Argentine President Alberto Fernández has acknowledged potential complications in the Fortescue green hydrogen project, citing difficulties arising from the additional conditions requested by the Australian company.
While expressing confidence in the investment, President Fernández highlighted challenges related to compliance with specific conditions, such as the use of a special dollar exchange rate. The $8.4 billion project aims to establish large-scale green hydrogen production in Argentina’s southern province of Río Negro, but concerns have been raised regarding exchange rate restrictions and the need for a supportive regulatory framework.
Argentina’s stringent restrictions on the official exchange market, known as “exchange stocks,” require exporters to settle their currencies at rates significantly lower than the parallel exchange rates prevalent due to these restrictions. This arrangement creates obstacles in converting foreign exchange, affecting the project’s feasibility. In an effort to enhance exchange competitiveness, Argentina has introduced differential rates for specific export sectors, including the soybean complex, which involves the use of a “special dollar” exchange rate proposed by Fortescue.
President Fernández clarified that the project’s risk does not stem from the absence of a green hydrogen promotion law, which was expedited for submission to Congress after reports emerged suggesting Fortescue’s potential investment in Brazil. Rather, the challenges lie in the additional conditions put forth by the company. The Argentine Secretary of Energy, Flavia Royon, confirmed the submission of the Hydrogen bill to Congress, outlining a regulatory framework that offers fiscal stability for 30 years and promotes the integration of local value chains.
Fortescue Future Industries initiated environmental and social impact evaluations for the Pampas project in Punta Colorada, Río Negro, in September of the previous year. However, with the current complexities surrounding conditions and regulatory support, the realization of the ambitious green hydrogen project in Argentina faces uncertainties.