PANAMA, Aug 9 (IPS) – In 2021, the Panama Canal allowed the French experimental vessel Energy Observer to cruise around the world, the first electric ship powered by a combination of renewable energy and a seawater-based hydrogen production system.
The vessel is an example of Panama’s aspirations to become a regional hub for hydrogen, the most abundant gas on Earth, but it faces an existential decision about whether to produce that hydrogen from renewables or fossil fuels.
This Central American country with a population of just over 4 million people In developmentAlthough late, the first step of the roadmap has been realized. National Green Hydrogen and Derivatives StrategyApproved in 2023.
To Juan Lucero, Coordinator of the Department of Environment National Climate Transparency PlatformGiven its renewable energy, strategic location, and the impact of international policies to reduce greenhouse gas (GHG) emissions from maritime transport, green hydrogen would be the best choice.
“Panama has natural gas, and companies are interested in getting involved in this business, in this case blue hydrogen. If Panama wants to be a hub, blue is a good option,” he told IPS.
“For Panama, it has always been a priority to provide services and to be an energy hub,” he stressed. “We have the tradition, the experience, the history as a hub for supplying bunker (petroleum distillate) vessels. The idea is to make that transition.”
Hydrogen production, used by the fossil fuel industry for decades, now comes in a palette of colors depending on its origin.
So the “gray” comes from the gas and depends on the modification of the pipelines to transport it.
By comparison, “blue” has the same origin, but the carbon dioxide (CO2) it produces is captured by plants. Its production is based on steam methane reforming, which involves mixing the first gas with the second gas and heating it to obtain a synthesis gas. However, this releases CO2, which is a major cause of global warming.
Meanwhile, “green” hydrogen is obtained through electrolysis, where it is separated from the oxygen in water by an electric current.
The latter type joins the clean source range to drive the energy transition away from fossil fuels and develop a low-carbon economy. However, hydrogen today is still largely derived from fossil fuels.
Panama joins Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Paraguay, Peru and Uruguay, which have national hydrogen policies of varying shades.
ambition
In 2022, the Panamanian government established a High-Level Green Hydrogen Council and a Green Hydrogen Technology Council to pursue a roadmap in this direction.
However, there has been no progress in establishing free trade zones for the trading and storage of green hydrogen and its derivatives, revising regulations, and encouraging port activities such as the use of electric vehicles, the installation of distributed solar systems, the introduction of energy efficiency, and the production of heat through solar energy.
The Green Hydrogen Strategy, approved in 2023, contains eight goals and 30 action points and aims to produce 500,000 tonnes of energy and derivatives annually by 2030, meeting 5% of marine fuel supply.
It is estimated that in 20 years it will account for 40% of global marine fuel supply.
But realizing this potential would require 67 gigawatts (GW) of renewable energy capacity, a significant amount for a country whose economy relies heavily on the ocean canal linking the Pacific and Atlantic oceans. The canal opened in 1914, and a century later, an expansion project doubled its capacity and began operations in 2016.
In 2023, Panama’s energy mix relied on hydro, gas, wind, bunker, solar and diesel. Installation capacity 3.47 Gw by early 2024. Panama I currently have At least 31 solar power plants and three wind farms.
In 2021, electricity generation accounted for approximately 24 million tonnes of CO2 emissions, with the largest contributors being energy (70%) and agriculture (20%).
But in 2023, the country declared itself: carbon neutralThat means forests capture pollutants that would otherwise be released into the atmosphere, resulting in negative greenhouse gas emissions.
The national strategy includes building a 160-megawatt (MW) solar power plant and an 18-MW wind power plant in the south-central region, and a second 290-MW solar power plant in the northern province of Colón.
The province plans to build a green ammonia production plant with an annual capacity of 65,000 tonnes and an investment of $500 million to supply future demand for marine fuel.
Global Shipping Sector consider Hydrogen, ammonia and its derivative methanol should be viable. The latter, which is used to make fertilizers, explosives and other products, can be obtained from green hydrogen.
The annual demand for green ammonia is expected to reach up to 280,000 tonnes by 2040, requiring 4.2 GW of electrolysis capacity.
Leonardo Beltran, Non-resident researcher In the non-governmental American InstituteIPS explained the process of establishing a strategy, setting an institutional vision, and setting short-, medium-, and long-term goals.
“They have made huge strides in a relatively short period of time. They already have the infrastructure, the canals. If that demand can be met, it could be a game changer. If they can connect the canals to other ports, to the United States or Europe, they could have a (green) corridor that would anchor that demand. That would drive local and regional development,” he said in Mexico City.
Panama, with support from the Inter-American Development Bank (IDB) and the United Nations Environment Programme (UNEP), is developing pre-feasibility studies on green hydrogen production, conversion to ammonia, installation of ammonia supply stations as a clean marine fuel, and production of green aviation paraffin.
The roadmap shows that hydrogen production in Panama, import of green ammonia and processing of green marine fuel are more feasible.
Additionally, given the presence of an air transport hub in the region, the country is considering manufacturing green paraffin for aviation, but this is still in the experimental stage and would be a much longer process than for transportation.
harmony
The hydrogen strategy is driven by Panama’s logistics, energy and climate change needs.
Panama is currently 10 Tax-Free Fossil Fuel RegionsIt has a storage capacity of more than 30 million barrels (159 liters) and one tax-exempt liquefied fossil gas area, which could become a model for future hydrogen production areas.
In 2021, this country was shipped Supplying 42.79 million tons of fuel to over 44,000 shipsBy 2030, this figure will increase. By comparison, hydrogen transiting the canal will reach 81.84 million tonnes in 2030 and 190.96 million tonnes in 2050.
As part of its voluntary climate contribution under the Paris Agreement, Panama has committed to reduce total energy sector emissions by at least 11.5% by 2030 and 24% by 2050 compared to 2019 levels.
At the same time, the Panama Canal, through which 6% of world trade passes from 2021, will also be self-sufficient. Sustainable Development and Decarbonization Strategy.
The Panama Canal Authority’s plan includes investing about $8.5 billion over the next five years to achieve carbon neutrality by 2030 by introducing electric cars, tugboats and boats that run on alternative fuels, replacing fossil fuels with solar power and tapping into hydroelectric power.
The canal reduces about 16 million tonnes of carbon dioxide each year.
With tolls and transportation services being the largest sources of revenue, developing clean hydrogen-based transportation fuels is critical.
In the first nine months of 2023, 210.73 million long tonnes (1,016 kg) were transported via marine infrastructure, down from 218.44 million long tonnes in the same period in 2022.
One third of all cargo is fossil fuels. Containers, chemical, gas and bulk carriers are the main transport modes.
Lucero said the country is looking to invest in renewable energy, particularly green hydrogen.
“This market needs to develop in an orderly manner. It needs to drive demand. Otherwise, the investment will not be profitable. There is uncertainty, but the path taken is that hydrogen is the future, and we want to move from being followers to being leaders, seizing the moment to develop and being ready for the boom when it comes,” he emphasized.
According to expert Beltran, if the government that takes office on July 1 follows this path, it will send a strong signal to the shipping sector and push it towards the energy transition.
“It is more convenient to replace imports with local products, and the way to do this is with available renewable resources. This will impact regional development and contribute to the energy transition agenda,” he said.
© Inter Press Service (2024) — All rights reservedOriginal Source: Inter Press Service
