Argentina is reviving discussions on a regulatory framework for clean hydrogen, including support mechanisms, but industry participants do not expect major exports from the country before 2040.
Senator Edith Terenzi has introduced a bill for a regulatory framework drawn up by industry association Plataforma H2 last year. Terenzi and Plataforma H2 presented the plans to two senate committees on 4 June, stressing the urgency to move ahead in order to help the industry get off the ground.
"The hydrogen industry is taking off all over the world, including in countries in the region like Brazil, Uruguay and Chile" where incentives schemes have already been drawn up and where infrastructure developments have started, Terenzi said. "Argentina needs to accelerate the process to enter the global hydrogen league."
This view was echoed by Santiago Enriquez, project manager for green hydrogen at the German chamber of commerce in Argentina. "Nobody is waiting for Argentina," Enriquez said. "Argentina is just another player in the developing global market" and the country must draw up a regulatory framework and support structure that is as competitive as possible to draw investments, Enriquez said.
Terenzi acknowledged that the process "will take a long time" and stressed that any planning will have to be for the long term and aimed at "large-scale" investments.
Like many South American peers, Argentina started to work on a regulatory framework years ago. It aims to capitalise on solar and wind power potential, especially in Patagonia, and is also eyeing low-carbon hydrogen production from natural gas with carbon capture and storage, drawing on reserves from its Vaca Muerta shale basin.
But plans have stalled in recent years, arguably in part because of changes in government.
The administration of President Javier Milei, which took office in December 2023, has put in place the Incentive Regime for Large Investments to support energy and other projects with more than $200mn in investments through tax incentives. But industry participants have argued that the scheme is not suitable for hydrogen projects as it is only open for two years, which is too short for major projects to be realised.
Terenzi reiterated this today, stressing that the bill she put forward based on Plataforma H2's proposal foresees much longer realisation periods.
Plataforma H2 is proposing an "entry window" — the timeframe during which projects would start operations — of 20 years for renewable hydrogen and 10 years for CCS-based hydrogen. Incentives should then be available for 30 years for renewable projects and for 15 years for CCS-based plants, said Carina Quispe, project co-ordinator at the Environmental Policy Circle, a member of Plataforma H2.
Incentives provided would include tax credits and exemptions on customs duties on imported goods, among other measures. Beyond production projects, they would also cover other hydrogen initiatives, including for distribution and storage.
Such incentives must be provided with a long "entry window" partly because Argentina will probably only be in a position to export renewable or CCS-based hydrogen by 2040 or 2050, Quispe said.
Production projects will still be on a small scale well into the 2030s, Quispe noted. These should still also be allowed to apply for incentives under the bill and there would be no minimum project size, she added.
A draft bill from the previous government in 2023 — which was not enacted — had foreseen domestic content requirements of 35-50pc for renewable hydrogen production projects and 20-30pc for CCS-based initiatives that would seek incentives. But Plataforma H2's bill does not include such requirements, with Quispe saying they would act as barriers for investment.
The law would also oblige the government to approve a national hydrogen strategy for 2030 within one year of it being enacted. This would have to include specific objectives on production capacity and other areas and would have to be reviewed regularly to monitor progress.
