By Claudia Mora Uscátegui
Partner of the Renewable and Non-Renewable Energy Practice at Pinilla, González & Prieto Abogados (Colombia)
www.pgplegal.com
Given the avalanche of promising news regarding this new and efficient energy source, which would largely replace traditional fuels in sectors such as transportation, electricity, and industry, many concerns arise about its applications as it is a costly gas to produce and difficult to handle, requiring significant investments in technology and infrastructure for its implementation as a sustainable and safe alternative.
According to different studies, among the leading countries in hydrogen is China, in the first place, consuming mainly gray hydrogen generated by fossil fuels, followed by the United States, and then there are countries such as the European Union, the Nordic countries (Finland, Sweden, and Denmark), India, Japan, South Korea, and Germany, which are making progress in projects that would be put into operation before 2030. This opens up a range of opportunities for economic growth and energy self-sufficiency that would translate into a global change in energy production and distribution in the future.
Among the countries mentioned, a minority has significant hydrogen consumption and production, showing that the situation around hydrogen in the world is conceived as an opportunity for the future, since there is still no certainty as to the costs of production, supply, and availability of renewable energy sources required to obtain it, considering 95% of the current hydrogen comes from fossil fuels.
To achieve these decarbonization goals, the objective is the production of Green Hydrogen, produced from Non-Conventional Renewable Energy Sources (NCREF) such as biomass, small hydroelectric, wind, geothermal heat, solar, and tidal, among others, (Energy Transition Law of 2021).
Colombia has an ecosystem rich in natural resources, conducive to the production of low-emission hydrogen; and with an infrastructure, location, and port conditions that would allow us to be leaders in terms of its production, storage, and transportation. Thus, it is a strategic country in Latin America for the development and export of this resource, which functions as a key energy vector in the transformation and decarbonization of the global economy and the deployment of the low-emission hydrogen industry in mining and oil areas, creating opportunities in regions with high potential for renewable energies, allowing a balanced economic development between territories.
Concerning the regulatory area, we have the Hydrogen Roadmap, aligned with the objectives of the 2015 Paris Agreement, the tax incentives established under Law 1715/2014, and the Energy Transition Law of 2021 for Green and Blue Hydrogen, (hydrogen produced from fossil fuels, with a carbon capture, use and storage (CCUS) system as part of its production process). The government must now face the challenges related to prior consultations, environmental licenses, and specific regulations covering the hydrogen ecosystem, its storage, and an attractive framework for investment.