Mexico's green hydrogen industry eyes US$20bn potential investments in 16 projects

Mexico is home to 16 green hydrogen projects requiring total investment of US$20bn, hydrogen association H2 México estimated Wednesday.

In a press conference in Mexico City, H2 México president Israel Hurtado said construction of some of the projects could begin by the end of 2025 or in 2026, according to media reports.

Of the 16 green hydrogen, ammonia and methanol projects that have been identified, eight are in early development, the association said. The other eight have only been announced. 

Mexico has extensive wind, solar and geothermal resources to produce green hydrogen via electrolysis. 

Green hydrogen could replace fossil fuels in transportation and heating and in industries such as mining, metals and chemicals.

The association said that with government support Mexico could also become a major exporter of hydrogen, including to Asia.

Incentives needed

Green hydrogen is more expensive to produce than so-called gray hydrogen.

In Latin America, the cost to produce 1kg of green hydrogen was as high as US$6 in 2020, the association estimates. That contrasts with as little as US$0.75 per kg for grey hydrogen produced by steam methane reformation in refineries.

The hydrogen association is calling on the Mexican government to support the growth of the green hydrogen industry by introducing new regulations, technical standards and tax incentives.

Unlike other Latin American countries such as Chile and Colombia, Mexico does not have a national hydrogen strategy, the association said.

On Wednesday the association published its own "industrial strategy for clean hydrogen in Mexico" which contains a series of recommendations for the government.

The full presentation, in Spanish, can be downloaded in the documents box in the top-right corner of the screen.

Distribution of Mexico's 16 hydrogen projects

Source: H2 México