Panama is set to present its national strategy for green hydrogen and its derivatives for public consultation on April 28.
The plan includes three key objectives: the production of green hydrogen, logistics and storage, and commercialization of energy vectors. The goal is to reduce the country’s dependency on fossil fuels by establishing itself as a green hydrogen hub, with the capacity to produce at least 500,000 tons of green hydrogen per year by 2030. The country aims to consolidate logistics, storage, and commercialization of these energy vectors, with the construction of a green hydrogen, ethanol, methanol, and kerosene transformation plant in Panama valued at approximately $500 million.
In addition, Panama seeks to reduce the use of fossil fuels in the maritime industry, where it supplies fuel to approximately 5,000 ships each year. The goal is to replace at least 5% of bunker fuel with renewable and clean fuel such as green hydrogen, green ammonia, or green ethanol. The country is preparing a special bill that will provide incentives for those investing in green hydrogen projects and their derivatives.
The European Union is also interested in Panama’s energy transition projects, such as electric mobility, green hydrogen, and universal access to basic electricity services. The EU is eager to promote financing mechanisms for the energy transition and showcase the energy transformation model it has developed, which could be utilized in Panama and Central America.
Panama is one of the few countries in Latin America with a clear plan for the use of green hydrogen, and it could become an important player in the region’s energy transition. However, some challenges may arise, such as the high cost of green hydrogen production, the need for massive infrastructure investments, and the establishment of a regulatory framework. Despite these challenges, Panama’s commitment to becoming a green hydrogen hub could pave the way for other countries in the region to follow suit.