KPMG estimates that 99% of hydrogen will be low carbon by 2050

It is estimated that 99% of hydrogen produced worldwide will be low carbon by 2050. This is what he pointed out study carried out by KPMG, it failed to say what this company is.

The most polluting sectors, such as electricity generation (still dependent on fossil sources), industry and transport, among others, must begin to change their energy source to this fuel in the next 30 years.

“The context is favorable for Latin America to play a fundamental role, as in addition to having natural resources and renewable sources, the development of which already feeds the energy systems of several countries, it is taking firm steps to become a regional reference in production and future exports of H2V (green hydrogen)”, said the research.

However, they reported that this transition will require governments to promote new legal frameworks and appropriate policies that encourage investment in this fuel and provide the public support and financing necessary to develop it.

Examples of these initiatives would be the promotion of research and development focused on H2V and its potential applications as an energy vector in the future, the application of incentives for the use of renewables, which include taxes on fossil fuels and prices on carbon emissions.

Furthermore, they emphasized that measures will be needed to facilitate contributions to the evolution of low-carbon hydrogen, such as tax incentives and production subsidies.

“In a sector that is in the initial phase of development, cooperation and international connection, such as availability and access to public financing, will also be important,” said KPMG.

The objective is to mitigate the high financial risk commonly associated with the initial phases of a product's life cycle and, at the same time, act as support to promote its progress in the medium term.

This should occur, according to the company, until private financing gradually replaces public financing, encouraged by reduced risks and greater profitability.

“Finally, it should be noted that the role that each country must adopt in the development of low-carbon hydrogen does not only depend on the planning and strategic objectives defined by their governments, but also on the adoption and use of renewables. And that is one of the main advantages of Latin American countries”, they emphasized.

more data

The KPMG survey also highlighted that hydrogen should reach 210 million tons by 2030 and 530 million tons by 2050, with an increasing contribution from hydrogen from renewable sources.

Following these premises, it should represent 18% of total global demand in 2025, 70% in 2030, 91% in 2040 and 99% in 2050.

Hydrogen costs

Argentina, Brazil and Chile are emerging as the cheapest hydrogen producers by 2050, with costs that could reach US$0,55/KgH2 for that year – thus making H2V a very competitive alternative, even for gray hydrogen, which accounts for the largest production of this type of fuel today.

Renewable energy in Latin America

Latin America, and particularly the countries that make up the southern cone of the region, stand out globally for their potential for renewable energy production.

According to data from IRENA (International Renewable Energy Agency), the region has shown great growth in installed generation capacity with this type of source in the last 10 years (more than 60% between 2010 and 2020).

The supply increased from 155 thousand MW to 250 thousand MW, with a growing share of sources other than hydroelectric, such as solar and wind which, due to their abundance and decreasing costs, have been gaining ground in the energy generation supply.

Furthermore, a survey by the IEA (International Energy Agency) reveals that currently around 55% of electricity generation in Latin America comes from renewable sources.

In this scenario, driven by climate change and the global need to reduce polluting emissions, low-carbon hydrogen, especially green hydrogen, has attracted the attention of countries and governments due to the potential that Latin America has to produce and export large volumes of this product. , in the long term, in a competitive way in the future.

“The latent opportunity, added to the good productive conditions in the region, has been promoting a set of initiatives focused on green hydrogen, which already has a large number of projects in different phases of development, such as concept stage, feasibility study, financing, construction or operational situation”, highlighted the study.

These projects are already under development in several countries, such as Chile, Bolivia, Argentina, Brazil, Colombia, Paraguay and Uruguay”, they concluded.