Uruguay is planning to release a long-term strategy to progressively replace diesel in industry and heavy transportation with hydrogen, as well as a production-focused R&D effort.

Industry, energy, and mining minister Omar Paganini stated during a hydrogen event that the plan, which would also include a larger strategy, will be released in April.

Uruguay imports hydrocarbons yet generate the majority of its electricity from renewable sources such as wind and hydropower. A major component of any green hydrogen drive is cheap, abundant power from sustainable sources.

Uruguay, which is likewise promoting transportation electrification, has launched a US$10 million fund for green hydrogen R&D projects with a manufacturing emphasis. A request for project proposals is set to begin in April as part of the plan.

The fund’s first phase, which was launched by the energy ministry, the national research and innovation agency ANII, and the national technological laboratory Latu, is intended to aid in the start-up of production.

Green hydrogen and green hydrogen derivative initiatives are being sought by officials. ANII gave examples of e-methanol, e-kerosene, green fertilizers, and hydrogen-natural gas mixtures.

In April, the ANII website will post the bidding guidelines. The US$10 million funding would come in the form of a grant that would be paid out over ten years. According to a government presentation, projects must have electrolyzers with a capacity of above 1.5MW and be operational by 2025.

In light of this, officials have previously said that bidding processes for onshore and offshore green hydrogen production projects will be conducted in order to attract private participation. Uruguay is interested in both internal and international markets.

Ancap, the state-owned hydrocarbons business of Uruguay, has signed a memorandum of understanding (MOU) with IFC, a member of the World Bank Group. The agreement might lead to the availability of funding in the future.