffectofclimatechangeonArgentina’shydrogenerationhavefurtherexacer-batedtheproblem,especiallyduringwintermonths.InJuly2022,totalsystemcostsincreasedby75per-cent.Forindustry,thesituationiscriticalaswell.Thesectordoesnotreceivesubsidiestodefrayelectricitycosts,soindustrialusersmustfullycoverincreasesintotalsystemcosts.Greaterpenetrationbyrenewablescouldreducetotalsystemcostsbyreducingfuelconsumption.ItcouldalsoreducetheaveragecostofgenerationasrenewablePPAsaresignedbelowaveragesystemcosts.Decarbonisingtheenergysectorwillrequiretheuseofotherlow-carbontechnologiesArgentinacouldadoptaseriesofstrategiestoreduceitsdependenceonfossilfuelsandtolowerenergy-sectoremissionsinlinewithitsclimateagreementsanditsambitionofachievingnetzeroby2050.ThiswouldalsocontributetoenergysecuritybyreducingtheneedtoimportliquidfossilfuelsandLNG.Thetransportsectorcurrentlyconsumeslargeamountsofliquidfossilfuels(seeFigure5).Tech-nologiessuchaselectricvehicles(seeInfobox2)couldfacilitateitsdecarbonisationandenhanceotheraspectsofsectorcouplingtoincreasetheflexibilityoftheenergysector.Theresidentialsectorisalargeconsumerofnaturalgas,makingup70percentofenergyuseinthesectorin2021–primarilyforwater,spaceheating,andcooking.ArgentinahasthehighestpenetrationofnaturalgasintheresidentialsectorinLatinAmericaandtheCaribbean.Naturalgasiscriticalduringthewintermonthsduetohighheatingdemand(sieLAC-OLADE,2022).Theintroductionoflow-carbontechnologiesinthissectorsuchasheatpumps,electriccookers,solarwaterheaters,etc.,canhaveaseriesofpositiveimpacts,suchas(1)diversifyingthesector’senergysupply,therebyincreasingenergysecurity;(2)increasingthepenetrationofrenewableenergyinpowergenera-tion(centralisedanddistributed)andinheating;(3)integratingend-usesectorstoenhanceflexibil-ityinthepowersector;and(4)contributingtoemissionsmitigationinthesector.Thepromotionoflow-carbontechnologiesinthesectorshouldbeAgoraIndustry12InsightsonHydrogen–ArgentinaEdition12FTDT(2020)FuelshareintheﬁnalenergyconsumptionpersectorFigure50%20%40%60%80%100%19601965197019751980198519901995200020052010201520200%20%40%60%80%100%196019651970197519801985199019952000200520102015202019601965197019751980198519901995200020052010201520200%20%40%60%80%100%0%20%40%60%80%100%19601965197019751980198519901995200020052010201520200%20%40%60%80%100%19601965197019751980198519901995200020052010201520200%20%40%60%80%100%1960196519701975198019851990199520002005201020152020ElectricityNaturalgasandLPGOthers(mostlyliquidfossilfuels)ResidentialTransportIndustryCommercialAgricultureTotalFinalEnergyConsumptionIMPULSE12InsightsonHydrogen–ArgentinaEdition13combinedwithstrategiestofurtherpromoteelectrificationwithrenewablesandenergyeffi-ciency.5Tomaximisebenefits,REdevelopmentshouldaccompanyhydrogenproductionThepromotionofrenewableenergyinArgentinacanhaveanumberofpositiveimpactsonthecountry’senergysector.Inaddition,renewableenergyisatthe5ThePtXHubinArgentinahasdevelopedtheAllocationScenariosproject.ItcomprisesarangeofdetailedenergytransitionpathwaysforArgentinathrough2050.ThepathwaysshowhowhydrogenandPtXproductscancontributetothedecarbonisationofpower,heat,transportandindustrialsystemsinthecountry,includingexports.Thedevelopedpathwaysaredesignedtohelpprioritisedevelopmentstrategiesinthecountry’senergysector.coreofrenewablehydrogendevelopment.Argentina’srenewableenergyresourcesmeanthatithasthepotentialtobecomealeaderinhydrogenandPtXtrade.Theexpansionofrenewableenergyandtheintro-ductionoflarge-scalehydrogenproductionwillrequiresignificantinvestmentinthecountry’senergyinfrastructure.Accordingly,itisimportantthattheseeffortsbecoordinatedinordertomaximisetheirbenefitswithoutaffectingdecarbonisation.Initialoff-gridrenewablehydrogenproductionmightserveasakick-offforthecountry’shydrogeneconomy,butoverthemediumtermconsiderationshouldbegiventointegratingtheseprojectsintotheoverallenergysector.ThiswouldstrengthenArgenti-na’sdecarbonisation,sectoralintegration,andenergyflexibilityasitdevelopsahydrogeneconomy.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition14TheroleofhydrogeninfutureenergysystemsAroundtheworld,countriesareraisingtheirclimateambitionsbysettinglong-termnet-zerotargets.Argentinaisnoexception,havingcom-mittedtomakeeffortstoachievecarbonneutral-ityby2050.Manystudieshaveanalysedthepathwaystoachievingglobalnet-zeropledgesbymid-century.Mostofthesestudiesagreethatthedeploymentofrenewableenergywillmakeupthelargestpartoftheenergytransition.Forinstance,IRENA’s1.5CScenarioshowsthat90percentoftotalglobaldecarbonisationin2050willinvolverenewableenergythroughdirectpower,electrifi-cation,efficiency,bioenergywithCCS,andrenewablehydrogen.However,hydrogenwillcontributetomitigatingonly10percentoftotalglobalemissionsby2050(IRENA,2022).Likewise,theIEA’snet-zeroemissionsscenariohighlightstheroleofelectrificationinthedecarboni-sationoftheglobalenergysector.Thisscenarioprojectsthatelectricitywilldominateenergyuseintheend-usesectors,accountingformorethanhalfoftotalfinalconsumptionby2050(IEA,2022c).Despitethesignificantroleofelectrificationinglobaldecarbonisation,someapplications–mostofthemintheindustrialandtransportsectors–cannotbeelectrified,entailingrelianceonhydrogenanditsderivatives.However,theproductionofrenewablehydrogenwillrequireasignificantamountofrenew-ableenergydeployment,asillustratedinFigure6.Due2TheroleofhydrogenforclimateneutralityiscrucialbutsecondarytodirectelectrificationAgoraEnergiewendeandAgoraIndustry(2023)basedonBNEF(2022);DNV(2022a);HydrogenCouncil(2022);IEA(2022b);IRENA(2022);Riemeretal.(2022)Renewableelectricityneededtoproducerenewablehydrogeninglobalscenariosfor2050Figure6DNVHypat2022IEANZEWoodMackenzieBNEFNZEIRENA1.5CHydrogenCouncilETCSupply-side0500010000150002000025000300003500001002003004005006007008009001000[TWh]RenewableH₂[MtH₂/year]2019globalelectricitydemandIMPULSE12InsightsonHydrogen–ArgentinaEdition15to30percentenergylossesincurredduringhydro-genproductionandotherenergylossesduringuse,hydrogencanbeasmuchas84percentlessefficientthanheatpumpsindeliveringlike-for-likeenergyfordirectelectrificationintheresidentialsector,orasmuchas60percentlessefficientthanbatteryelectricvehiclesinthetransportsector.Renewablehydrogenrequires2to4timesasmuchrenewableenergycapacitytoachievethesamefinalenergyuseasdirectelectrification.Therefore,hydrogenisakeycompo-nentinglobaldecarbonisation,butitissecondarytoelectrificationinthenet-zeropathway.Aclearsetofno-regrethydrogenapplicationsScalinguphydrogenproduction,whetherinArgen-tinaorelsewhere,willrequirelargeamountsofinvestment.Again,renewablehydrogenproductionwilldemandawidedeploymentofrenewableenergycapacity.Hence,itisnecessarytoprioritisehydro-genusetoapplicationswherehydrogenistheonlydecarbonisationoption.Likewise,hydrogenoughtnottocompetewithothermoreefficientdecarboni-sationtechnologiessuchasheatpumpsorelectricvehicles.Toachievea1.5-degreeworld,hydrogenmustcomplementlarge-scaleelectrificationandtheefficientdeploymentofwindandsolar,backedupbygeothermal,nuclear,hydroandstorage.AsshowninFigure7,Agorahasdevelopedanoverviewofthedifferenthydrogenapplicationsthatshouldbeprioritisedacrossdifferentend-usesectors.Theseapplicationshavebeenidentifiedbasedonareviewofprominentenergysystemscenarios.ThissetofapplicationsaimstoprovideaguidelineforpolicymakersdevelopingcountryAgoraEnergiewendeandAgoraIndustry(2021)NeedformoleculesinadditiontogreenelectronsFigure7Greenmoleculesneeded?IndustryTransportPowersectorBuildingsNo-regret·Reactionagents(DRIsteel)·Feedstock(ammonia,chemicals)·Long-haulaviation·Maritimeshipping·Renewableenergyback-updependingonwindandsolarshareandseasonaldemandstructure·Heatinggrids(residualheatload)Controversial·High-temperatureheat·Trucksandbuses·Short-haulaviationandshipping·AbsolutesizeofneedgivenotherﬂexibilityandstorageoptionsBadidea·Low-temperatureheat·Cars·Light-dutyvehiclesAfterusingrenewableenergy,ambientandwasteheatasmuchaspossible.Especiallyrelevantforlargeexistingdistrictheatingsystemswithhighﬂowtemperatures.NotethataccordingtotheUNFCCCCommonReportingFormat,districtheatingisclassiﬁedasbeingpartofthepowersector.SeDependingondistance,frequencyandenergysupplyoptionsriesproductioncurrentlymoreadvancedonelectricthanonhydrogenforheavydutyvehiclesandbuses.Hydrogenheavydutytobedeployedatthispointintimeonlyinlocationswithsynergies(ports,industryclusters).·Trains·Building-levelheatingAgoraIndustry12InsightsonHydrogen–ArgentinaEdition16strategiesandroadmapsforspecifichydrogenuses.ForArgentina,heatinggridsandrenewableenergyback-upsmightnotseemlikerelevantapplicationsgiventhedecentraliseddevelopmentinthecountry’sheatingsectorandtheflexibilityprovidedbyhydro-powerandnaturalgas-basedgeneration.However,dependingonthecountry’senergy-sectorpathway,theseapplicationsmighthavemorerelevanceinthefuture.Electronsandmoleculestodecarbonisethecountry’seconomyArgentina’shydrogenproductionhasalargepotentialtodecarboniseitsdomesticdemandandproducehydrogenforexporttolargerenergy-intensiveregionssuchastheEuropeanUnionandEastAsia.Asmentionedabove,LatinAmericancountriesdonothavealargehydrogendemand,butthisdemandisanticipatedtoincreaseinthecomingyearsastheindustrialsectorlooksforfossil-fuelalternatives.IEAestimatesthehydrogendemandintheregionwillincreaseby67percentby2030,reachingaround6.8MtH₂.Theuseofhydrogenwilltendtodecreaseinoilrefiningbutincreaseinthechemical,steel,cement,andtransportsectors.ThecurrentmomentpresentsanopportunityforArgentinatomakeitsindustrialsectormoresustain-ablewhilediversifyingitseconomicactivitiesandgeneratinggrowth.TheproductionofrenewablehydrogeninArgentinacanbeprioritisedsoastoexpandtheindustrialuseofPtXproductssuchasgreenammonia,e-methanol,andsyntheticfuels,alongwithhighervalue-addedproductssuchasgreenfertilisersandgreensteel.Byincreasingtheproductionofgreenmoleculesandproducts,Argen-tinacanactivelyparticipateininternationalmarkets,whichareincreasinglyprioritisingthesematerials.First,however,Argentinaneedstocarefullybalancetheuseofnaturalgasandrenewablesasitdevelopsitsdomesticindustry.OneoptionistoprioritisetheexportofPtXproducts,whileusingnaturalgaslocally,withtheaimofswitchingtorenewablesassoonaspossible.Thelarge-scaleproductionofrenewablehydrogencanalsocreateamoredynamicrenewableenergymarketandpromoteitsuseinthepowerandindustrialsectors.Thesustainabledevel-opmentofindustrybasedongreenproductswillmodernisethesectorandmakeitmoregloballycompetitive.TheproductionanduseofPtXproductswillbringimportantsocio-economicbenefitstothecountrysuchasjobcreation,increasedfoodsecurity(throughfertilisers),andimprovedpopulationwelfare(bymitigatingenergypovertyandimprovinghealthconditions).Newhydrogenandrenewableenergyprojectswillneedtoconsiderlocalcommunities,protectedareas,wateraccess,andotherimportantfactorstoensureajustandfairtransition,especiallyinregionswithahighrenewableenergypotential.Therefore,hydrogendevelopmentwillneedtohaveacomprehensiveEESGframeworktomaximisethesepotentialbenefits.IMPULSE12InsightsonHydrogen–ArgentinaEdition17Argentina’sexistingenergyinfrastruc-turelimitsitspotentialTheupscalingofahydrogeneconomywillrequiretheimprovementofthecountry’sexistingenergyinfrastructureinordertofullyutiliseitsenergyresources.Argentina’senergyplannerswillalsoneedtoconsiderthepotentialupcomingon-gridandoff-gridrenewableandhydrogenprojects,toensuretheirproperintegrationintothesysteminthelongterm.Theimpactsandbenefitsofthefurtherintegra-tionofrenewableenergyandhydrogenprojectsneedtobeassessedsothatappropriatemeasurescanbetakenthatguaranteeflexibleoperation.Thecountry’scurrentenergyinfrastructureisalimitingfactorforthefurtherdevelopmentofpowergeneration,bothfossilandrenewable.Scalinguphydrogenproductionwillplacehigherdemandsonthepowergrid.Forinstance,renewablehydrogenwillrequireawidedeploymentofrenewableenergyconnectedtothetransmissiongrid.Thisisoneofthemainchallengesforthefurtherdeploymentofrenewableenergyprojectsinthecountry.Renewa-ble-richregionsinArgentinasuchasPatagonia,thesouthernandAtlanticareasoftheProvinceofBuenosAires,theNorthwest,andCuyowillrequiresignifi-cantinfrastructureinvestmentstoexpandhigh-voltagetransmissioncapacity.OnlythenwilltheseregionsbeabletoacceptmorerenewableenergyprojectsandtransporttheenergytodemandcentressuchastheGreaterBuenosAiresarea(CADER,2022).Consideringtheoperationalrequirementsofthesystem,Figure8showsthegridoperator’sproposalfortheexpansionoftheelectricalgridupto2026.ThegovernmentrecentlypublisheditsNationalElec-tricityTransmissionExpansionPlan.Theplanhasatimeframeuntil2035andaimstoprioritisesomeofthesegridworkstoincreasetransmissioncapacityby36percent(Secretariatofenergy,2023).TotalrequiredinvestmentisestimatedataroundUSD4.5billion.Inthelongterm,theupscalingofrenewableenergyinArgentinawillrequirefurtherimprovementstotheoverallelectricityinfrastructuretoallowagreaterintegrationofrenewableenergysources.Itwillalsoneedmoreancillaryservicesthatincreaseflexibility.TheexistinggasinfrastructureoffersaclearadvantageArgentinaalreadyhassignificantnaturalgasinfra-structureconsistingofpipelinesandLNGportsforimportsandexports.ThesecouldeventuallyberetrofittedforthetransportofhydrogenandPtXproducts.However,theexistinggasinfrastructurecannotconnectresourceareaswithlocaldemandcentresandinternationalmarkets.Likewise,thedistributionnetworkswouldnotbeideal,asresiden-tialusedoesnotrepresentanexpedientapplicationforhydrogen.Here,naturalgasresourcesaremorecompetitiveandefficient.However,inthelongtermotherlow-carbontechnologies(heatpumps,solarwaterheaters,etc.)shouldbeconsideredtomitigateemissionsinthesector.Thecountry’sgaspipelinenetworkisextensive,totallingaround98000km.Themajorityofthisnetwork(82337km)isusedforgasdistribution,predominantlytohouseholds.ThecountrycurrentlyhastwoLNGterminals–EscobarandBahiaBlanca(thelatterwasreactivatedin2021).ArgentinaalsohasinterconnectedpipelineswithChile,Bolivia,Brazil,andUruguay.Atthesametime,theexistinginfrastructureisoneofthefactorsrestrictingincreasednaturalgasproduc-3Energyinfrastructureshouldbeprioritised,andhydrogenproductionshouldbeincludedinlong-termdevelopmentplansAgoraIndustry12InsightsonHydrogen–ArgentinaEdition18tioninthecountry.Asaresult,theproductionlevelshaveremainedthesamesincetheearly2000s.AnewpipelineprojectiscurrentlyunderconstructionthatwillconnectNeuquénandtheunconventionalhydro-carbonsresourcesinVacaMuertatotheprovinceofBuenosAires.Thefirstphaseofthisprojectwillincreasenaturalgastransportby25percent,elimi-natingtheneedforfuelimports.Asecondphaseisstillawaitingfinancialsupport.Otherpipelineex-pansionprojectsaretakingplaceelsewhereinthecountry.Itisimportanttonotethatfuturenaturalgasinfrastructureprojectswillneedtobecarefullyassessed.Asglobaldecarbonisationcontinuesoverthecomingdecades,thedemandforhydrocarbonswillfall.Thiscouldleadtostrandedassetsfornewfossil-fuelprojects.Transener(2022)PlanstoexpandArgentina’stransmissiongridby2026Figure8Transener(2022)PlanstoexpandArgentina’stransmissiongridby2026FigureDELESTEROSANTIAGOSALTARÍONEGROLAPAMPACHUBUTNEUQUÉNCATAMARCALASANLUISCÓRDOBATUCUMÁNJUJUYBUENOSCORRIENTESRÍOSENTRESANTAFECHACOFORMOSAMISIONESMENDOZAISLASMALVINASTIERRADELFUEGOSANTACRUZAIRESRIOJASANJUANTransformerstation500kV500kVexistingandprojectedlinesNewlinesby2026ShuntcapacitorbankSeriescapacitorbankURUGUAYBRASILBOLIVIACHILEPARAGUAYARGENTINAIMPULSE12InsightsonHydrogen–ArgentinaEdition19PortsandtradeexperiencewillplayamoreprominentroleIfArgentinaistobecomeanexporterofhydrogenandPtXproducts,thiswillrequiregoodcoordinationwiththeexistingtradesystem,especiallywhenitcomestoports–wheremostofthestorage,transport,andproductionwilltakeplace.Argentina’swidetradingexperienceandinfrastructurewillbeanimportantassetwhendevisingtheexportplansforPtX.Like-wise,theambitionofupscalinghydrogenproductionandtradewillrequiretheexpansionandretrofittingofexistinginfrastructure.AligningportexpansionswithhydrogenandPtXambitionswillbecrucialforamplifyinginfrastructureinvestmentsandproducingco-benefitssuchastheuseoflow-carbontechnolo-giesintrade.Argentinahasalongseacoastandanextensivenetworkofnavigableinlandwaterways.Neverthe-less,mostofthewatersarefairlyshallowandrequireconstantdredgingandmaintenance(Palomar2011).Some185milliontonsofcargoarehandledannuallybyonehundredportfacilitiesacrossthecountry.MostofArgentina’sgrainandcontainercargoishandledbyportslocatedontheSantaFe-OceanTrunkInlandwaterway.TheportactivityalongthecoastalregionoftheBuenosAiresprovinceconsistsmostlyoffuels,agribulks,fertilisers,andtoalesserextent,containers(WorldBank,2022).Bycontrast,theportsalongthePatagonianseacoastarelowdensityandhighlyspecialised–mostlyforcabotagetrafficsuchasliquidbulkhydrocarbons.ThePortsModernisationPlandevelopedbytheMinistryofTransportincludesanewterminalandcargodockintheportofUshuaia.Italsoincludesplansfortheexpansionandmodernisationofvariousexistingportsanddescribesdredgingprojectstoensurenavigableconditions(MinistryofTransportofArgentina,2023).Inaddition,severalprivate-sectorinfrastructureprojectshavebeenannounced.6However,forthemostpartArgentina’sexpansionplansdonotspellouttherolethatnewportinfra-structurewillplayinthedevelopmentofahydrogenvaluechain.Ifsuchachainistomaterialise,thecountry’slong-termstrategicplansmustindicatethelocationofnewhydrogenindustrialhubs,projectionsforPtXexports,andotherkeyinformation.6YPFandPetronashaveannouncedthedevelopmentofanLNGproductionandexportportintheBahiaBlancaregion.Similarly,theAustraliancompanyFortescueannouncedthedevelopmentofaportintheRioNegroprovincededicatedexclusivelytotheexportofhydro-genandPtX.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition20ArgentinaasahubforPtXproductsThankstoitsabundantrenewableenergyresources,Argentinahasoneoftheworld’sgreatestpotentialsforthedevelopmentofrenewablehydrogenandPtXproducts.Forinstance,theGlobalPtXAtlasfindsthat80percentoftheidentifiedglobalareawithpotentialtoproducePtXisconcentratedinjust10countries.Argentinahastheworld’sthirdlargestpotential,aftertheUSAandAustralia.Thispotentialhasbeenidentifiedwithregardnotonlytorenewableenergy,butalsotowateravailability,whichiskeyintheelectrolysisstepforrenewablehydrogenproduction(FraunhoferIEE,2021).TheidentifiedPtXsitesinArgentinaincludeanexten-sionofmorethan150000km2forhybridsitesusingwindandsolarPV,followedbyabout48000km2forsitesusingwindonlyandmorethan26000km2forsitesusingsolarPV(Fraunhofer,2021).AsshowninFigure9,thePtXproductwiththegreatestpotentialisammonia.ThisisfollowedbymethanolandFischer-Tropschproducts(syntheticfuels).Gaseousandliquidhydrogenhavethepotentialtobeusedmainlyatthelocallevelandtoacertainextentattheregionallevel,giventhecostsandlimitationsoftransport.Argenti-na’sinterestinexportingoverseaswouldbemorecost-effectivethroughPtXormorevaluableproductssuchasgreenfertilisers,greensteel,etc.Fraunhofer’sassessmentdoesnotconsiderothereconomicaspectsorcomplementaritieswithotherenergysources.Forexample,thecountry’sagricul-turalsectorcanalsoincreaseitsgreenammoniaFraunhoferIEE-PTXAtlas(2022).Note:PTXAtlasestimatestheaggregatedPtXgenerationvolumesbasedontheidentiﬁedPtXpotentialareasinthecountryandusingsite-speciﬁcexpansionanddeploymentoptimizations.PtXpotentialgenerationvolumesforArgentina,hightemperatureelectrolysisFigure9PtXAmmount[Mt]0300200100FischerTropsch(Diesel,Kerosene)MethanolAmmoniaHydrogenHybridWindPV4ArgentinahasthepotentialtobecomeakeyglobalexporterofPtXproducts;itmustensurethatproductionisaccompaniedbythedecarbonisationofdomestichydrogendemandIMPULSE12InsightsonHydrogen–ArgentinaEdition21potentialforfertiliserproduction.7Inaddition,theexistingbioenergyindustryhasthepotentialtobeagoodsourceofsustainablecarbonforsynthetichydrocarbons(e.g.,Fischer-Tropschore-Methanol).HydrogenasatooltoboostasustainablefertiliserindustryThecurrentproductionoffertilisersinArgentinadoesnotcoverlocaldemand.Hence,thecountrymustimportmorethan60percentofitstotalconsumption.Thisresultedinexpendituresof2.3billionUSDin2021,withattendantimpactstothebalanceoftrade.Intheperiodbetween2010and2020,fertilisercon-sumptioninArgentinaincreased4.6percentannuallyonaverage(BolsadeComerciodeRosario,2021).Thecountry’sgrowingdemandforfertilisers,togetherwiththehigherinternationalpricesin2022,indicatethatthenegativeimpactonArgentina’sbalanceoftradewillbeevenmoresignificantthaninpreviousyears..Argentinacouldestablishstrategiestopromotethelocalproductionoffertilisersusinggreenammonia.Thiswoulddecouplefertiliserproductionfromthepricevolatilityofnaturalgas,anditwouldpositionthecountryasapotentialexporterofsuchproductsregionallyandglobally.Theexpansionofammoniapro-ductioncapacityinArgentinacouldconsidernaturalgastobeabridgetechnology,butitshouldprioritisetheuseofrenewablehydrogen.Thiswillbringimportantsocio-economicbenefitstothecountryintermsofjobscreation,foodsecurity,andindustrialdecarbonisa-tion.TheinternationalcommunitycouldalsobenefitbecausetheexpansionoffertiliserproductioninArgentinacouldeaseupwardpressureonfoodpricesandmitigatethedemandfornaturalgas.Thepolicy7AmoredetailedpolicyanalysisfortheproductionofgreenammoniaandfertilisersinArgentinacanbefoundinthepolicybrief“Argentinaasahubforgreenammonia:Aforward-lookingdevelopmentstrategyforaddressingtheglobalenergyandclimatecrises”.https://www.agora-energiewende.de/en/publications/argenti-na-as-a-hub-for-green-ammonia/brief“Argentinaasahubforgreenammonia”providesamoredetaileddiscussionofpotentialnextstepsforpromotingtheuseofrenewablehydrogeningreenammoniaandfertiliserproduction.DecarbonisingArgentina’senergy-intensiveindustryHydrogencanhelptoenablesustainableindustrialgrowthinArgentinabyexpandingthesectortocoverlocaldemandandforeignexports.Asmentionedearlier,fossil-basedhydrogenwithCCScouldbeusedasatransitiontechnologytoboostthesector,butinthelongrunindustrialstrategiesshouldprioritiserenewablehydrogen,especiallyforexportproductsintheinternationalgreenmarket.Theexpansionoftheindustrialvaluechainshouldleverageexistingdecarbonisationstrategiestopromotethedecarboni-sationofthelocalsupplychainandkeeptheindus-trialsectorcompetitive.TheArgentinianindustrialsectorrepresentsaround6percentofthecountry’stotalGHGemissions,whichamountedtoaround21MtCO₂ein2018.Theseemissionsincludethosefromchemicalreactionswhenusingnaturalgasasafeedstockinindustrialprocesses.TheNationalActionPlanforIndustryandClimateChange(PANIyCC)proposesaseriesofmitigationmeasuresfocusingonenergyefficiency,renewableenergy,thecirculareconomy,andemis-sionscapture.ThesemeasuresaimtopromotetheuseofsolarPV,solarthermal,andwindinindustrialprocesses.Additionally,theplanproposestheuseofbiodigesterstoproducebiogasinindustriesasameansofsavingenergy.Oneoftheplan’smeasuresintroducesalternativefuelsinthecementindustry.ThereisstillaneedforbettercoordinationandmoresustainablepracticesinArgentina’ssteel,chemicals,andcementindustries.Contemplatingclearactionsforelectrification,modernisation,andtheuseofhydrogencouldserveasanimportantstepinpromotingthesectorwhiledevelopingthelocalhydrogenmarket.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition22Hydrogen-fuelledtransport–willfuel-cellcarsplayarole?Fuel-cellelectriccarswereonceseenaskeyforthedecarbonisationofthetransportsector.Butthistech-nologyhasbeenlosingtheraceagainstbattery-elec-triccars,whichtodaycompletelydominatethemarket,asshowninFigure10.Itisexpectedthatthemarketwillseesomehydrogenvehicles,especiallythosebuiltforheavy-dutypurposesinlong-rangefreightandconstruction.Inparticular,hydrogenwillplayakeyroleinthedecarbonisationoftransportintheminingsector,becauseitisoneofthefewviablealternativefuelsforminingvehicles.Indeed,mininghaultrucksareoneofthesixprioritisedapplicationsforhydrogeninChile’sgreenhydrogennationalstrategy.Argentina’scurrentminingsectorisnotasextensiveasChile’s.Nevertheless,hydrogencouldbeanoptioninhelpingtodecarboniseitslithiumminingsectorasglobaldemandforthemetalsurges.Hydrogencouldplayaroleinsomefreightvehicles,butbatterytechnologyisdevelopingfast.Itisex-pectedthatbattery-electrictruckswillcarryoutmostoftheworld’sfreighttransport,asshowninFig-ure11.Thisisbecausearound80percentofthedailydrivingdistanceislessthan400km,wellwithintherangeofbatterytechnology.InArgentina,hydro-gen-fuelledheavytruckswillhavetocompeteintheshortandmediumtermwithothertechnologiessuchBloombergNEF(2022)BEVvs.FCEVannualsalesFigure1001.02.03.04.05.0[USDmillions][USDmillions]01.02.03.04.05.0201020112012201320142015201620172018201920202021201020112012201320142015201620172018201920202021BEVFCEV5ThepotentialfuturemarketforhydrogenvehiclesisshrinkingdailyIMPULSE12InsightsonHydrogen–ArgentinaEdition23AgoraEnergiewendeandAgoraIndustry(2021)Distributionofheavytrucksbydailydrivingdistance,2050Figure110.00%0.05%0.10%0.15%0.20%0.25%02004006008001000Dailydrivingdistance[km]ProbabilitydensityFCEVBEVInfobox2:DecarbonisingArgentina’stransportsectorTherearecurrentlygreatambitionstomakeArgentina’stransportsectormoresustainable.Onekeystrategyinpursuitofthisobjectiveisshapinguptobetheadoptionofelectricvehicles.TheChamberofDeputiesiscurrentlydiscussinganelectromobilitylawtoprovidethenecessarylegalframeworkforthesector’sstructureddevelopment.Thelawincludestaxincentivesfortechnologyandinfrastructure,aplantohaltthesaleofcombustionenginevehiclesinArgentinaafter2041,andthecreationofafundexclusivelyforsustainabletransport.Theprivatesectorisveryeagertodevelopelectrictransportinviewofthecountry’srenewableenergypotentialandlithiumreserves.Andtheindustrialsectorhasplanstomanufactureion-lithiumbatteriesinArgentina,whichwouldmaketheelectricvehiclemarketmorecompetitiveinthecountry.Inadditiontoelectricvehicles,itisimportanttoconsiderthebiofuelssector,whichisalreadywellestab-lishedinArgentina.Until2019,biofuelswerethemostsignificantmitigationmeasureforGHGemissions,avoidingaround4MtCO₂einthatyear.Ithasnowbeenovertakenbygrid-connectedrenewablesinthepowersector.Thebiofuelssectormayrequireadditionalreformstoaddresschallengesrelatedtocompeti-tion,includingmeasurestopromoteadvancedbiofuels,toopenthemarkettonewplayers,andtoimprovetheinternationalacceptanceofbiofuels.Source:MinistryofProductiveDevelopmentofArgentina,2021;Y-TEC,2021AgoraIndustry12InsightsonHydrogen–ArgentinaEdition24asbiofuels,compressednaturalgas,andliquifiednaturalgas,soitsdeploymentwillfaceevenmorecompetitionthaninotherregionsoftheworld.Hydrogen-basedpower-to-liquids(PtL)willcaptureshippingandaviationmarketsForothertransportmodes,suchaslong-rangeshippingandaviation,liquidfuelshavemanyadvantagesoverpurehydrogen,mostsignificantlyimprovedenergydensity,whichmakesthemastrongerfuel.InOctober2022,theaviationcommunitycommitteditselftoanet-zeropathwayfor2050.Low-carbontechnologiessuchashydrogenorbattery-electricaircraftcouldplayanimportantroleinmitigatingthenegativeimpactsofshort-haulandregionalaviationinthemediumtolongterm.Yetsustainableaviationfuels(SAFs)aretheonlydefos-silisedoptiononlong-haulroutesfortheforeseeablefuture.IntheWaypoint2050report,theAirTrans-portActionGroup(ATAG)presentsanoverviewoftheenergyoptionsthatcouldcontributetothenecessaryemissionsreductionsincommercialaviation.Itislikelythataviationwillneedbetween330–445milliontonnesofSAFsperannumby2050(ATAG,2021).ThedeploymentofPtLandSAFtechnologies,especiallyindevelopingcountriesandemergingeconomies,couldengenderpositivetrendsforsocialinnovation,jobscreation,andadvancededucation.Ultimately,thedevelopmentofthesetechnologieswilldependonlocalresources,contexts,andsustainabilityconsiderations.IMPULSE12InsightsonHydrogen–ArgentinaEdition25ProductionofPtXwillrequireCO₂asafeedstockCO₂willbeakeycomponentintheproductionofmosthydrogenderivatesandPtXproducts.Figure12showsthepathsforPtXproductionfromrenewablehydrogen.CO₂isclearlyneededtoproducefertiliserssuchasurea,syntheticfuelssuchase-kerosene,andchemicalproductssuchasmethanol.Itisimportant,therefore,thatArgentinaidentifiespotentialsus-tainablecarbonsourcesthatcanbeusedintheproductionofPtX.88UndertheumbrellaofthePtXHub,DECHEMA(theSocietyforChemicalEngineeringandBiotechnology)isleadingthedevelopmentofacarbonsourcestudyforArgentinathatwillhelptomappotentialcarbonsourcesfortheproductionofPtX.TheavailabilityandlocationofsuchcarbonsourceswillhaveaninfluenceinprioritisingthepathusedforPtXproductionandinidentifyingpotentialinfra-structureneeds,includingCO₂transporttoareaswithhighhydrogenpotential.ThelocationofcarbonsourcesinArgentinamightalsorequirebettercoordi-nationandcollaborationwithhydrogenproduction,asthiscouldamplifythecountry'spotentialfortheproductionofPtXproducts.Argentina’sbioenergyindustrycanprovideasustainablecarbonsourceFordecades,Argentinahashadawell-developedbioenergyindustry.TheindustrycanserveasanimportantsourceofsustainablecarbonfortheproductionofPtXproducts.ThefutureexpansionAgoraEnergiewendeandAgoraIndustry(2023)PathsfortheproductionofPtXproductsFigure12HeatOxygen(O)Water(HO)FinalusesRenewableelectricity→Steel→Reﬁneries→Powergeneration→Hightempera-tureheatanddistrictheating→Plastics→Shipping→Jetfuel→Fertiliserproduction→ShippingHydrogen(H)Methanol(MeOH)e-SustainableAviationFuelSyntheticNaturalGas(CH₄)+N(air)HaberBoschprocessUreasynthesisMethanolsynthesisMethanationprocess+sustainablesourceofcarbon(C)(Biogenic/DirectAirCapture)Ammonia(NH)UreaElectrolysisReverseWaterGasShiftreaction(rWGS)+Fischer-Tropschprocess6Argentina’sbioenergyindustrycansignificantlycontributetoitsPtXmarketAgoraIndustry12InsightsonHydrogen–ArgentinaEdition26ofthebioenergyindustry9inthecountrycanbeassessedbasedonthedevelopmentplansofthehydrogenindustry–boostingtheeffortsofbothindustriestocreatemorevaluableproductsfordomesticsalesandexport.Inaddition,biofuelscanbeintegratedwithotherpartsofthesupplychainforPtXproducts,suchasfuelforthetransportofgreenmolecules.Argentinahaswidelyusedbiofuelssince2006,whenitintroducedalawandregulatoryframeworkforbiofuels.Thecountryiscurrentlyoneofthelargestbiodieselexportersintheworld;one-thirdofitslocalproductiongoestotheinternationalmarket.Like-wise,asofSeptember2022,annualethanolproduc-tioninArgentinareachedapproximately95000cubicmeters.Ethanolismostlyproducedfrommaizeandsugarcane(SecretariatofEnergy,2022).Recentestimatesshowthattheavailablefeedstockcouldboostthecurrentinstalledcapacityby82percentinthecaseofbiodieselandby152percentinthecaseofethanol(Hilbert,etal.,2021).Overthemediumterm,atransitiontonext-generationbiofuelsneedstobediscussedandimplemented.Anappropriateregula-toryframeworkshouldbeconsideredtosupporttheirdevelopment.Ethanolproductionhasthepotentialtobecomeasustainablecarbonsourceforthemanufacturingof9Additionalbiomassdemandcomingfromthehydrogenindustrymustensurethatitdoesnotleadtoenviron-mentallyharmfulintensificationoflanduseortodirectorindirectchangesinlanduse,leadingtodetrimentaleffectsoneco-systemsandcarboncycles.PtXproducts.Meanwhile,biodieselproductionrequiresmoreresearchintotheuseofglycerine–asecondaryproductfrombiodieselproduction–asapotentialsourceofcarbon.Renewablehydro-gencanalsobeusedintheproductionofhydro-treatedvegetableoil(HVO),whichisanimportantdecarbonisationoptionfordieselfuelandtheaviationsector.ArgentinahasthepotentialofbecominganexporterofHVO,butthisrequiresensuringsustainableproductionpracticesthatdonotleadtodeforestationandothernegativeenvi-ronmentalimpacts.Policysupportfortheuseofanykindofbiofuelsneedstoconsiderdirectandindirecteffectsonclimateandbiodiversitythatstemfromtheproductionprocessandfeedstock.Minimisingharmtotheenvironmentshouldbeprioritised.TheProbiomasaprogrammefromFAOestimatesthepotentialbiogasproductioninArgentinaresultingfromfeedlots,dairy,swine,andvinasseat416ktoeperyear,mostlyconcentratedinfeedlots(44per-cent)andswineproduction(27percent)(FAO,2020).BiogascanbeintegratedintothePtXmanufacturingchainasasourceofcarbon.However,biogasproductionisusuallynotcentralised,anditwouldthusbenecessarytocoordinateeffortsinclusteringbiogasproductionsourcestomaximiseitspotential.AccordingtotheestimatesofbiogasproductioninArgentina,theprovinceofBuenosAireshasthelargestbiogaspotentialandasignificantwindenergypotential.TheseconditionscouldmakeitidealforthedevelopmentofaPtXindustry.IMPULSE12InsightsonHydrogen–ArgentinaEdition27Whatarethepotentialhydrogenmarketsofthefuture?Countrieswithcheap,abundantrenewableenergywillbeinabetterpositiontoengageinhydrogenproduction.Theriseoftradeinrenewablehydrogenwillhelptoreshapeenergygeopolitics,asmanycountriesthatarerichinrenewablesarelocatedintheGlobalSouth;renewablehydrogenexportwillprovideanopportunityfortheireconomicgrowthwhilealsoencouraginginternationalcooperationtokeeptheriseinglobaltemperaturebelow1.5°C.LargeenergyconsumerssuchasEuropeandtheAsia-Pacificregionwillnotbeabletosatisfytheirhydrogendemandwithdomesticproduction,andwillthusneedtoimportPtXproductsfromcountrieswithabundantrenewableenergyresourcesthatarecapableofproducingrenewablehydrogenanditsderivativesatacompetitiveprice.Figure13showsthepotentialglobaltraderoutesforhydrogen.ItalsoincludespotentialnewroutesconnectingotherregionssuchasLatinAmericawiththeAsia-Pacificregion.Argentina’sexportpotentialforPtXproductsislarge.Basedonprojectsunderdevelopment,IEAestimatesthatLatinAmericawillbetheleadingregionforlow-emissionhydrogenexportsby2030.Chile,Argentina,andBrazilleadexportcapacitiesintheregion,whichwillreachmorethan3MtH₂equiva-lents(IEA,2022).ThehydrogenmarketforArgentina7ArgentinashouldcontemplateitsroleinglobaltradetoensurethecompetitivenessofitsexportstoEuropeanandAsian-PacificmarketsIRENA(2022a)PotentialdevelopmentofhydrogentraderoutesgloballyFigure13ImporterNewroutesinplaceorunderdevelopmentExporterMoUsinplaceestablishingtraderoutesPotentialtraderouteexplicitlymentionedinpublishedstrategiesImportingregionExportingregionNorthAfricaAsiaPaciﬁcLatinAmericaEuropeAgoraIndustry12InsightsonHydrogen–ArgentinaEdition28willbeprimarilyoverseas,mostlyinEuropeandpossiblyinEastAsia,andtosomeextentinotherLatinAmericancountries.Thedilemmaofhowtotransporthydrogen…Whendiscussingthehydrogentrade,thecompeti-tionhasfocusedontheLevelisedCostofHydrogen(LCOH);sofar,thedeliverysystemhasplayedaminimumroleonexportpotential.Thankstoitshighlevelofrenewableenergyresources,ArgentinacanachieveverycompetitiveLCOHby2030,intherangeof2.0to2.7USDperkgH₂(60to81USDperMWh,respectively).10Thesecompetitiverenew-10ThesevaluesarebasedonAgoraEnergiewende'scalcula-tions.AgorahasdevelopedastudyanalysingtheaspectstobeconsideredwhencalculatingtheLCOHwiththeaimofunderstandingthesystemboundariesandcostsdriv-ablehydrogencostswillbeachievableonlyifinvestmentriskinthecountryisreduced,creatingamoreattractiveenvironmentforprojectdevelopersinArgentina.However,hydrogendeliverywillbetechnicallyandeconomicallyconstrainedbytransportdistance.AsshowninFigure14,pipelinesarethemostcost-effectiveoptionoverdistancesunder5000km,andretrofittedpipelinesaremoreaffordablethannewpipelines.Fordistanceslongerthan8000km,shippingistherecommendedtransportoption,butinthiscasehydrogenwillcompetewithothergreenmoleculessuchasammonia,methanol,andsyntheticfuelsforshippingcapacity.Atdistancesbetween5000and10000km,optionscanvarydependingonersfromdifferentstudiesaroundtheworld.AcommonapproachtotheLCOHcalculationwillfacilitatecompari-sonandhigh-levelpolicydiscussions.IEA(2022)TransportcostbypathwayasafunctionofdistanceFigure14Repurposedpipeline(20-inch)Repurposedpipeline(48-inch)Newpipeline(20-inch)Newpipeline(48-inch)LH₂NH₃LOHC0800070006000500040003000200010000321Levelisedcostofdeliveringhydrogen[USD/kgH₂][km]IMPULSE12InsightsonHydrogen–ArgentinaEdition29theproductbeingtransportedandthedeliverylocation.Argentinaisexpectedtohavealargeroverseasmarket,whereshippingwillplayaveryimportantroleintransportinggreenmolecules.Greenammoniawillbethelow-hangingfruitforthecountryintheshortterm,asitcanalsoprovidealow-carbonoptionforfuellingtheshippingsector.Fertilisersfromgreenammoniacanalsoplayanimportantroleinthismarket,includinginexportstobigagriculturalproducerssuchasBrazil.Additionally,thebioenergysectorinArgentinafavoursthesynthesisofotherPtXproductssuchasmethanolandsyntheticjetfuelbyusingthecountry’savailablesustainablecarbonsources.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition30DevelopinghydrogenstandardsinArgentinaStandardsforhydrogenproductionarekeyforthedevelopmentofahydrogeneconomy.Standardsareneededwithregardtosources,productionmethods,andenvironmentalcharacteristics.Inaddition,hydrogencertificationcanserveasamechanismtopromotefaircompetition,ensurehighproductquality,andkeepthelocalindustrycompetitive.StandardsandcertificationneedtobedevelopednotonlyforhydrogenbutalsoforotherPtXprod-uctssuchasgreenammonia,e-methanol,syntheticfuels,etc.Argentinashouldconsiderthedevelop-mentofacertificationschemeinitseffortstoupscalehydrogenproduction.Thisprocessshouldbedesignedtobeparticipativeandincludeconsul-tationswithdifferentstakeholdersinthehydrogensupplychainfromthepublicandprivatesectors.Furthermore,thecertificationschemesshouldbeflexibleenoughtoallowperiodicreviewsandadaptationstotheevolvingmarket’sconditionsofthemoment.Thisisespeciallyimportantforanindustryunderdevelopmentsuchasthatofhydro-genandPtX.Standardsandcertificationneedtoreflectlocalconditionswhensettingtargetsforhydrogenpro-duction.However,therearesomeinternationalguidelinesthatcouldhelptokickofftheprocessanddevelopfirstdraftsfordiscussionwithlocalstake-holders.Forinstance,theInteramericanDevelopmentBank(IDB)developedastudyonhydrogencertifica-tionforLatinAmericawithaviewtoexistingstructuresintheregion.Somecountriesandregionsarealreadymovingforwardinthehydrogencertificationprocess.Forinstance,Brazilhasrecentlylauncheditsbookandclaimcertificationprocessforrenewablehydrogen,inanefforttoleveragecurrentmomentum.Like-wise,theEuropeanUnionhasrecentlypublishedaregulatoryframeworkforrenewablehydrogenproductionandimports,withrequirementsaimedatpreventingrenewablehydrogenproductionfromincreasingoverallgrid/systememissionsbyappro-priatingexistingrenewablesanddivertingthemfromcurrentusers,therebyincreasingdispatchablefossilproduction.BotharepotentialPtXexportregionsforArgentina,whichiswhythecountryshouldstudyandevaluatetheseinitiativesaspartofitscertificationprocess.AssessingtheconditionssetbypotentialimportersofhydrogenandPtXcanhelptoalignthemanufacturingofsuchproductswithinthetraderegions,facilitatingcommercialisationandindustrialcompetitivity.Adoptingthebestinterna-tionalpractices,whichcanbeadaptedtothelocalcontext,willenhancethecountry’sattractivenessintheglobalhydrogentrade.Againstthisbackdrop,itwouldbeinterestingtoconsultwithinternationalstakeholderswhendevel-opingthecountry’scertificationprocess.Interna-tionalperspectivescanbeveryvaluableespeciallygivenArgentina’sgrowinginterestinbecominganexporterofhydrogenandPtXproducts.ArgentinaintheinternationalstandardsdiscussionAsapotentialexporterofPtXproducts,Argentinaneedstoactivelyparticipateinglobaldiscussionsonstandardsandcertification,especiallyforgreenproducts.Argentinashouldnotwaitforotherregionsandcountriestosettheconditionsforthehydrogentrade.Commonagreementsbetweenexportersandimportersneedtotakeplacetoguaranteeafairand8ThehydrogenindustryneedstobecompetitiveandestablishstandardsthatareinlinewithglobaltradeandindustryrequirementsIMPULSE12InsightsonHydrogen–ArgentinaEdition31competitivemarket,soastoensureachievableconditionsforPtXproducers.Argentinashouldassessexistingstandardsandcertificationinitiativestohighlightanyconditionsthatmightnotbedomesticallyfeasibleandtoidentifyconditionsthatfavourthecountry’spartici-pationinthehydrogenmarket.Regionalcollaborationcanbekeytoparticipatingindialoguesandplatformsasasingleblock.Thisisbecausemanycountriesintheregionhopetojointheinternationalhydrogenmarket.LatinAmericancountriescanestablishconditionsthatfavourthecompetitionoftheregionagainstotherpotentialexporters,includingtheavailabilityofcarbonsourcesfromthebioenergyindustry,strongtechni-calexpertiseandlocaltechnologydevelopment,amongothers.TheactiveparticipationofArgentinaandotherhydrogen-producingcountriesfromtheGlobalSouthintheinternationaldiscussiononhydrogenstandardsandcertificationiskeytoavoidrepeatingpastenergytrends(mostlyinthefossil-fuelindus-try)withregardtoextractivismandneo-colonial-ism.Thiswouldenableawin-winsituationforallcountriesinvolvedinthehydrogenmarket.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition32ThecostofusingnaturalgasNaturalgasprices,especiallyinEurope,havebeenseverelyaffectedbyRussia'swaragainstUkraine.ButArgentinahasvastnaturalgasreservesandthereforehasnotexperiencedstrongnaturalgaspricevariationsinthepastyears.Between2019and2022Argentina’snaturalgaspricehashadanaverageannualgrowthrateof2.9percent.Bycontrast,theEuropeannaturalgaspriceexperiencedanaverageannualgrowthrateof167percentoverthesameperiod.Figure15showsthatthevolatilityofnaturalgaspricesintheEuropeanmarketmakesrenewablehydrogenmuchmorecompetitivethanfossil-basedhydrogenwithCCS.ThesituationisdifferentforArgentina,wherecurrentfossil-basedhydrogenwithCCSismorecompetitivethantheaveragerenewablehydrogenestimates.Therefore,thecountryshouldprioritisepolicyinstrumentstoclosethegapbetweenrenewableandfossil-basedhydrogenwithCCS,asthelatterdoesnotneedincentivesforitsdevelopment.Promotingthedevelopmentoffossil-basedhydro-genwithCCSwouldcompetewiththeuseofnaturalgasinthepowerandheatingsectors,whichmayputmorepressureonthecountry’senergysecurity.Therefore,thedomesticuseoffossil-basedhydro-genneedstobecarefullyevaluated.Specifically,policy-makersneedtoconsiderthebenefitsthataAgoraEnergiewendeandIndustry(2023)basedonthefollowingdatasources:Full-loadhoursofrenewables:CAMMESA;Naturalgasprices:SecretaríadeEnergía(ARG),TTF(EU);FossilH₂withCCSisbasedonsteammethanereformingwith95%ofcapturerateNaturalgasprices–renewablehydrogenvs.fossil-basedhydrogenwithCCSFigure15Jan2023Oct2022Jul2022Apr2022Jan2022Oct2021Jul2021Apr2021Jan2021010864218161412LCOH[$/kg]FossilH₂withCCS(Argentina)FossilH₂withCCS(EU)RenewableH₂fromWind(Argentina)RenewableH₂fromSolarPV(Argentina)9Fossil-basedhydrogenwithcarboncaptureandstorage(CCS)canserveasabridgetechnologybutwillbeoutcompetedbyrenewablehydrogenIMPULSE12InsightsonHydrogen–ArgentinaEdition33greaterinputofrenewableenergyintoArgentina’senergymatrixcanbringintermsofenergysecurity,economicdiversification,andsustainabledevelop-ment.Furthermore,theinternationalLNGmarketisveryattractiveforArgentina;amoreactivepartici-pationinitwillaffectlocalnaturalgasprices,creatingmoreuncertaintyregardingtheuseofnaturalgasinhydrogenproduction.Fossil-basedhydrogenwithCCSasanoptiontoacceleratethetransitioninArgentinaArgentinaneedstocarefullyassessitshydrogendevelopment,balancingnaturalgas(asabridgetechnology)andrenewableenergy.Mostoftheexistinginternationalsupportingmechanismsforhydrogendevelopmentarefocusedonrenewablehydrogen.Developingfossil-basedhydrogencouldbeamissedopportunitytoaccessimportantfinancingsupportinArgentina.Furthermore,providingincentivesforfossilfuel-basedhydrogencanaffectthecountry’scompetitivenessintheinternationalhydrogentrade.ItwillalsodelayArgentina’sdecar-bonisationprocessandlimitthesocio-economicbenefitsthatrenewablehydrogencanpotentiallyprovide.RegulationsforCCSinArgentinaarenotyetinplaceandthisdiscussionwillfacechallengesrelatedtolanduse/ownershipforcarbonstorage,registration,monitoring,etc.Inaddition,thereiscurrentlynopubliclyavailableinformationcoveringallaspectstoassessArgentina’sgeologicalcapacityforcarbonstorage.SomestudiesareunderwayandcouldhelptoclarifythetechnicalpotentialforusingCCSinthecountry.Argentinacanbeflexibleinitsdomesticuseofhydrogenbydeployingnaturalgasresourcesasabridgetechnologytoboostlocalindustry.Newfossil-basedhydrogeninfrastructurewithCCSshouldbedesignedthatisreadyforatransitiontorenewablehydrogenassoonaspossible.Investmentinnewfossilfuel-basedinfrastructureforhydrogenproductioncouldleadtostrandedassets,becausetheinternationalmarketisclearlyfocusedonrenewablehydrogenandPtXproducts.Inaddition,investmentinfossil-basedinfrastructureshouldavoidcontrib-utingtocarbonlock-in.Certainhydrogenpathways,particularlythosebasedonfossilfuels,mayincreasetheriskofcarbonlock-inbydelayingthetransitiontorenewablehydrogen(Rosenow,etal.,2021;Oh,etal.,2022).Thiscanincreasefugitivemethaneemissionsorrelianceonlong-livedcarboncaptureassets.Bycontrast,renewablehydrogencanreplacefossil-basedhydrogenintheshorttomediumterm.Ensuringsustainabilityintheproductionoffossil-basedhydrogenwithCCSFossil-basedhydrogenwithCCSmaybeatechnologyforArgentineanpolicy-makerstoconsidergiventhecountry’snaturalgasresources.However,theyneedtoevaluatetheeffectivenessofcarboncaptureandtherisksthatmethane,carbon,andhydrogenleakageposetotheclimate.Fossil-basedhydrogenwithCCSmayhaveagreaterclimateimpactthanfossil-basedhydrogenitself,asexplainedinInfobox3.Fossil-basedhydrogenisproducedusingnaturalgasasafeedstockviasteammethanereforming(SMR),whichiswhereCCScanbeapplied.CCSinvolvescapturing,compressing,transporting,andstoringtheCO₂producedduringSMR.However,itisimportanttonotethattheSMRprocesshastwotypesofemissions.11First,therearetheemissionsfromthecombustionofnaturalgastoproducethethermalenergyrequiredforthereaction.TheCO₂concentrationinthisfluegasislowanditssepara-tionisthereforeenergy-intensiveandexpensive.11Fugitivemethaneemissionsshouldalsobeconsideredwhenusingfossil-basedhydrogenwithCCS.Theuseofnaturalgas,especiallyfromunconventionalsources,canresultinmethaneleakswithasignificantclimateimpact.Similarly,theSMRprocessneedstoensuregoodpracticestomitigatefugitivemethaneandhydrogenemissions.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition34Thesecondareprocessemissionsfromtheconver-sionofnaturalgasandsteam(water)intohydrogenandCO₂.Theseemissionshaveahigherconcentra-tionofCO₂.Typically,onlyCO₂processemissionsaresuitableforCCS,duetotheirhigherCO₂concentration.Combustionemissions,whichaccountforaboutone-thirdoftotalSMRemissions,willstillbereleasedintotheatmosphere(Ausfelderetal.,2022).Toreducethecarbonfootprintoffossil-basedhydrogenwithCCS,itisnecessarytoreplacethenaturalgasusedasfuelwithaCO₂-neutralfuel(e.g.,biogas).ThedevelopmentofCCSforfossil-basedhydrogenrequiresadequatestoragespaceforCO₂,togetherwiththedevelopmentofinfrastructureforconveyingCO₂emissionsfromproductiontostoragesites.RenewablehydrogenisexpectedtohavegreaterfuturedemandMostcountrieswithhighhydrogendemandhavefocusedtheireffortsontheproductionandimportofrenewablehydrogen,inlinewiththeirambitiousdecarbonisationstrategies.Asaresult,therehavebeenincreasingeffortsintheinternationalcommu-nitytopromoteandfinancerenewablehydrogenandPtXproducts.Forinstance,theongoingdiscussionsregardingthethirdrevisionoftheEuropeanRenewableEnergyDirective(REDIII)aimatsettingatargetforrenewablehydrogenandhydrogen-basedfuelsinthetransportsectortoatleast1percentby2030.Likewise,fortheindustrialsector,REDIIIhassetatargetof42percentby2030forrenewablehydrogen(andhydrogen-basedfuels)Infobox3:HydrogenleakageanditspotentialclimateimplicationsThehydrogenmoleculeismuchsmallerthanothergasessuchasCO₂andmethaneandisthereforemoredifficulttostoreorcontain.Inahydrogen-basedeconomy,hydrogenleakageisexpectedatvariouspointsoftheproductionprocess.Insomecases,hydrogenispurgedintotheatmosphere.Themoleculehasindirectwarmingeffectsthatwillbecomemorerelevantwhenhydrogenproductionisscaledup.Currently,thereisuncertaintyabouttheamountofhydrogenleakagethatwilloccur.However,moreattentionshouldbegiventohydrogenleakagegivenitsrelevanceinfuturedecarbonisationscenarios.Hydrogenmoleculesintheatmospherecanhaveindirectclimateeffectsbyextendingthelifetimeofothergreenhousegases.Giventheimpactofhydrogenleakagewhencombinedwithmethaneleakage,theproductionpathwayplaysanimportantroleinassessinghydrogen’sclimateimpactversusthatofCO₂emissionsfromfossilfuels.Inthefirst10years,fossil-basedhydrogenwithCCScouldhaveawarmingimpactthatis40percenthigherthanfossilfuelsintheworstcaseofhydrogenleakage.Renewablehydro-geninthesamescenariocouldmitigateonly65percentoftheimpactoffossilfuels.Inthebestcaseofhydrogenleakageinthefirst10years,fossil-basedhydrogenwithCCScanmitigate65percentofthewarmingimpactoffossilfuels.Underthesameconditions,renewablehydrogencanmitigatemorethan95percentofthewarmingimpactoffossilfuels.Theclimateimpactofhydrogentendstodecreaseovertime,butestimatesshowthatinmorethan100years,fossil-basedhydrogenwithCCSwillonlybeabletoreduceupto85percentofthewarmingeffectoffossilfuelsinabestcase.Source:Ocko,etal.,2022IMPULSE12InsightsonHydrogen–ArgentinaEdition35infinalenergyandnon-energyapplications(EC,2021).TheUS’sInflationReductionAct(IRA)of2022providesuptotenyearsoftaxincentivesforthedeploymentofcleanenergytechnologyandinfra-structure(includingrenewables,hydrogen,andelectricitygridinfrastructure).Forcleanhydrogen,theIRAincludestaxcreditsforproductionorinvest-ment,loanstoexpandprivateinvestment,anew$300millionalternative-fuelandlow-emissionsaviationtechnologyprogramme,$5.8billionindirectinvestmentforindustrialdecarbonisation,anddemandcreationforlow-carbonproducts(e.g.,steelandcement)throughgovernmentpurchasingandothermeasuresforthepromotionofcleanhydrogenanditsderivatives.Toclosethepricegapbetweenfossil-basedandrenewablehydrogen,someinternationalmechanismsaimtocreateagreenmarketwithacompensationmechanismtomakePtXproductsmorecompetitive.OneexampleistheH2Globalfoundation.Itofferspurchaseauctionsforrenewablehydrogen-basedproductsatapremiumthatwillcovertheeffectivecostofgreenproduction.Purchasecontractswillhaveadurationoftenyearstoguaranteethatinvestorswhowinbidscanrecovertheircosts.ThegreenproductswillthenbesoldinEuropeinannualauctions.Intheeventthatthecostofresellingtheproductislowerthanthepurchasecost,theGermangovernmentwillcoverthedifference.ThefirstauctiontopurchaseammoniawaslaunchedinNovember2022.Inthemeantime,moreEuropeangovernmentshavejoinedtheinitiative.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition36DiversityofresourcesalongtheterritoryArgentinaismadeupof23provincesandtheFederalDistrictofBuenosAires,coveringavastterritoryalmostone-thirdthesizeofEurope.MappingtheavailabilityofenergyresourcesintheArgentinianterritoryiskeyforidentifyingcomplementaritiesandpotentialareasforthecreationofnewindustrialandcommercialhubs,aswellasforexpandingexistingones.Thecountryiscountingonadiversityofeconomicactivities,giventhedistributionofnaturalresourcesamongtheprovinces,asFigure16shows.Thecomplementarityofresourceswillbekeytothedevelopmentofahydrogeneconomyinthecountry,asenergyandwaterresourceswillbecrucialfortheproductionofhydrogen.Butsustainablecarbonsources,possiblyfromthebioenergysector,willalsobeneededfortheproductionofPtXproducts.Similarly,theexistingindustrialandportinfrastruc-turewillbecrucialformanufacturingvalue-addedproductstobesoldininternationalmarkets.AclearroadmapcanbediscussedattheprovincialleveltargetingdifferentPtXproductsdependingonresourceavailability.Forinstance,syntheticfuelscanbeproducedinprovincesclosertothebioenergyindustry,whilegreenammoniacanbeproducedinareaswherenosustainablecarbonsourcesareavailable.Suchanexercisewillrequireclosecooper-ationbetweenprovincesandnationalgovernmentstoensurethatthestrategiesareconsistentwiththeobjectivesofanationalhydrogenstrategy.ProjectdevelopmentprocedureswillneedtobeconsistentacrosstheprovincesRegulationsforthemanagementofnaturalandenergyresourcesaremandatedattheprovinciallevel,makingthemcomplexandunevenacrossjurisdictions.Thisishighlyrelevantwhenitcomestoenvironmentalregulations,especiallywhendevelopingnewhydrogenprojects.ProvincesshouldworktogethertoagreeonacommonAgoraEnergiewende,AgoraIndustry,FundaciónTorcuatodiTella(2023).Bioenergyincludesbiomass,biodiesel,biogasandethanolpotentialsMapwithenergy/naturalresourcesdistributionamongtheprovincesFigure16SolarWindHydroBioenergyPortsOilNaturalgas10ArgentinacanidentifypotentiallocationsforinitialhydrogenhubsbymappingcomplementaryresourcesandlocaleconomiesintheprovincesIMPULSE12InsightsonHydrogen–ArgentinaEdition37regulatoryframeworkforthepromotionofrenew-ableenergyandhydrogen,focusingontheprotec-tionoffloraandfauna,waterconsumptionanddischarges,wastegeneration,thewell-beingofindigenouspopulations,andotherrelevantfactors.Theexistenceofacommonregulatoryframeworkforprojectdevelopmentwillensurealevelplayingfieldinthemarket,theappropriateuseofnaturalandenergyresources,andtheprotectionoftheenvironmentandthelocalpopulation.Furthermore,itwillhelptoattractdevelopersthroughoutArgen-tina’sterritory.Argentinahasalonghistoryoflegislativeandregulatorynegotiationsconcernedwitharticulat-ingtherespectivepowersofthefederalandprovincialgovernments.Currently,theprovincesmanagetheirownnaturalandenergyresourcesandpassenvironmentalregulationstoprotecttheirownnaturalresources.Inotherwords,environ-mentalregulationinArgentinaiscomplicated,withfederal,provincial,andmunicipallawsandregulationsoverlapping.Insomecases,itisunclearastowhetheraparticularregulationapplies.Hydrogenprojectsshouldfollowthemostrigorousguidelinesforsustainabilityandenvironmentalprotection,especiallywhenconsideringhydrogenandPtXproductsforexport.Otherwise,thenewprojectswillimpacttheenvironmentandbecomeanextractiveindustrywithoutprovidinganysocio-economicandclimatebenefits.Similarly,vagueenvironmentalregulationscancausedelaysforprojectdevelopers,increasingprojectcostsandmakingtheterritorylessattractiveforinvestment.ThehydrogenindustrycanboostlocaldevelopmentSocialandeconomicdevelopmentinArgentinahasbeenunevenacrosstheprovinces,butthehydrogenandrenewableenergyindustriescouldhelptostimulatelocaldevelopmentifthediverseresourcesneededfortheindustry,includingenergyandsustainablecarbon,areproperlyutilised.Provincesshouldassesstheintegrationofrenewableandhydrogenprojectsintheelectrificationoflocalcommunitiesorforlocaleconomicactivitiessuchasagriculture.Additionally,provinceswithimportantfossilfuelresourcesshouldlinkemploymentinnewgreenmarketstoallowajusttransitionawayfromgasindustryjobs,whichmaybecomeredundantinthefuture.Thecurrentfederalfiscalsystemshouldbereviewedwiththeaimofensuringauniformdistri-butionofrevenuesamongtheprovincesandequalfiscalconditionsforprojectdevelopers.ArgentinaisthemostdecentralisedfederalcountryinLatinAmerica,withapproximately50percentoftotalpublicspendingoccurringatthesub-nationallevel.However,ithasahighdegreeofverticalfiscalimbalance.Analysingnationalandprovincialbudgetsandtaxallocations,onaverage,about35percentofprovincialexpenditureisfinancedbytaxescollecteddirectlybytheprovincialauthorities.Theremaining65percentisfinancedfromtaxescollectedbynational(federal)authorities.Thefiguresarealsounevenacrossprovinces,withsomereceivingmorethan80percentoftheirtotalrevenuefromthefederalgovernment.Inthissense,thediversityofresourcesavailablethroughoutthecountryforthedevelopmentofPtXvaluechainsrepresentsanopportunitytoenhancelocalrevenuegenerationandalsoimprovethebalancebetweenprovincialaccounts.Inaddition,thehydrogenindustryinArgentinacanplayapivotalroleincontributingtomoreequaleconomicgrowthbyexpandingtheindustrialsectorforthemanufacturingofadd-ed-valueproducts,openinginternationaltrade,andincreasingtaxrevenuebases,whichwillboostfiscalrevenuesthroughoutthecountry.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition38TheimportanceofcreatingahydrogenpolicyandaregulatoryframeworkTocreateanattractivemarketforprivateandinter-nationalinvestors,countriesneedtocreateaclearandreliableenvironmentforrenewablehydrogendevelopment.Forinstance,clearpolicywithspecifichydrogenandPtXtargetsinthemediumandlongtermprovidesinvestorswithapositivesignalregard-ingthecountry’spathwayandinterestinthepromo-tionofsuchprojects.CountriessuchasChile,Colombia,andUruguayhavedevelopedclearroadmapswithtargetsthatprioritisehydrogendevelopment.Someoftheseroadmapsincludeclearnextstepswhileassigingresponsibili-tiesamonglocalstakeholders,suchasthecreationofaregulatoryframework,thedevelopmentofstand-ardsforthesector,andeventhecreationofnewfinancingmechanismstargetinghydrogenpilotprojects.Allsucheffortshelptocreateastableandattractivefinancingenvironmentthatcomplementsthehydrogenpotentialofthehostcountry.Argentinahasattractedmuchinternationalinterestinthedevelopmentofrenewablehydrogen,espe-ciallygivenitsvastrenewableenergyresources.Butdespitethisinterest,thecountryhasnotyetestablishedaclearpolicyorregulatoryframeworktopromotehydrogen.Thegovernmenthasexpressedinterestinpromotinghydrogen,andiscurrentlydevelopinganupdateofthehydrogenlawfrom2006,whichwillincludeanationalhydrogenpromotionregime.Furthermore,thecountryisworkingondevelopingaroadmapandanationalstrategyforthedevelopmentofahydrogenvaluechain,inconsultationwithvariousstakeholders.Inaddition,theSecretariatofEnergyisdevelopinganenergytransitionplanthatincludesthedevelopmentofahydrogenvaluechainaswellastheuseofthecountry’slargeunconventionalnaturalgasreservesandlow-emissiontechnologiessuchasrenewablesandnuclear.Withinthisframework,itwillbeimpor-tanttolinkthenationalhydrogenstrategytoclimatecommitments,todecarbonisationplansfortheindustrialsector,andtoenergyplanningandenviron-mentalpoliciesapplicabletothevaluechain.Hydrogenisacross-sectoralinitiativeHydrogenandPtXproductsaffecttheentirevaluechaininenergy,andthereforeneedtobediscussedwithallrelevantstakeholderstodeveloprealisticandachievablestrategiesfortheirdevelopment.Addi-tionally,theinfrastructurerequiredtoscaleupthedeploymentofPtXproductswillbeasignificantlong-terminvestmentandwillthereforerequirethesupportandagreementofallinvolvedsectors.Scalinguphydrogenwillrequiregoodplanningandcoordinationwithavarietyofsectors.Thefirstisthepowersector.Coordinationwiththissectorisneededtoensurethatrenewableenergyprojectscanbeintegratedintothesystem,cancontributetothedecarbonisationofthesector,andcantakeadvantageoftheflexibilitythathydrogenproductionandstoragecanbringtopowergeneration.Thesecondisthehydrocarbonssector.Asapotentialhydrogenproducerandinfrastructuredeveloper,thehydrocar-bonssectorcanassesstheroleoffossil-basedhydrogentoavoidstrandedassetsandensurehighsustainabilitystandardsintheCCSprocess.Thethirdistheindustrialsector.Asamajorconsumerof11Argentinashouldcreateaclearpolicyframeworkforhydrogenproduction,developadequateconditionstoattractinvestors,andregardhydrogenasanenergyandclimateissuewhenconsideringaccesstofinancinginstrumentsIMPULSE12InsightsonHydrogen–ArgentinaEdition39hydrogen,itmustbescaleduptoproducevalueaddedproductsforlocalconsumptionandexportwhilepromotingthedecarbonisationandsustainabilityofthesector.Finally,thereareothersectorssuchastransportandfoodthatwouldneedtoassesstheroleofhydrogenintheirdecarbonisationeffortsaswellasthebenefitsandchallengesofusingPtXproducts.AttractinginvestmentforhydrogendevelopmentinArgentinaArgentina’svastenergyresourceshaveservedasanimportanthooktoattracthydrogeninvestmenttothecountry,despitetheuncertaintiessurroundinginvestmentandprojectimplementation.Argentinahasexperienceindevelopingattractiveriskmitiga-tionmechanismstoencourageprivate-sectorinvestmentinrenewableenergy.ThesemechanismsincludetheRenovArprogramme(seeInfobox4).Expandingandadjustingthemcouldbeagoodstrategyforattractinginvestmentinthecountry’shydrogeninfrastructure.Similarly,Argentina’sfinancialsectorneedstocreatetechnicalandfinancialcapacitytoassessthefundingofhydrogenprojects.ThismayrequirenewtechnicalskillstoassessthebankabilityofPtXproduction.Atthesametime,giventheemissionmitigationpoten-tialofPtXproductsatthelocalandinternationallevels,Argentinashouldconsiderhydrogendevelop-mentasaclimatemitigationstrategy.ThiswouldgiveInfobox4:MitigatingriskinthepromotionofrenewableenergyinArgentinaDespitetheeconomicuncertaintyofinvestmentinArgentina,thecountryhascreatedattractiverenewableenergydevelopmentprogrammesinthepast.In2015,forexample,ArgentinalaunchedtheProgrammeforthesupplyofelectricityfromrenewableenergysources(RenovAr),whichprovidesaframeworkforriskcoveragethrougharenewableenergyauctionsystem.TheofftakerinthisauctionprocessisCAMMESA,Argentina’sIndependentSystemOperator.Underthisframework,theArgentiniangovernmentistoestablisha“coveragewaterfall”consistingof(1)arenewableenergyfund(FODER)guaranteeingcoverageofeventualdelaysinpaymentstogenerationcompanies;(2)asovereignguaranteethatcouldbeappliedtoterminationpayments;and(3)aWorldBankGuarantee(GCF)toisolateRenovArprojectsfromcountryrisk,assimilatethesovereigncounterparttoaAAAriskprofile,andimprovethebankabilityofprojects.TheRenovArprogrammewasaninternationalmodelinhowtopromoterenewableenergy,anditdeliveredgoodresultsinthefirstyearsofitsimplemen-tation.In2019,thefinancialcrisisposednewchallengesforthefinancialclosureofprospectiveRenovArprojectsandfutureauctionrounds.Withahighercountryriskanddifferentreturnsthantheonesexpectedbyinvestors,theprojectssuffereddelaysbeyondthetimeframerequiredbythePPAsandregulation.Asaresult,privatePPAs(MATER)havebecomethemaindrivermechanismfornewrenewableenergyprojects,drivenbyattractivecontractprices.However,thecurrenttransmissionbottlenecksarethemainchallengeforthefurtherdeploymentofrenewableenergyinthecountry.Figure17showsacomparisonbetweentheriskcoveragewaterfallofRenovAr,thecurrentprivaterenewa-blePPAs,andtheframeworkdevelopedtocatalysedistributedgenerationprojects.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition40hydrogenprojectsaccesstofinancingmechanismsaimedatmitigatingclimatechange.Inthemediumterm,projectdevelopersshouldaligntheirhydrogenstrategiestoaccessglobalfinancingoptionssuchastheinternationalcarbonmarketmechanismsbeingdevelopedunderArticle6oftheParisAgreement,amongotherclimatefinanceoptions.PromotionmechanismsforrenewableenergydevelopmentFigure17AgoraEnergiewende,AgoraIndustryandFundaciónTorcuatodiTella(2023)basedonUndersecretariatofEnergyPlanning(2019)MATERadvantagesDiscountsincapacitysurcharge2017–2020→100%2021–2022→75%2023–2024→50%2015–2030→25%AbsenceofcommercialisationandadministrativefeesforrenewablepurchasesDistributedgenerationNetbillingbalanceFODISFundForcapitalcostandenergypaymentPreferentialinterestratesandtaxandcustomfeesexemptionstodeploythetechnologyIncentivesforlocalpurchasestodevelopnationalSME&industriesSettlementoftechnicalregulation,qualitystandardsandotherinstallationproceduresRenovArriskcoveragewaterfallOﬀtakerDelaysinpaymentfullcovereduptocapFODERGuaranteeEnergyPaymentFromOfftakertoSovereignriskSovereignGuaranteeTerminationPayment1SovereigntoAAAriskandBankability(DueDiligence)WorldBankGuaranteeTerminationPayment20123IMPULSE12InsightsonHydrogen–ArgentinaEdition41Argentina’sprofessionalscouldpromotetechnologydevelopmentEnergyandindustryprofessionalsinArgentinahavetheabilitytoestablishacompetitivehydrogeneconomyinthecountry.However,thelarge-scaledevelopmentofthehydrogenindustrymayrequireanevengreaternumberofprofessionalstomaketheseambitionsareality.Thecountrywillthusneedtoassesscapacityneedsinlinewiththedevelop-mentofstrategies,plans,androadmapsfortheexpansionofhydrogenandindustrialproduction.Tothoseends,thecountrycanestablishpartnershipswithacademicinstitutions,technicalcentres,andotherorganisationstotrainprofessionalscapableofmovingArgentina’shydrogeneconomyforward.SeveralinitiativeshavebeenlaunchedinArgentinatopromotethedevelopmentoflocalknowledgeandtechnologyinareasrelatedtohydrogenandPtX.Theseserveasfirststepsinthecreationoflargerplansforcapacitybuildingandlocaltechnologydevelopmentadaptedtothecountry’sconditions.Localtechnologydevelopmentsuchaselectrolysersorotherlow-carbontechnologiescanreducedependenceonforeignmanufacturesandpromotedomesticinnovation.Thecurrenteffortstodeveloplithium-ionbatteriesinArgentinaareaclearexampleofthecountry’stechnicalandinnovativecapacities.Table1providesanoverviewofsomeoftheseinitiatives.RegionalcooperationforamoredynamichydrogenmarketinLatinAmericaManyLatinAmericancountrieshaveexpressedinterestinthedevelopmentofhydrogeninviewoftheirrenewableenergyresources,theadvanceddecarbonisationprocessthataccompanieshydrogenproduction,andthedesiretoreaptheeconomicbenefitsofthisboomingindustry.Somecountrieshavealreadydevelopedclearhydro-genroadmapsandotherhaveinitiatedthedevelop-mentofseveralpilotprojectsaimingtoscaleuphydrogenandPtXproductioninthecomingyears.ThisgrowinginterestinhydrogenproductionisasignofthecompetitivenessoftheLatinAmericanhydrogentrade.Therefore,itwouldbebeneficialforthecountriesintheregiontohaveacoordinatedapproachtohydrogendevelopmentsotheycanalldeveloptheirhydrogenpotential.Sofar,wehaveseenimportantexamplesofcoopera-tionintheregion,suchastheGreenHydrogenHubinColombia,wheretheColombianandChileanhydro-genindustrieshavejoinedforcesinthedevelopmentofrenewablehydrogenprojects,combiningtechnicalandlocalexpertisetotakeadvantageoffinancialincentivesinthehostcountry.Recently,bothgov-ernmentssignedacooperationagreementtopromotevariousareasoftheenergytransitionandenhanceenergyintegrationthroughthedevelopmentofrenewablehydrogen.Furthercooperationprojectsintheareasoftechnologydevelopment,capacitybuilding,binationalproductionprojects,etc.,willbekeyinscalinguptheregion’srenewablehydrogenproduction.RegionalcooperationinLatinAmericacanalsoleadtoacommongoalandvisionforhydrogentrade,onethatisadaptedtotheuniqueconditionsoftheregion,especiallyintheprotectionandintegrationoflocalcommunities.Sucharegionalpositioncanalsohelpininternationaldiscussionsontradeconditions,standards,andcertification.Havingaregionalblocwithacommonpositionandperspectivewouldalso12PromotingR&DandincentivisinginternationalcooperationcanacceleratehydrogenproductionAgoraIndustry12InsightsonHydrogen–ArgentinaEdition42berelevantwhendiscussingexportconditions,sustainabilitycriteria,industrialrelocationtorenew-able-richcountries,andotherkeyaspectsofthehydrogenmarket.InternationalcooperationfocusingontradeofPtXproductsPotentialimportingcountriesaremovingtosecurefuturehydrogensuppliesinlinewiththeirambitiousdecarbonisationstrategiesandasameasuretomitigatethecurrentfossilfuelcrisis.DespiteArgen-tina’sstronginterestandpotential,thecountryisnotyetpartofanyofthesebilateralagreementsonrenewablehydrogenorPtXproducts.BilateralhydrogensupplyagreementssendpositivesignalsforthedevelopmentofapotentialPtXmarket,attractinginvestmentandhelpingtoadvancenationaldiscussionsonthedevelopmentofappropri-atepolicyandregulatoryframeworksfortheproduc-tionofrenewablehydrogen.Mostimportantly,bilateralhydrogenagreementshavethepotentialtoopennewtraderoutesforPtXproducts.Inaddition,bilateralagreementswithpotentialimportingcountrieswouldpositionArgentinaasanimportantplayeringeopoliticaldiscussionsonhydrogen.AfirststepforArgentinamaybetoreviewexistingenergytradeandbilateralagreementsinordertoidentifynewareasofexpansionthatincludePtXproducts.HydrogenresearchanddevelopmentinitiativesinArgentinaTable1FundaciónTorcuatodiTella(2023)Initiative/InstitutionTypeYearConceptArgentineWindEnergyAssoci-ation(AAEE)andtheArgentineHydrogenAssociationPrivate1996PotentialforproductionofhydrogeninPatagonia,focusonliquidhydrogen.HychicoPrivate2006FirstpilotprojectforhydrogenelectrolysispoweredwithwindenergyinJanuary2009,withacapacityof94.5tonnesperyear.2010Hydrogentransportpipelineof14.3mileslength.Pilotunder-groundstoragefacilitiesusingdepletedoilandgasfields.InstituteforHydrogenTechnologyandSustainableEnergies(ITHES)PublicSmall-scalehydrogenpilotplantfrombiofuels.(bioethanol,glycerolandbiogas)InstituteforEnergyandSustainableDevelopment(IEDS)PublicHydrogenproductionfromnuclearenergy;hydrogenasaby-productofbioremediation;enzymaticproduction.Useofhydrogenblendedwithnaturalgasforpublicandfreighttransport.ConsortiumfortheDevelop-mentofaHydrogenEconomyinArgentina(H₂AR)Public-privatePromoteexchangeandstrategiesforthetechnologyandmarketdevelopmentofhydrogeninArgentina.PlataformaH₂ArgentinaPublic-Private2020Focusesondevelopingenergypolicyandregulationforthedevelopmentofrenewablehydrogen.InSeptember2021,thisplatformpromotedabillforupdatingArgentina’shydrogenlaw.IMPULSE12InsightsonHydrogen–ArgentinaEdition43However,thecountryneedstocarefullyassessthetermsofthesebilateralagreementsinordertoensurethatconditionsareappropriate,feasible,andrealisticforeveryoneinvolved.Hydrogentradewillrequireimportantcomponentscoveredbyawell-establishedEESGframeworkthatavoidsthepromotionofextractiveindustriesandprovidessignificantsocio-economicbenefitsforArgentina.AgoraIndustry12InsightsonHydrogen–ArgentinaEdition44ReferencesAgoraEnergiewende,AgoraIndustry(2021).12InsightsonHydrogen,https://www.agora-ener-giewende.de/en/publications/12-insights-on-hy-drogen-publication/,(accessedMay2023)AirTransportActionGroup(ATAG)(2021).Waypoint2050X,Balancinggrowthinconnectivitywithacomprehensiveglobalairtransportresponsetotheclimateemergency:avisionofnet-zeroaviationbymid-century,https://aviationbenefits.org/media/167417/w2050_v2021_27sept_full.pdf(accessedMarch2023)F.Ausfelder,E.O.Herrmann,andL.F.LópezGonzález(2022).PerspectiveEurope2030technol-ogyoptionsforCO₂-emissionreductionofhydrogenfeedstockinammoniaproduction.FrankfurtamMain:DECHEMAGesellschaftfürChemischeTechnikundBiotechnologiee.V,https://dechema.de/dechema_media/Downloads/Positionspapiere/Studie+Ammoniak.pdf,(accessedMarch2023)BancoCentraldelaRepúblicaArgentina(BCRA)(2023).TipodeCambiodeReferenciaComuni-cación“A”3500(Mayorista)yTipodeCambioNominalPromedioMensual(TCNPM).RetrievedDecember2022,https://www.bcra.gob.ar/publica-cionesestadisticas/tipos_de_cambios.asp,(accessedMarch2023)BloombergNEF(2022).ElectricVehicleOutlook2022,https://about.bnef.com/electric-vehicle-outlook/(accessedMarch2023)BolsadeComerciodeRosario(2021).Fertilisers:prospectivesandopportunitiesforArgentina(Fertili-zantes:panoramayoportunidadesparalaArgentina),https://www.bcr.com.ar/es/mercados/investiga-cion-y-desarrollo/informativo-semanal/noti-cias-informativo-semanal/fertilizantes,(accessedAugust2022)CámaraArgentinadeEnergíasRenovables(CADER)(2022).TechnicalandeconomicevaluationofpriorityextensionstoincreasethecapacityofinjectionofrenewableenergiesintheSADICAMMESA(2022).MonthlySynthesis.RetrievedDecember2022,“InformesyEstadísticas”,https://cammesaweb.cammesa.com/informes-y-estadisti-cas/,(accessedMarch2023)Caratori.L.(2022).AstrategicanalysisonEnergyinArgentinafor2023-2024FoodandAgricultureOrganisationoftheUnitedNations(FAO)(2020).ActualizacióndelbalancedebiomasaconfinesenergéticosenlaArgentina.ColecciónDocumentosTécnicosN.°19.BuenosAires,https://www.fao.org/publications/card/en/c/CA8764ES/,(accessedMarch202e)InternationalEnergyAgency(IEA)(2022).GlobalHydrogenReview2022,https://iea.blob.core.win-dows.net/assets/c5bc75b1-9e4d-460d-9056-6e8e626a11c4/GlobalHydrogenReview2022.pdf,(accessedOctober2022)IEA(2022a).Howtheenergycrisisisexacerbat-ingthefoodcrisis,Commentary,https://www.iea.org/commentaries/how-the-energy-cri-sis-is-exacerbating-the-food-crisis,(accessedOctober2022)IEA(2022b).WorldEnergyOutlook2022,Paris,https://iea.blob.core.windows.net/assets/c282400e-00b0-4edf-9a8e-6f2ca6536ec8/WorldEnergyOut-look2022.pdf,(accessedNovember2022)IEA(2021).HydrogeninLatinAmerica,Fromnear-termopportunitiestolarge-scaledeployment,Paris,https://www.iea.org/reports/hydro-gen-in-latin-america(accessedMay2023)IMPULSE12InsightsonHydrogen–ArgentinaEdition45InternationalRenewableEnergyAgency(IRENA)(2022).WorldEnergyTransitionsOutlook2022:1.5°CPathway,InternationalRenewableEnergyAgency,AbuDhabi,https://irena.org/publications/2022/mar/world-energy-transitions-outlook-2022,(accessedNovember2022)IRENA(2022a).GeopoliticsoftheEnergyTransfor-mation:TheHydrogenFactor,InternationalRenew-ableEnergyAgency,AbuDhabi,https://www.irena.org/-/media/Files/IRENA/Agency/Publica-tion/2022/Jan/IRENA_Geopolitics_Hydrogen_2022.pdf?rev=1cfe49eee979409686f101ce24ffd71a,(accessedMarch2023)IRENA(2022b).Statistica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urwebsite:www.agora-energiewende.orgINGERMANStellungnahmezumEntwurfeinesGesetzeszurAnpassungdesEnergiewirtschaftsrechtsanunionsrechtlicheVorgabenReferentenentwurfdesBundesministeriumsfürWirtschaftundKlimaschutzEinneuerOrdnungsrahmenfürErdgasverteilnetzeAnalysenundHandlungsoptionenfüreinebezahlbareundklimazielkompatibleTransformationRückenwindfürKlimaneutralität15MaßnahmenfürdenbeschleunigtenAusbauderWindenergieKlimaneutralesStromsystem2035(Zusammenfassung)WiederdeutscheStromsektorbiszumJahr2035klimaneutralwerdenkannStellungnahmezumNetzentwicklungsplanGas2022-2032derFernleitungsnetzbetreiberDieEnergiewendeinDeutschland:StandderDinge2022RückblickaufdiewesentlichenEntwicklungensowieAusblickauf2023VolleLeistungausderEnergiekriseMitZukunftsinvestitionendiefossileInflationbekämpfenDurchbruchfürdieWärmepumpePraxisoptionenfüreineeffizienteWärmewendeimGebäudebestandPower-2-HeatErdgaseinsparungundKlimaschutzinderIndustrieSchutzinderfossilenEnergiekriseOptionenfürAusgleichundEntlastungKlimaschutzverträgefürdieIndustrietransformation(Stahl)–UpdateAktualisierteAnalysezurStahlbrancheKlimaneutralesStromsystem2035(VollständigeStudie)WiederdeutscheStromsektorbiszumJahr2035klimaneutralwerdenkannKlimaschutzverträgefürdieIndustrietransformation(Zement)AnalysezurZementbrancheAgoraEnergiewendeAnna-Louisa-Karsch-Straße210178Berlin,GermanyP+49(0)307001435-000F+49(0)307001435-129www.agora-energiewende.deinfo@agora-energiewende.deAgoraIndustryAnna-Louisa-Karsch-Straße210178Berlin,GermanyP+49(0)307001435-000F+49(0)307001435-129www.agora-industry.orginfo@agora-industrie.de294/02-I-2023/ENThispublicationisavailablefordownloadunderthisscancode.AboutAgoraAgoraEnergiewendedevelopsscientificallysound,politicallyfeasiblewaystoensurethesuccessoftheenergytransition–inGermany,Europeandtherestoftheworld.Theorgani-sationworksindependentlyofeconomicandpartisaninterests.Itsonlycommitmentistoclimateaction.AgoraIndustryisadivisionofAgoraEnergiewendethatdesignsstrategiesandinstrumentsforclimate-neutralindustrialtransformation.

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