Well, let us give you an advance, yes it's happening but still a long way to go. If you put the topic in context, Latin America is just moving few pieces of the chess match, while Europe is clearly the front runner with USA and new Biden’s approach to climate change following closely. It is impressive the level of maturity you can see in Europe, in countries like Germany, Norway, The Netherlands, Finland, Denmark, Sweden (just to name few) all with pilots already ongoing, clear rules, Government supporting, technology leaders developing the next wave of solution. In retrospective, Latin America is not there, we are still missing a lot of cooperation, a very critical part of the energy transition and decarbonization challenge that you can see present in Europe for example. But there is some light at the end of the tunnel, let us give you a snapshot.
Colombia is finally moving into renewable energy and energy storage, two pillars for the decarbonization of their energy matrix. Ecopetrol is playing a key role there, with their CEO Felipe Bayon setting a net zero target by 2050, Ecopetrol is showing the direction to where the energy in Colombia will go. This will be a very challenging road for Ecopetrol for sure, but they are very serious on this objectives and already working in several fronts like decarbonization and CCUS, Green H2 production and alternative fuels.
Chile is the other very important hub for the region, as the Andean country is positioning as the spearhead for Hydrogen. Chile made clear that will pursue an integrated Hydrogen economy, at the level to be as important as the mining or the fishing industries for the country. Knowing Chile, that is a lot. Along the years, Chile showed clear rules to do business, economic stability, and access to financial markets, all these ingredients combined with very competitive Solar PV and Wind energy, a desalinization technology well proven for the mining projects, and the market moving on that direction, are making the Chilean objective something doable, even attractive. This is the reason why is not strange to see around 30 or more projects related with Hydrogen moving in Chile. Some related with Green H2, Green Ammonia, Methanol, Mobility, Power-to-X and others, clear examples like what Enel Green Power and AME are doing, as well as ENGIE, all very respected companies. In parallel, several actions will take place in order to replace or convert coal plants into gas, biogas or decommissioning some, impacting the country energy emissions in the good way.
Uruguay recently made public their intention to play a role in the Hydrogen world. With the leadership of ANCAP, UTE and the Government, Uruguay will look to promote the Hydrogen as fuel for heavy vehicles through the Verne project, reducing emissions, replacing diesel imports and creating value in country. There is also a potential for power generation and Green H2 for La Teja refinery. Uruguay has a clear advantage, Renewable energy is very present, at the point to reach almost 98% of the country generation in some days, the value chain is pretty developed, and has economic stability to think at long term. At 2022, around four serios projects are moving to further analysis stages.
Argentina is a complex scenario at least in the short and mid terms. The renegotiation of the foreign debt with the IMF was blocking all major investments in the country, the economy is still suffering the effects of the pandemic, and the rules are not clear enough for big infrastructure projects. Still, Argentina has a long history of make the impossible possible, and the ecosystem of companies is very rich. YPF, the Argentinean flag Oil and Gas company, entrust to their R&D arm Y-TEC to lead the way about Hydrogen. Y-TEC quickly put hands on, and launched the H2ar Consortium in 2020, were more than 30 companies cooperate and bring solutions in order to create the Hydrogen roadmap for Argentina. The ingredients are there as well, Argentina has very good Solar PV conditions in the north, very good wind resource and production factors in the south, a very mature and developed network of gas transport and midstreamers, as well as all the major companies already in the country. Other point to consider is Vaca Muerta, the massive unconventional basin, that has good production levels per well and the infrastructure is starting to be developed, but so far was never close to reach a full development as other unconventional basins in USA. This might play a role in terms of where the investments goes, and how the Government support with policies and tax incentives the traditional Oil and Gas business vs a decarbonization path. Still, if Vaca Muerta moves to full development phase, there is a possibility to export natural gas from Vaca Muerta through new LNG export terminals as a potential way to help other countries to replace coal by natural gas, as a transitioning fuel and reduce GHGs emissions.
Mexico and Brazil are still very focused in the Oil and Gas, and is not strange if you consider that these two countries are big Oil producers and exporters, Brazil almost all with the massive Offshore resources, Mexico with a mix of Offshore and Onshore. Recently, the Mexican Oil and Gas company PEMEX finalized the construction of Dos Bocas refinery, one of the biggest in the region and one of the most ambitious projects that PEMEX steering in the last decades. That had a reason, Mexico was importing a lot of refined fuels, and in the other hand was not able to refine some of the local crude oil due different specifications. Make sense then the construction of this refinery that kill both birds with one shot. Brazil in the other hand is reshaping the entire gas value chain, allowing open access to the existent gas transport infrastructure, creating a new legislation and allowing the gas market to deploy. This might bring some decarbonization angles in terms of HFO and Diesel replacement as well as natural gas wider utilization for cooking and heating, reducing as well the carbon emissions. Still, the decarbonization is something that is happening all around the world, and Mexico and Brazil should not be far away as these two countries are critical beacons for the Latin America region in terms of economy, energy trends, exports and investments.
There are many other actions ongoing in the region as well, we can see major Oil and Gas producers star looking after CCUS technologies to decarbonize their assets. Electric Fracking in the unconventional even if wider adopted in USA, just stared to be discussed in the region. In the other hand, we see some interest in Argentina, Chile and Colombia about eFuels and the potential future market that such renewable fuels could have in Europe, making this a potential solution for Carbon Capture circular economy. Some other companies are turning to renewable energy, by own projects or just contracting more energy from that source, in a valid way to decarbonize they operations. Offsetting is not that common, but there are companies looking to ways of offset their emissions, and companies that are pushing projects that will have the certification to allow offsetting, some of them like Wind farms are already there.
Countries like Paraguay, Bolivia, Peru and Ecuador are not in the spotlight in terms of Energy Transition right now, but sooner or latter will have their own roadmaps and plans, we are sure. The decarbonization and net zero targets are applicable everywhere to everybody, so we all should start taking care of this big tectonic movement that we call Energy Transition.