Pemex and CFE green hydrogen plans seen as positive for the market

Mexico's state-run electricity company CFE and national oil company Pemex are considering setting up a joint venture to produce green hydrogen in a Pemex refinery.

CFE provided more detail on the idea in Pemex's sustainability plan, published in March this year, in a recent interview with Bloomberg.

"This is relatively new and it is positive for the green hydrogen industry," Israel Hurtado, head of hydrogen industry association H2 México, told BNamericas.

Mexico still needs to pass new laws governing hydrogen to grow the market, he added.

Iris Cureño, who is in charge of coordinating priority projects at CFE, said that the most likely location for the joint venture to produce hydrogen would be Pemex's Salina Cruz refinery in Oaxaca state.

"The most important thing is that it's produced where it's consumed," she was quoted as saying by Bloomberg.

Cureño also highlighted the lack of a legal and regulatory framework in Mexico for producing, selling and exporting green hydrogen.

Oil companies mainly produce hydrogen from natural gas and use it to lower the sulfur content of fuel produced at their refineries. Making hydrogen this way releases greenhouse gases into the atmosphere.

Green hydrogen is produced using renewable energy, such as solar or wind power, with no emissions.

In its sustainability plan, Pemex says it may team up with CFE to make hydrogen from wind power. It only expects to produce green hydrogen in its Mexican refineries from 2035.

Pemex's hydrogen plans are not limited to Mexico.

The company may carry out a pilot hydrogen project in its Deer Park refinery in Houston as soon as 2025, according to its sustainability plan.

This could be green hydrogen or blue hydrogen, which is produced from natural gas but with carbon capture.

By 2030, Pemex could start importing green hydrogen from Texas by pipeline, for use in its Cadereyta refinery in the border state of Nuevo León.