The North American green hydrogen economy is being turbocharged by powerful incentive structures, and Mexico stands to gain if it can take the chance.

According to environmental advocacy group NRDC, a tax credit for clean hydrogen generation included in the US Inflation Reduction Act passed last year, to be implemented by the Internal Revenue Service (IRS), could make the nation one of the most prosperous early green hydrogen markets in the world.

The potential in Mexico for the near future are focused on the state level rather than the federal level, where the country’s energy policy is considerably different.

While many nations want to establish themselves as long-term low-cost producers, the US has local applications and the industrial capacity to begin implementing hydrogen on a more accelerated timeframe.

Early applications include local transportation, heavy industries, and fertiliser production. In a later stage of development, large-scale hydrogen production hubs geared towards exports and long-distance transportation by truck, plane, and ship would be established.

As the US, Canada, and Mexico recently said they would collaborate on developing regional standards for the industry with the eventual objective of developing “a North American clean hydrogen market” and “cross-border hydrogen clusters,” hydrogen will play a larger part in the trilateral agenda.

The public electricity company CFE is working on a green hydrogen pilot project that would use some of the energy generated by the US$1 billion Puerto Peasco solar park, which is now under construction. It has also incorporated green hydrogen development in its long-term business plan.