Uruguay Hydrogen Energy and Transportation

The Uruguayan government is working to position itself as a leader in clean hydrogen and e-fuels production and has realized several early successes to attract investments. Uruguay’s abundant renewable energy resources, water, and biogenic carbon dioxide needed to produce clean hydrogen and related derivates make it a potentially attractive destination for investment.

The country has developed a national hydrogen strategy, which aims to position it as a leader in the green hydrogen economy.  The strategy focuses on creating a regulatory framework, attracting investment, and fostering innovation in hydrogen technologies.  In 2022, the Uruguayan government published the Green Hydrogen Roadmap outlining how they intend to become a major player in the industry as a part of the second energy transition strategy.  The national strategy aims to develop the hydrogen ecosystem mainly to export green hydrogen to international markets, such as Europe and Asia. This initiative will support these regions in meeting ambitious climate goals and decarbonizing their transportation sectors and heavy industries.

Several local pilot projects and partnerships are underway to explore and demonstrate the feasibility of green hydrogen production and use in Uruguay.  These projects often involve collaboration between private companies, international organizations, and the government. These pilot projects are part of a longer-term hydrogen strategy, to test new technologies and policies, which aims to create billions in demand for new projects, including those already in the initial project planning phase. Technologies that are part of these tests may be well-positioned in the longer term as Uruguay plans to become a regional leader in the green hydrogen field. With Uruguay’s abundant wind and solar resources, producing green hydrogen through electrolysis can be both cost-effective and sustainable.  
Uruguay expects a large investment a carbon-neutral fuels production company, potentially marking the largest investment in Uruguayan history. The scale of the project would be unprecedented in Uruguay, requiring a significant increase in solar and wind electricity generation. Additionally, it will require significant investments in electrolysis, CO2 capture capacity, transport and storage capacity.

The Government of Uruguay has been very open to collaboration with industry to execute projects, including through incentives, such as subsidies, grants, and tax benefits.  

If you would like more information, please contact the U.S. Commercial Service in Uruguay at Office.Montevideo@trade.gov