Latin America and Caribbean Hydrogen Market Report - 2024

The Latin America and Caribbean region is uniquely placed to take advantage of the increasing demand for low-carbon hydrogen globally. The region is a global leader in terms of the proportion of renewable energy within its power generation mix, with renewables in South and Central America accounting for a 73% share of overall generation in 2023. This is expected to rise to 77% by 2035. Although the region's renewable energy generation is buoyed by a strong base of hydropower capacity, the region also offers some of the best climatic conditions for solar PV and wind generation in the world, which are expected to experience a 14% and 6% annual growth between 2023 and 2035, respectively, as a result. Due to this, the region is increasingly being viewed as a promising site for producing low-cost green hydrogen for both domestic use as well as international exports. Although the LAC region currently holds a small share of global active (0.3%) and upcoming capacity (7.4%), the region's hydrogen market has experienced a significant uptick in activity in recent years. The LAC's low-carbon hydrogen capacity is expected to exceed 5mtpa of capacity in 2030 in a high case scenario with strong policy support and just under 2.7mtpa of capacity in a low policy support scenario. Similar to many other regions, transportation is emerging as the dominant end-use sector, with developers announcing just under 2.9mtpa of capacity being allocated towards this use case. The LAC region's low-carbon hydrogen market has previously suffered from low levels of participation and a lack of clear policy direction at the national level. As a result, production capacity is chiefly concentrated in Brazil and Chile, which have both given clear signals to industry in terms of the opportunity posed by low-carbon hydrogen.

Latin America and the Caribbean is currently a minor player in the global hydrogen market, accounting for less than 1% of active production capacity. The region has the potential to produce low-cost green hydrogen by capitalizing on its renewable energy resources. However, overall greater policy support and incentives at the national level are required to provide clear industry signals and encourage investment.

Key Highlights

• Despite the LAC's strong potential in the renewable energy space, the region has been a relatively slow mover in the context of the low-carbon hydrogen market
• The region holds a relatively small standing in terms of the global capacity landscape, accounting for 7.3% of the global total of active and pipeline production capacity.
• In a low-case scenario, the LAC's hydrogen capacity would reach 2.7mtpa by 2030. However, with the likelihood of increasing financial support and growing hydrogen markets around the world, it will likely hit the high-case scenario of 5.1mtpa capacity by 2030.
• Transportation, other industrial, and power are the three most targeted end-use sectors by LAC active and upcoming projects. This reflects hydrogen's potential as a decarbonization pathway for typically difficult to decarbonize sectors such as long-range transport and heavy industry.
• Some hydrogen developers are focusing on the refining sector as an end user of hydrogen. Panama currently leads in terms of the hydrogen capacity being allocated to refining with 405ktpa, followed by Brazil with 150ktpa.

Scope

• Latin America and the Caribbean low-carbon hydrogen capacity outlook
• Key regional projects
• Key companies operating in Latin America and the Caribbean's hydrogen market
• Hydrogen end use sectors
• Hydrogen policy in North America at both the national and regional level
• Deal activity related to hydrogen in North America
• Company filings analysis of North America headquartered companies

Reasons to Buy

• Identify the market trends within the region and key players in hydrogen technologies.
• Develop market insight of current, in development and announced capacity and latest trends of the sector.
• Understand the region's different scenarios for 2030 based on the likeliness of the projects.
• Look at the demand in key application areas for the country.
• Facilitate the understanding on how and where the market is growing as it is rapidly scaling up to position as one of the main topics of the international and national agenda.