Enabling Long Term Decarbonisation Pathways through Power-to-X (PtX Pathways)

Start & End Date: 2021-2024

Country/Countries: Argentina

Multilateral Institution(s) Involved: GIZ

In 2019, Argentina’s aggregated demand for hydrogen by domestic industries amounted to 350,000 tons (IEA). Presently, grey and captive hydrogen covers this demand. The grey hydrogen is generated from imported or domestically extracted natural gas, therefore adding to the country’s climate emissions. In the long-run, Power-to-X could enable various local industries, such as the steel and chemical industry as well as fertiliser production to operate climate-neutrally. The demand for fertilisers, for example, has almost tripled in the last 20 years. Although local production is growing rapidly, there is still a high dependency on imports, covering 65% of domestic fertiliser consumption in 2020. Locally produced PtX based fertilisers would offer a chance for Argentina to reduce import dependency and volatile commodity prices, while reducing its carbon footprint. The steel sector is another relevant vector in Argentina’s economy: According to the Argentinian Chamber of Steel, when all the value chains related to steel are considered, they account for 60% of Argentinian industrial activity, while the steel industry alone accounts for nearly 8 %. As of the last national greenhouse gas inventory the steel and iron sector represent roughly 3.5% of national GHG emissions. Before the pandemic, Argentina produced around 5 million tons of steel annually, of which nearly 20 % was destinated for export. Sustainably produced steel could become interesting for international buyers. In 2021, several members of the chamber expressed their commitment to emission reductions. One of the outlined strategies contains the use of green hydrogen in steel reduction processes in the future, however only in the long-term. To tackle the shift from grey to green hydrogen – generated using renewable energies – Argentina must first increase the share of renewable energies in its electricity mix. In 2020, renewable energy accounted for approximately 10 %. According to the Argentinian law 27.191, passed in 2015, the aim is to reach 20 % by 2025. To achieve this goal, the country can take advantage of its great natural potential for the expansion of inexpensive wind and solar energy. In some parts of Patagonia, for instance, wind parks reach capacity factors above 50 % and the solar irradiation in northwestern regions of the country can reach up to 2000 kWh/kWp. Nevertheless, currently the expansion of renewable energies is slowed down and for relevant use of green hydrogen and PtX in the long run, the share of renewable energies should increase significantly, also beyond 20 %.

In Argentina, the PtX Hub works on 1) supporting local institutions in the field of Power-to-X to promote the development of a hydrogen and Power-to-X market to strengthen capacities in Power-to-X and green hydrogen, 2) Modelling allocation scenarios for Power-to-X products, e.g., hydrogen as a base product for chemical processes and steel production for export, and developing recommendations on how to integrate the results into sectoral strategies, 3) Supporting the Argentinean Government with technical studies and recommendations regarding the regulatory framework or the development of a hydrogen strategy by analysing e.g. socio-economic effects of a transition towards hydrogen or local infrastructure to produce hydrogen and Power-to-X, 4) Promoting cross-sectoral and regional dialogues to connect relevant actors from the academic, economic, and civil society sectors and integrate knowledge and exchanging experience through the regional platform H2lac.

The PtX Hub projects (PtX Dialogue and PtX Pathways) together with the International Power-to-X Hub Berlin organised a two-day training on green hydrogen and power-to-X in Argentina: Around 15 decision makers from three ministries and civil society learned about the value chain of green hydrogen and power-to-X and addressed the opportunities of green hydrogen and power-to-X in future energy systems. In a transfer workshop, the participants discussed the potentials in Argentina and the next steps to start Power-to-X concepts.