Colombia, with great potential to produce green and blue hydrogen

Colombia, with great potential to produce green and blue hydrogen

For Colombia, the implementation of green and blue hydrogen as an energy source would have numerous benefits. In general terms, the reaction of hydrogen with oxygen is capable of generating energy, and this can be used in different industrial applications, in other words: the versatility of hydrogen allows it to be transformed into electricity or synthetic fuels and used for commercial, industrial or mobility purposes.

(Ecopetrol and Toyota make an agreement for mobility with hydrogen).

Hydrogen is the most abundant chemical element in nature. Depending on how it is obtained, hydrogen is classified as grey, blue or green. Today most of the hydrogen is still produced from fossil fuels, and specifically, from natural gas, which entails the generation of carbon dioxide emissions into the environment. When sequestration systems are implemented for the carbon dioxide generated at the end of this process, the environmental impact is reduced, obtaining the so-called blue hydrogen. Green hydrogen has been recognized as totally sustainable, as it does not emit polluting gases during combustion or during the production process.

The signing of the Conpes 4075 Energy Transition document proposed ambitious goals for Colombia, committing the industry to a 51% reduction in greenhouse gas emissions by 2030 and to achieve carbon neutrality by 2050. Similarly, this document aims to multiply by 100 times the installed capacity of Non-Conventional Renewable Energy Sources (FNCER) compared to 2018.

“Although it is an optimistic vision, it is foreseen in the Hydrogen Roadmap, prepared by the Ministry of Mines and Energy, according to which, Colombia could become from 2030 one of the main exporters of green hydrogen in Latin America, considering the characteristics of its winds, solar radiation, water resources and geographical location, as well as the necessary inputs for the production of hydrogen”, affirms Álvaro Josué Yáñez, Partner of the firm CMS Rodríguez-Azuero.

(Colombia is one of the most advanced countries in hydrogen).

The Colombian industry has proven to have the capacity to produce and get on the right track. Last July, after a call led by Fenoge, the government announced the approval of financing for 10 hydrogen projects for a total of $6,570 million. This money will be used to prepare pre-investment studies for projects in pre-feasibility or feasibility stages throughout the green and blue hydrogen value chain.

Added to these initiatives are the pilots started by companies such as Ecopetrol and Promigas. Ecopetrol contemplates investing USD 6 million in the development of a Hydrogen pilot at the Cartagena refinery, according to the guidelines of its Low Carbon Hydrogen Strategic Plan for Colombia; while Promigas has already started its first green hydrogen production pilot, which will be developed in five phases.

Now, for these goals to be met, the transition must maintain a beneficial fiscal framework and sound public policy guidelines. “This fiscal framework has to maintain the benefits that are already consecrated for the sector, in addition, it must provide a favorable social and economic environment that guarantees the good progress and entry into operation of the projects,” the partner added.

Hydrogen has immense versatility in its use, even in some consumption sectors that have traditionally been difficult to decarbonise, such as heavy transport, aviation or maritime transport. The National Government has repeatedly affirmed that the energy transition must be accelerated during the next 4 years, seeking to offer benefits for companies that implement the changes proposed in Conpes, such as: exclusion of goods and services from VAT; special deduction to determine income tax; exemption from customs duties, accelerated depreciation; and, exemption from income tax for the sale of energy from renewable sources.

(The importance of hydrogen in the energy transition of Colombia).

Finally, it can be affirmed that the country has made satisfactory progress in its energy transition, so much so that within the 2021 Energy Transition Index of the World Economic Forum, Colombia ranked 29th among 115 countries, only surpassed in the region by Uruguay and for Costa Rica.

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