Mexico is behind other Latin American countries in its efforts to develop green hydrogen projects, but some investments are emerging. Argus spoke with Israel Hurtado, president of the Mexican Hydrogen Association (AMH), to discuss the country's main challenges and competitive advantages in hydrogen.
Does Mexico have any green hydrogen projects, or companies already investing in the technology?
Mexico has close to 150 renewable power generation projects that have the potential to produce green hydrogen. That is the importance of Mexico — it is a country with a huge potential in renewables. Green hydrogen is considered green if the process to produce it — this is the power used in the process that separates the water molecules — also comes from a renewable source.
In the association we have identified projects that are on their way with earmarked budgets in the states of Hidalgo, Guanajuato, Baja California, and Chihuauhua, some still in the pre-study or preparation phases, but a couple more advanced ones.
More or less we have seen [planned] investments of around $1.35bn in the first two projects in Durango and Guanajuato.
How does this compare with development in other countries in the region?
To be honest this is very low compared with the leader that is Chile, where we see investments of close to $200bn.
Their success has had to do with a combination of factors, but the most important one probably is that very early they drafted a map, a route for the development of this market — with the industry and the government hand-in-hand and side-by-side with scientists. I think that was one of the main factors that allowed the early development of that market.
Does Mexico have any competitive advantage besides its renewable potential?
Mexico, besides that renewable potential mostly because of its solar capacity, has a great advantage in its ability to export the product to the US — but also to Europe and Asia — because of its location. Mexico can be one great producer if it takes the opportunities to decarbonize the developed markets.
What are the production and legal hurdles?
The truth is we do not have any specific regulations yet. It is a gray area, although some legal principles that have been applied to natural gas can also be applied to hydrogen.
Yet there is indeed a lack of norms, and in general a national hydrogen strategy that allows for setting goals, objectives and timelines in an organized and efficient manner. In terms of the production hurdles, those are not really specific to Mexico, but they relate to the still high production costs. The challenge for the industry is to drop those costs and make it competitive with other transitions and clean fuels.
What about the association? How was it founded and how is it funded?
At the end of last year I left my responsibilities as head of the solar association, and several companies were pushing for a Mexican association that could bundle the common topics of hydrogen. It was a natural step for me.
What we wanted, and this is from discussions with diverse companies, was to integrate participants from the whole value chain. We have Siemens, Mitsubishi, Hitachi that are the main producers of the electrolyzers. Siemens is already working with trains and buses fueled by hydrogen in Japan and in Europe. We also have the transporters such as Infra, NG and companies that have related traditionally to natural gas but are also working with hydrogen, such as Gas Natural del Noroeste and Fermaca. These are some of the companies that are participating, as well as Enel, Mitsui, Iberdrola. In total, we have 50 companies in the association.
