Thursday, July 18, 2024

Uruguay’s Green Hydrogen Ambitions

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Diplomat Magazine
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DIPLOMAT MAGAZINE “For diplomats, by diplomats” Reaching out the world from the European Union First diplomatic publication based in The Netherlands. Founded by members of the diplomatic corps on June 19th, 2013. "Diplomat Magazine is inspiring diplomats, civil servants and academics to contribute to a free flow of ideas through an extremely rich diplomatic life, full of exclusive events and cultural exchanges, as well as by exposing profound ideas and political debates in our printed and online editions." Dr. Mayelinne De Lara, Publisher

Minister Elisa Facio of Uruguay, who oversees the Ministry of Industry, Energy, and Mining, recently attended the World Hydrogen Summit 2024 in Rotterdam. Her responsibilities encompass a broad spectrum of sectors critical to Uruguay’s development, including industry, energy, mining, small and midsize enterprises (SMEs), and telecommunications. She also manages the regulation of atomic energy for medical purposes and the registration of trademarks and patents. Known for her commitment to promoting equity and empowering women economically, Minister Facio shared her insights and vision for Uruguay’s future in an interview with Diplomat Magazine.

“As Minister of Industry, Energy, and Mining, I oversee a variety of competencies related to production. We are responsible for designing public policies on energy, industry, telecommunications, industrial property, handicrafts, SMEs, mining, and geology. Innovation and sustainability are central to each of our tasks; every action we define is reviewed with a focus on how innovative and sustainable it is.

Delegation of Uruguay at the World Hydrogen Summit 2024 in Rotterdam.

Uruguay has an innovative, mature, and thriving ecosystem. Therefore, we are prioritizing the internalization of this ecosystem, generating a greater connection with the world and its demands. Our focus is on articulated actions between private companies, public institutions, and academia. We prioritize three key sectors: clean or green technologies (greentech), biotechnology (biotech), and advanced technologies (deeptech). Additionally, we are creating open laboratories— infrastructures available for startups to test and develop proofs of concept, supported by leading global corporations.

Recently, we launched the Uruguay Innovation Hub program to position the country as a regional hub and global reference in addressing global problems through innovation. Uruguay is committed to the ambitious global goals of decarbonization by 2050 and has promoted significant changes regarding energy sources and the raw materials used in industrial processes. Our second energy transformation includes decarbonizing transport and industry and developing a green hydrogen economy for local and export markets. Efficiency and sustainability in transportation are priorities, with electric mobility as a key axis of our sustainable mobility strategy. The development and deployment of critical and emerging technologies are essential for these efforts.

DM – Uruguay has been making strides in renewable energy, particularly with wind and solar power. How do you envision the role of hydrogen in Uruguay’s energy mix, and what steps is your ministry taking to promote its development?

With growing concerns about climate change, reducing greenhouse gas emissions is more pressing than ever. Green hydrogen presents an attractive solution for the ‘hard-to-abate sectors’ such as heavy and long-distance transport, shipping, aviation, and industrial uses in iron, chemical, and petrochemical industries. Uruguay has much to offer and gain with green hydrogen and derivatives because it requires electrical energy from renewable sources like the sun, wind, water, and biomass.

Our energy matrix is almost 100% renewable, with excellent complementarity of solar, hydro, and wind energy. We have the availability of water and biogenic CO2, which allows us to advance in the synthesis of dephosphilized carbon derivatives, such as methanol or e-fuels. The Ministry has various tools to promote the development of green hydrogen, including the Green Hydrogen Sector Fund, which supports the installation of the first pilot project in the country, modifying trucks to be propelled by clean energy.

Uruguayan Minister Elisa Facio.

We have signed agreements with several countries to generate a favorable framework for project development, promoting international collaboration in research, technological development, infrastructure analysis, and implementation of public policies. These agreements also facilitate knowledge sharing, establish common standards, and accelerate the transition to a clean and sustainable energy economy.

There are fiscal incentives for large-scale green hydrogen and derivatives projects, such as the Investment Promotion Law. Since 2022, hydrogen has been included in the matrix of indicators for projects, creating an incentive framework for investments in the country, applicable equally to both domestic and foreign investors.

The digitalization of the industrial and energy sectors is progressing significantly and holds great growth potential. Uruguay has leading infrastructure in Latin America for fiber optic networks, fixed broadband internet, internet download speed, and digital government. Our population is highly digitized, and we have globally competitive software professionals. Adopting technologies such as the Internet of Things, Big Data, robotics, and artificial intelligence is optimizing processes, improving efficiency and productivity in the industrial sector, known as Industry 4.0.

Two key initiatives accompany the digitization of the industrial and energy sectors. First, the new Investment Law decree and the Electronics and Robotics Fund (FER), which supports projects developed by companies in the electronics sector. Second, the Uruguay Innovation Hub program aims to implement an open laboratory to develop software and AI applications to enhance electric mobility capabilities.

DM – Gender equity and empowerment have been central to your career and advocacy efforts. How do you plan to integrate these principles into your role as Minister, particularly in traditionally male-dominated sectors like energy and mining?

I have been working for several years to help more women achieve economic autonomy and manage their finances. I am proud to occupy a reference position as a minister, demonstrating that women can hold power, have a family, and develop professionally. Often, women decline responsibility roles fearing neglecting their families or avoiding exposure. However, we have made significant progress in equal opportunities, and there is undoubtedly more support now. For example, it is more natural for the new generations to see men taking more responsibility at home and in raising children.

The Ministry is committed to gender equity, particularly promoting women’s economic autonomy and digital literacy. The MIEM develops various programs and incorporates gender perspectives in its cross-cutting policies. For instance, the 8M call for women entrepreneurs provides non-refundable funds to promote their projects. Another initiative grants non-refundable funds for producing short films that highlight women in Uruguay’s productive sector.

We are present at the World Hydrogen Summit because it is one of the largest events dedicated to advancing hydrogen globally, and our country has successfully participated in previous editions. This year, we have a pavilion in the exhibition area, a networking space to showcase Uruguay’s potential and possibilities as an exporter of green hydrogen derivatives and fuels. We organized a parallel event to publicize our progress in the green hydrogen roadmap, present announced projects, and share preliminary results from studies conducted with Dutch collaboration.

Our participation includes an official delegation of institutions forming Uruguay’s green hydrogen ecosystem and a large business delegation of over 40 people. We emphasize our country’s strong institutionalism, deep republican sense, respect for the rule of law, openness to national and international private investment, socio-political stability, digital advancement, and leading position among the world’s major economies for sustainable investment according to the ESG index.

Minister Elisa Facio.

The support of our representations abroad is crucial to strengthening bilateral relations and positioning Uruguay in this emerging economy by promoting the export potential of green hydrogen and derivatives as a source of clean and sustainable energy. With the Netherlands, we have a Joint Declaration with the Ministry of Economic Affairs and Climate Policy to strengthen ties and intensify bilateral cooperation and knowledge exchange in standards, trade rules, technologies, policies, certification, and investment to support green hydrogen development. This Declaration has established a continuous, direct, and permanent working framework with the Dutch Government, facilitating technical collaboration to evaluate project profiles for the National Green Hydrogen Fund call for proposals. Dutch experts have also collaborated with ANCAP and the Ministry of the Environment in workshops on ‘Environmental Impacts and Regulation in the framework of offshore wind projects.’

Additionally, two Memorandums of Understanding were signed with the Port of Rotterdam. The first enabled a joint integrated pre-feasibility study of the commercially viable supply chain, identifying Uruguay’s production and export potential to Europe. The second, signed in May 2023 with various ministries and the National Ports Administration, aims to explore new opportunities for cooperation in green hydrogen and derivatives projects. This agreement facilitated a technical, economic, environmental, and safety analysis for the population and existing logistics infrastructure in Montevideo’s port for exporting green hydrogen derivatives.

Uruguay is committed to developing the green hydrogen economy to reduce climate change, generate growth opportunities, and contribute to sustainable development. This process requires developing the entire supply chain, policies, and incentives to generate and implement technology and investments for civil society to access these innovations.

International cooperation is fundamental, enabling us to pioneer strong policies and support closing R&D gaps. Together with technical cooperation, knowledge exchange, and international financing, these are key to developing clean energy with a positive societal impact.

Uruguay is positioned to face new and more ambitious challenges because we have a decarbonized electricity matrix. Direct electrification of some activity sectors is a pillar of action for our ministry, with several plans promoting the electrification of urban public passenger transport. Complementarily, the development of Power-to-X technology would allow progress in sectors where decarbonization is more difficult to achieve. For this reason, we see in the development of green hydrogen an opportunity that arises from the energy sector but impacts various sectors. Clearly, the production of green hydrogen derivatives would enable a very relevant industrial development for Uruguay. The Green Hydrogen and Derivatives Roadmap projects that by 2040, the green hydrogen and derivatives industry could have an annual turnover similar to that of the meat sector, an economic area for which our country is recognized globally.

Our work focuses on creating conditions so that this activity also promotes social development and generates opportunities for the population. Another major objective is to turn Uruguay into a regional hub for innovation, for which we have the talent, infrastructure, and institutional stability that makes our great differential.”

Diplomatic Magazine also wants to thank the Embassy of Uruguay in The Hague, for its continuing support to our activities, and to have facilitated this interview and contacts with Minister Elisa Facio and the whole Uruguayan delegation

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