Interview of Demetrios Papathanasiou, Global Director Energy and Extractives, with El Tiempo, Colombia

Demetrios Papathanasiou, Global Director for the World Bank's Energy and Extractives Global Practice, spoke about the green hydrogen industry.

Published by El Tiempo (Original in Spanish)

Juan Andrés Beltrán Tellez

Green hydrogen has emerged as an alternative for decarbonizing energy sources. Its potential to reduce emissions in transportation and the heavy industry sector (cement, steel, and chemicals) has made it an attractive technological development for the future. However, it faces challenges related to financing and infrastructure, especially in emerging economies.

One of the actors interested in this development is the World Bank, which has sought to carry out projects for the growth of this industry with the goal of achieving net-zero emissions by 2050. Demetrios Papathanasiou, the World Bank's Global Director for Energy and Extractive Industries, was in Bogotá for the Partners and Stakeholders Forum of the Hydrogen Development Association (H4D) and the third International Hydrogen Congress. He spoke with EL TIEMPO about the prospects of this industry.

Why was this event held in Colombia?
There are several reasons. On one hand, the country has a series of entities working on the development of the sector, including the Hydrogen Colombia Association, which has been one of our allies in the World Bank initiative. Additionally, there is a significant potential for green hydrogen that could be significant in the international market.

What are the objectives?
The first objective is to raise awareness about this new option emerging in the international energy market. The second objective is to find ways to accelerate development and attract investments in a sector that, with its implementation, involves displacing other forms of fossil fuels with established infrastructure and technologies. The way to do this is by generating coordination among actors, and that is what the event seeks.

What are the benefits of switching from fossil fuels to green hydrogen?
Colombia's coal and oil exports represent a significant part of the country's economy. Clearly, this is one of the country's strengths, but it is an economic activity that will not be sustainable with the global goal of net-zero emissions by 2050. Many of Colombia's markets are on the other side of the Atlantic, and we see that, in that region, especially in Europe, there is a clear commitment to advancing this goal. The challenge and opportunity for Colombia lie in finding a way to remain relevant in energy production while the world changes its energy model. Colombia, due to its natural characteristics, has an advantage in this regard and is a sector in which it has already made progress.

What is the size of this market?
Looking at global scenarios, it is clear that it is impossible to achieve the goal of net-zero emissions without considering a component of green hydrogen. That said, this is a market in its initial stage and is relatively limited; but it will grow as production costs decrease to become competitive with the costs of non-renewable products it aims to replace.

To achieve this, the key is to aggressively reduce the price of electricity used to produce hydrogen. Between 66 percent and 75 percent of the costs of clean hydrogen are generated by electricity. This will take time, but the global trend and the potential of the sector are elements that contribute to development, especially with the support of large economies like the U.S., Europe, or Japan, which generate transition incentives.

Beyond these large economies, which regions in Latin America have made progress in green hydrogen?
We approved the first green hydrogen project in Chile a year ago; we are also working intensively in Brazil and are already in communication with the Colombian government to develop technical assistance for a project that we hope will become more concrete in the future. These are the three priorities in the region. The dialogue is similar with these countries, although the motivations are different.

In addition to financing, what are the main challenges for implementing this technology?
While we achieve an energy transition, one of the challenges is identifying areas where there is a market for hydrogen and then creating the conditions to help protect green hydrogen. Countries with refineries, given their need for hydrogen, can be ideal for developing the sector. Then, it is important to secure financing concessions to position the market in the coming months.