Hydrogen from Renewables or Fossil Fuels? The Panamanian Question — Global Issues

by Emilio Godoy (panama)Friday, August 09, 2024Inter Press Service

The vessel exemplifies Panama’s aspiration to develop into a regional hub for hydrogen, probably the most considerable fuel on the planet, however faces the existential determination of whether or not to generate it from renewable vitality or fossil fuel.

This Central American nation of simply over 4 million folks is creating, albeit belatedly, the primary section of its roadmap to materialise the Nationwide Inexperienced Hydrogen and Derivatives Technique, permitted in 2023.

For Juan Lucero, coordinator of the Ministry of the Atmosphere’s Nationwide Local weather Transparency Platform, inexperienced hydrogen could be the best choice, given its renewable vitality, strategic place and the affect of worldwide insurance policies to scale back greenhouse fuel (GHG) emissions in sea transport.

“Panama has pure fuel, and firms are thinking about participating on this enterprise, on this case blue hydrogen. If Panama desires to be a hub, then blue is an efficient choice,” he advised IPS.

He careworn that “for Panama, it has all the time been a precedence to offer companies, to be an vitality hub. Now we have custom, expertise, historical past, as a hub for supplying bunker (a petroleum distillate) ships. The concept is to realize that transition.”

The manufacturing of hydrogen, which the fossil gas business has been utilizing for many years, has now been remodeled right into a colored palette, relying on its origin.

Thus, “gray” comes from fuel and is determined by adapting pipelines to move it.

By comparability, “blue” has the identical origin, however the carbon dioxide (CO2) emanating from it’s captured by vegetation. Manufacturing is predicated on steam methane reforming, which entails mixing the primary fuel with the second and heating it to acquire a synthesis fuel. Nonetheless, this releases CO2, the primary GHG chargeable for international warming.

In the meantime, “inexperienced” hydrogen is obtained by way of electrolysis, separating it from the oxygen in water by way of an electrical present.

The latter kind joins the vary of fresh sources to drive vitality transition away from fossil fuels and thus develop a low-carbon financial system. Immediately, nevertheless, hydrogen continues to be largely derived from fossil fuels.

In its completely different colors, Panama joins Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Paraguay, Peru and Uruguay in having nationwide hydrogen insurance policies.

Ambition

In 2022, the Panamanian authorities created the Excessive Stage Inexperienced Hydrogen and Inexperienced Hydrogen Technical committees to drive the roadmap in that route.

But it surely has not made progress within the creation of free zones for commerce and storage of inexperienced hydrogen and derivatives; updating rules; and inspiring port actions to make use of electrical autos, set up decentralised photo voltaic techniques, introduce vitality effectivity and generate warmth by way of photo voltaic thermal vitality.

The inexperienced hydrogen technique permitted in 2023 consists of eight targets and 30 traces of motion, foreseeing the annual manufacturing of 500,000 tonnes of this vitality and derivatives, to cowl 5% of the delivery gas provide by 2030.

In 20 years, the estimate rises to the provision of 40% of delivery fuels.

However this potential would require 67 gigawatts (Gw) of put in renewable capability, which is a considerable deployment in a rustic whose financial system is very depending on the exercise of the inter-oceanic canal between the Pacific and the Atlantic, inaugurated in 1914 and expanded a century later, in a mission that doubled its capability and got here into operation in 2016.

In 2023, the Panamanian vitality combine relied on hydropower, fuel, wind, bunker, photo voltaic and diesel, with an put in capability of three.47 Gw in the beginning of 2024. Panama presently has no less than 31 photovoltaic vegetation and three wind farms.

Electrical energy technology accounted for some 24 million tonnes of CO2 emissions in 2021, with the biggest contributors being vitality (70%) and agriculture (20%).

However in 2023, the nation declared itself carbon impartial, i.e. its forests seize the air pollution launched into the environment, having a damaging stability in GHG emissions.

The nationwide technique consists of the development of a 160 megawatt (MW) photo voltaic plant and an 18 MW wind energy farm within the centre-south of the nation, in addition to a second 290 MW photovoltaic plant within the northern province of Colón.

On this province, a inexperienced ammonia manufacturing plant is deliberate to provide the long run demand for delivery gas, with an annual manufacturing of 65,000 tonnes and an funding of US$ 500 million.

The worldwide delivery sector considers hydrogen, ammonia and its spinoff, methanol, to be viable. The latter, which can be used to make fertilisers, explosives and different commodities, could be obtained from inexperienced hydrogen.

A requirement of as much as 280,000 tonnes of inexperienced ammonia per yr is projected by 2040, which might require the set up of 4.2 Gw of electrolysis.

Leonardo Beltrán, a non-resident researcher on the non-governmental Institute of the Americas, advised IPS in regards to the strategy of constructing methods, institutional imaginative and prescient, and brief, medium and long-term targets.

“They’ve taken big steps in a comparatively brief time period. They have already got the infrastructure, the canal. If that demand is met, it might be a sport changer. Should you can join the canal to different ports, to the US or Europe, they may very properly have that (inexperienced) hall that will anchor a related demand. That might increase on-site and likewise regional technology,” he stated from Mexico Metropolis.

With assist from the Inter-American Growth Financial institution (IDB) and the United Nations Atmosphere Programme (UNEP), Panama is creating pre-feasibility initiatives on the manufacturing of inexperienced hydrogen, its conversion to ammonia and the set up of an ammonia dispatch station as a clear delivery gas, and on the manufacturing of inexperienced aviation paraffin.

The roadmap discovered to be extra possible the manufacturing of hydrogen in Panama, the import of inexperienced ammonia and the processing of inexperienced delivery gas.

Additionally, the nation is contemplating manufacturing inexperienced paraffin for aviation, provided that it hosts an air transport hub within the area, though testing is in its infancy and entails a for much longer course of than within the case of delivery.

Harmonisation

The hydrogen technique is a operate of Panama’s logistical, vitality and local weather change wants.

Panama presently has 10 tax-free fossil gas areas, with storage capability of greater than 30 million barrels (159 litre) equal and one liquefied fossil fuel space, that are tax exempt and might be the mannequin for future hydrogen technology areas.

In 2021, the nation shipped 42.79 million tonnes of gas to greater than 44,000 vessels, a determine that can develop by 2030. By comparability, hydrogen passing by way of the canal would whole 81.84 million tonnes in 2030 and 190.96 million in 2050.

In its voluntary local weather contributions below the Paris Settlement, Panama pledged to scale back whole emissions from the vitality sector by no less than 11.5% in 2030, from its 2019 stage, and by 24% in 2050.

In parallel, as of 2021, the Panama Canal, by way of which 6% of world commerce passes, is implementing its personal Sustainable Growth and Decarbonisation Technique.

The autonomous Panama Canal Authority’s plan consists of the introduction of electrical autos, tugboats and boats utilizing different fuels; the substitute of fossil electrical energy with photovoltaics and using hydropower, to develop into carbon impartial by 2030, with an funding of some US$8.5 billion over the following 5 years.

The canal reduces some 16 million tonnes of CO2 annually.

Tolls and delivery companies are its largest sources of income, and thus the significance of creating delivery fuels primarily based on clear hydrogen.

Within the first 9 months of 2023, 210.73 million lengthy tons (1,016 kilograms) went by way of the interoceanic infrastructure, down from 218.44 million in the identical interval in 2022.

Of the full cargoes, one third are fossil fuels. Container, chemical, fuel and bulk carriers are the primary transports.

Lucero stated the nation is in search of investments in renewable vitality, significantly inexperienced hydrogen.

“This market needs to be developed in an orderly method. Demand needs to be pushed; in any other case, the funding won’t be worthwhile. There are uncertainties, however the line that has been taken is that hydrogen is the long run and we wish to break free from being followers to develop into leaders, to grab the second to develop and be ready when the increase arrives,” he careworn.

For professional Beltrán, if the federal government that took workplace on 1 July follows this route, it might ship a robust sign to the sector and thus pull the delivery sector towards vitality transition.

“Changing imports with native product is extra handy, and the best way could be with the obtainable, renewable useful resource. That might affect native improvement and contribute to the vitality transition agenda,” he stated.

© Inter Press Service (2024) — All Rights ReservedOriginal supply: Inter Press Service

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