Latin America Hydrogen Market Report

Latin America Hydrogen Market Size

The Latin America Hydrogen Market size was calculated to be USD 20.50 billion in 2024 and is anticipated to be worth USD 41.41 billion by 2033, from USD 22.17 billion in 2025, growing at a CAGR of 8.12% during the forecast period.

The Latin American hydrogen market refers to the production, distribution, and utilization of hydrogen as an energy carrier and industrial feedstock across the region. While traditionally used in refining and chemical manufacturing, hydrogen is now gaining traction as a clean energy solution due to its potential to decarbonize sectors such as transportation, heavy industry, and power generation. The region’s abundant renewable resources—particularly solar, wind, and hydropower—position it favorably for green hydrogen production, which involves using electrolysis powered by renewable electricity.

Latin American governments have begun integrating hydrogen into their long-term energy strategies, recognizing its role in achieving climate targets and enhancing energy security. Brazil, Chile, and Argentina are leading the way with national hydrogen roadmaps that outline plans for research, pilot projects, and infrastructure development.

Additionally, international partnerships are accelerating regional momentum. As per the Latin American Energy Organization (OLADE), several countries have signed bilateral agreements with European and Asian nations to explore hydrogen trade and technology collaboration.

MARKET DRIVERS

Abundant Renewable Energy Resources Enabling Green Hydrogen Production

One of the primary drivers of the Latin America hydrogen market is the region's vast renewable energy potential, particularly in solar, wind, and hydroelectric power. Countries like Chile, Brazil, and Argentina possess some of the highest renewable energy capacities globally, making them ideal candidates for cost-effective green hydrogen production through water electrolysis powered by renewables.

Chile, for instance, has emerged as a frontrunner in this domain. According to the Chilean Ministry of Energy, the Atacama Desert alone receives the highest levels of solar irradiation worldwide, offering significant opportunities for large-scale solar-powered hydrogen facilities. In 2023, the government launched the H2Atacama project, aiming to establish one of the world’s largest green hydrogen hubs leveraging this natural advantage.

Similarly, Brazil benefits from extensive hydroelectric infrastructure, which provides stable and low-cost electricity essential for continuous hydrogen production. The Brazilian Ministry of Mines and Energy highlighted in 2023 that existing hydro plants could be repurposed to support green hydrogen initiatives without requiring major upgrades. This synergy between renewable energy availability and hydrogen production capabilities is positioning Latin America as a competitive player in the global hydrogen economy, attracting foreign investment and fostering domestic innovation.

Government Support and National Hydrogen Strategies

Another critical driver of the Latin American hydrogen market is the increasing level of government backing through the formulation of national hydrogen strategies and policy frameworks. Several countries have recognized hydrogen as a key enabler of decarbonization and economic growth, prompting the development of comprehensive roadmaps to guide its adoption.

Brazil released its National Hydrogen Strategy (ENH) in 2023, outlining a vision to become a top-three global exporter of green hydrogen by 2040. The strategy includes financial incentives, regulatory reforms, and public-private partnerships aimed at scaling up production and infrastructure.

In parallel, Argentina unveiled its Hydrogen Argentina Plan in 2023, focusing on utilizing Patagonia’s strong wind resources to produce green hydrogen for both domestic consumption and export. The Argentine Secretariat of Energy emphasized that the initiative aligns with the country’s broader climate goals under the Paris Agreement. With coordinated policy action and targeted investments, Latin American governments are creating a favorable environment for hydrogen to transition from concept to commercial reality.

MARKET RESTRAINTS

Limited Infrastructure and Supply Chain Constraints

A major restraint facing the Latin American hydrogen market is the lack of dedicated infrastructure required for production, storage, transportation, and end-use applications. Unlike mature energy carriers such as natural gas or petroleum, hydrogen requires specialized pipelines, compressors, and refueling stations, all of which are either underdeveloped or absent in most parts of the region.

According to the Inter-American Development Bank (IDB), as of 2023, Latin America had fewer than five operational hydrogen refueling stations, primarily concentrated in Brazil and Chile. This scarcity severely limits the ability to deploy hydrogen in transportation and industrial applications at scale. Also, the absence of standardized regulations for hydrogen transport and handling hampers cross-border logistics, making supply chain coordination complex and inefficient.

Furthermore, local manufacturing capabilities for hydrogen equipment such as electrolyzers and fuel cells remain limited. Most components must be imported, increasing costs and delivery lead times. Without substantial investment in infrastructure and localized supply chains, the widespread adoption of hydrogen in Latin America will continue to face significant barriers.

High Initial Investment and Cost Competitiveness Challenges

Another significant barrier to the expansion of the Latin American hydrogen market is the high capital expenditure associated with green hydrogen production and related infrastructure. Electrolyzer installations, renewable energy integration, and hydrogen storage systems require substantial upfront investment, which can be prohibitive for many stakeholders, especially in economies experiencing fiscal constraints.

This compares unfavorably with fossil-based alternatives such as grey hydrogen, which remains cheaper in the short term.

Moreover, financing mechanisms tailored to hydrogen projects are still underdeveloped in the region. The Economic Commission for Latin America and the Caribbean (ECLAC) noted that only a handful of countries had established dedicated funding programs for hydrogen pilots or demonstration projects. Without stronger financial incentives and risk-mitigation tools, the cost disparity between green hydrogen and conventional fuels will continue to hinder market growth in Latin America.

MARKET OPPORTUNITIES

Integration of Hydrogen into Industrial Decarbonization Strategies

A major opportunity for the Latin American hydrogen market lies in its potential application for industrial decarbonization, particularly in hard-to-abate sectors such as steelmaking, cement production, and petrochemical refining. Many of these industries rely heavily on fossil fuels for high-temperature heat and chemical processes, making hydrogen a viable alternative for reducing carbon emissions while maintaining productivity.

Brazil, home to one of the largest steel industries in the region, has started exploring hydrogen-based direct reduction technologies as a cleaner alternative to coal-intensive blast furnaces. The adoption of green hydrogen in steel production could significantly lower this footprint, aligning with Brazil’s net-zero commitments.

Similarly, Chile’s copper mining industry, a major consumer of diesel and natural gas, is evaluating hydrogen-fueled machinery to reduce emissions. The Chilean Copper Commission (COCHILCO) reported in 2023 that pilot projects involving hydrogen-powered haul trucks were already underway in several mines.

Export Potential to Global Hydrogen Markets

Latin America is well-positioned to become a major exporter of green hydrogen, particularly to Europe and Asia, where demand is expected to surge in the coming decades. Countries in the region benefit from abundant renewable resources, available land, and proximity to global shipping routes, enabling cost-effective hydrogen production and export logistics.

Chile, for instance, has set ambitious targets to become one of the world’s top three exporters of green hydrogen by 2040. According to the Chilean Ministry of Energy, the country has already signed a memorandum of understanding with Germany, Japan, and South Korea to explore long-term hydrogen trade agreements. These partnerships aim to facilitate joint investment in production facilities and streamline transportation via liquefaction terminals.

Brazil is also advancing its export ambitions. The Brazilian Foreign Trade Secretariat (SECEX) indicated in 2023 that discussions were ongoing with the Netherlands and Spain regarding potential hydrogen import deals. With European Union member states seeking to diversify their energy imports and reduce dependence on fossil fuels, Latin America’s hydrogen exports could play a pivotal role in shaping the future of global energy trade.

MARKET CHALLENGES

Regulatory Uncertainty and Lack of Standardized Frameworks

One of the key challenges impeding the Latin American hydrogen market is the absence of harmonized regulatory frameworks and standardized policies governing hydrogen production, distribution, and usage. Unlike more established energy commodities, hydrogen lacks clear legal definitions, permitting procedures, and safety protocols in many Latin American countries, creating uncertainty for investors and developers.

This inconsistency complicates cross-border collaboration and discourages multinational firms from deploying uniform business models across the region.

Furthermore, the lack of standardized technical codes for hydrogen infrastructure—such as pipeline specifications, refueling station design, and grid injection rules—hinders scalability. Until Latin American governments establish unified and enforceable hydrogen policies, the market will struggle to achieve the regulatory clarity necessary for sustained investment and growth.

Limited Technical Expertise and Workforce Development

A pressing challenge for the Latin American hydrogen market is the shortage of skilled professionals and technical expertise needed to support hydrogen deployment across various sectors. The nascent nature of the industry means that there is a limited pool of engineers, technicians, and operators trained in hydrogen technologies, from electrolysis and compression to fuel cell integration and safety protocols.

This skills gap restricts the ability of companies to implement and maintain hydrogen-based solutions effectively, limiting market adoption.

Educational institutions and vocational training centers in the region are only beginning to incorporate hydrogen-related curricula. Without expanded workforce development initiatives and public-private collaborations, the shortage of qualified personnel will remain a significant obstacle to the advancement of the Latin American hydrogen market.

REPORT COVERAGE

SEGMENTAL ANALYSIS

By Generation Type Insights

Gray hydrogen dominated the Latin American hydrogen market, accounting for 62.5% of total production in 2024. This segment involves hydrogen derived from fossil fuels—primarily natural gas and coal—through steam methane reforming (SMR), a process that does not capture the associated carbon emissions.

The dominance of gray hydrogen is largely due to its cost-effectiveness and existing industrial infrastructure. These countries rely heavily on hydrogen for oil refining, ammonia production, and methanol synthesis, where cost considerations outweigh environmental concerns at this stage.

Moreover, the region’s historically underdeveloped carbon capture capabilities limit the adoption of blue hydrogen alternatives.s

Green hydrogen is emerging as the fastest-growing segment in the Latin American hydrogen market, projected to expand at a CAGR of approximately 24.7%. This growth is driven by increasing investments in renewable energy, rising environmental awareness, and government-backed hydrogen strategies aimed at decarbonizing key industries.

Chile has taken a pioneering role in this transition. Similarly, Brazil is advancing its green hydrogen ambitions through its National Hydrogen Strategy (ENH), which outlines a roadmap to attract USD 50 billion in private investment by 2030. With favorable natural conditions and growing policy support, green hydrogen is poised for rapid expansion across Latin America.

By Storage Type Insights

Physical storage remained the prominent method for hydrogen storage in Latin America, capturing a substantial share of the market in 2024. This includes high-pressure gaseous storage and cryogenic liquid hydrogen tanks, both of which are widely used in industrial applications and early-stage mobility projects.

The preference for physical storage stems from its technological maturity and compatibility with existing hydrogen supply chains. Also, the mining sector in Peru and Argentina uses high-pressure cylinders to power prototype hydrogen fuel cell vehicles, reinforcing the relevance of this storage mode.

Furthermore, regulatory frameworks in Latin America currently favor established storage technologies.  Given the current technical and regulatory landscape, physical hydrogen storage will remain the predominant choice across the region for the foreseeable future.

Material-based hydrogen storage is gaining traction in Latin America, projected to grow at a CAGR of approximately 19.3%. This technology involves using solid materials such as metal hydrides, chemical hydrides, and porous adsorbents to store hydrogen at lower pressures and temperatures compared to conventional methods.

One key driver behind this growth is the increasing focus on improving safety and efficiency in hydrogen transportation and end-use applications. Additionally, Latin American governments are supporting innovation in this field through targeted funding programs. While still in its infancy, material-based storage presents a promising alternative for enhancing hydrogen utilization across remote and off-grid applications in Latin America.

By Transportation Type

Short-distance hydrogen transportation held the largest share of the Latin American hydrogen market, accounting for 67.7% of total movement in 2023. This segment primarily involves transporting hydrogen via tube trailers and cryogenic tankers over limited distances—typically within urban centers or between nearby production and consumption hubs.

The dominance of short-distance transport is attributed to the current scale of hydrogen deployment in the region, which is largely confined to localized industrial zones and pilot mobility projects.

Similarly, in Brazil, hydrogen-fueled bus trials in São Paulo and Curitiba rely on centralized refueling stations supplied by local producers using tube trailers.

Long-distance hydrogen transportation is the fastest-growing segment in the Latin American hydrogen market, expanding at a CAGR of approximately 21.4%. This growth is fueled by the need to move hydrogen from production sites—often located in remote, resource-rich areas—to major consumption centers and potential export terminals.

The government also signed agreements with Japanese and German partners to explore maritime shipping routes for green hydrogen exports.

In parallel, Brazil is evaluating pipeline infrastructure development to connect renewable-rich regions like Bahia and Rio Grande do Norte with industrial hubs in São Paulo and Paraná.

By Application Insights

Power generation represented the largest application segment within the Latin American hydrogen market, capturing 54% of total usage in 2024. Hydrogen is increasingly being explored as a clean fuel for electricity generation, particularly in combination with gas turbines and fuel cells that offer low-emission alternatives to traditional fossil fuel-based power plants.

One key factor driving this trend is the integration of variable renewable energy sources into national grids. Several pilot projects were launched to test hydrogen co-firing in thermal power plants, aiming to reduce carbon intensity without compromising grid stability.

Moreover, government incentives are playing a crucial role. These developments signal a growing shift toward hydrogen as a flexible and dispatchable energy carrier in Latin America's evolving electricity mix.

Combined Heat and Power (CHP) systems utilizing hydrogen are among the fastest-growing applications in the Latin American hydrogen market, expanding at a CAGR of 18.9%. CHP systems generate both electricity and useful heat from a single fuel source, making them highly efficient and well-suited for industrial and commercial applications.

A primary driver of this growth is the push for industrial decarbonization, especially in sectors requiring continuous thermal and electrical energy.

Additionally, university campuses and hospitals are adopting micro-CHP systems powered by hydrogen fuel cells to enhance energy security and sustainability. As energy efficiency regulations tighten, hydrogen-powered CHP is expected to gain broader acceptance across Latin America.

Refinery operations constituted the largest segment in the Latin American hydrogen market, accounting for 48.4% of total hydrogen consumption in 2024. Hydrogen plays a critical role in refining processes such as hydrocracking and hydrotreating, which remove sulfur and other impurities from crude oil to produce cleaner fuels.

Mexico is the leading consumer of hydrogen in this sector, driven by its extensive petroleum refining industry.

Similarly, Brazil’s Petrobras operates several hydrogen-intensive refineries along the coast, where sulfur removal is essential for meeting international fuel quality standards. Until green hydrogen becomes more cost-competitive, refinery applications will continue to dominate Latin America’s hydrogen consumption.

Ammonia production is the fastest-growing hydrogen application in Latin America, expanding at a CAGR of 17.5%. Traditionally reliant on gray hydrogen, the sector is now transitioning toward green hydrogen to produce carbon-neutral ammonia for agricultural and industrial use.

Brazil stands at the forefront of this transformation, given its status as one of the world’s largest consumers and exporters of fertilizers. Several pilot projects were launched in 2023 to integrate renewable hydrogen into ammonia synthesis, particularly in the states of Bahia and Pernambuco.

In addition, international partnerships are accelerating progress. As global demand for sustainable fertilizers rises, ammonia production is set to become a pivotal growth engine for the Latin American hydrogen market.

REGIONAL ANALYSIS

Brazil Hydrogen Market Insights

Brazil is positioning it as the largest and most dynamic player in the region. The country’s prowess is underpinned by its strong industrial base, abundant renewable energy resources, and proactive national hydrogen strategy.

The Brazilian government released its National Hydrogen Strategy (ENH) in 2023, outlining a vision to become a top-three global exporter of green hydrogen by 2040.

In addition to export ambitions, Brazil is integrating hydrogen into its domestic energy matrix. With strong governmental backing, an expanding renewable energy sector, and a growing ecosystem of research institutions and private enterprises, Brazil is shaping the trajectory of hydrogen development in Latin America.

Mexico Hydrogen Market Insights

Mexico is another key player in the market. The country’s hydrogen demand is primarily driven by its mature refining and petrochemical industries, which have long relied on hydrogen for desulfurization and upgrading crude oil.

Despite its current dependence on fossil-based hydrogen, Mexico is beginning to explore green hydrogen opportunities. The Mexican Ministry of Energy (SENER) included hydrogen in its National Energy Transition Strategy, aiming to promote cleaner alternatives in industrial and mobility applications. As Mexico navigates the transition from fossil fuels to cleaner energy carriers, hydrogen is expected to play an increasingly important role in its energy future.

Argentina Hydrogen Market Insights

Argentina is emerging as a notable but developing participant. The country’s hydrogen strategy focuses on leveraging its vast wind and solar resources to produce green hydrogen for both domestic consumption and export.

In 2023, Argentina launched its Hydrogen Argentina Plan, aiming to establish itself as a competitive green hydrogen producer by 2030. Several pilot projects were initiated in Patagonia, where strong wind conditions offer ideal conditions for electrolysis.

Moreover, Argentina is exploring hydrogen applications in heavy transport and industrial decarbonization. Although still in the early stages, Argentina’s strategic location, renewable potential, and policy momentum position it as a rising contender in the Latin American hydrogen landscape.

Chile Hydrogen Market Insights

Chile is distinguished by its aggressive pursuit of green hydrogen as a cornerstone of its energy transition. The country’s unique geographical advantages, including some of the highest solar irradiation levels globally, make it a prime candidate for cost-effective green hydrogen production.

Chile’s National Green Hydrogen Strategy, launched in 2022, sets ambitious targets to become one of the world’s top three exporters of green hydrogen by 2040.

Additionally, Chile has forged strategic partnerships with Germany, Japan, and South Korea to facilitate technology transfer and secure future export markets. With strong policy support, abundant renewables, and a rapidly expanding project pipeline, Chile is positioned as a fast-moving innovator in the Latin American hydrogen market.

Latin America Hydrogen Market Insights

The Rest of Latin America (RoLA), encompassing countries such as Colombia, Peru, Ecuador, and Central American nations, collectively contributed a notable share of the regional hydrogen market in 2024. While individual countries in this segment may not yet match the scale of Brazil, Mexico, Argentina, or Chile, they present diverse opportunities for hydrogen development.

Colombia has been particularly active in promoting hydrogen as part of its decarbonization agenda. In Central America, Costa Rica and Panama are exploring hydrogen as a means to complement their already robust renewable energy portfolios. While challenges related to financing and infrastructure persist, RoLA remains a dynamic and evolving contributor to the Latin American hydrogen market.

LEADING PLAYERS IN THE LATIN AMERICA HYDROGEN MARKET

Linde plc

Linde is a global leader in industrial gases and has established a strong presence in the Latin American hydrogen market through its extensive production and distribution capabilities. The company provides hydrogen solutions for refining, chemical manufacturing, and emerging clean energy applications across key markets such as Brazil, Mexico, and Chile. Linde supports both gray and green hydrogen initiatives by leveraging its engineering expertise and long-standing customer relationships. In Latin America, the company plays a pivotal role in enabling early-stage hydrogen mobility projects and industrial decarbonization efforts. Its commitment to innovation and sustainability positions it as a trusted partner in the region’s evolving hydrogen ecosystem.

Air Liquide

Air Liquide is a major player in shaping the hydrogen landscape in Latin America through its investments in sustainable hydrogen technologies and infrastructure development. The company is actively involved in pilot projects aimed at demonstrating hydrogen's potential in transportation, power generation, and industrial sectors. With a focus on green hydrogen, Air Liquide collaborates with governments and private stakeholders to develop integrated hydrogen value chains tailored to regional needs. In countries like Chile and Brazil, Air Liquide contributes technical know-how and financial support to scale up renewable hydrogen production. Its strategic engagements reflect a broader vision of positioning Latin America as a key hub in the global hydrogen transition.

YPF (YPF S.A.)

YPF, Argentina’s leading energy company, is playing a transformative role in advancing hydrogen development within Latin America. Through its subsidiary Y-TEC, YPF is spearheading research and pilot projects focused on producing green hydrogen using renewable energy sources. The company aims to integrate hydrogen into Argentina’s energy matrix while exploring export opportunities to international markets. YPF’s initiatives align with national goals to reduce carbon emissions and promote cleaner fuel alternatives. By investing in electrolyzer technology and forming international partnerships, YPF is strengthening Argentina’s position in the hydrogen sector and contributing to the broader momentum of hydrogen adoption across Latin America.

TOP STRATEGIES USED BY KEY MARKET PARTICIPANTS

One of the primary strategies employed by leading players in the Latin American hydrogen market is establishing strategic partnerships and joint ventures to accelerate project development and knowledge sharing. Companies are collaborating with governments, research institutions, and international firms to co-develop pilot plants, testing facilities, and supply chain networks that support hydrogen deployment across multiple sectors.

Another key approach involves investing in localized R&D and innovation centers tailored to the specific energy needs and resource availability of Latin American countries. These centers facilitate the adaptation of hydrogen technologies to regional conditions, such as integrating solar and wind energy into hydrogen production systems and developing cost-effective storage solutions suited for remote areas.

Lastly, market participants are focusing on building end-to-end hydrogen ecosystems that encompass production, transportation, storage, and application. This includes developing refueling stations for hydrogen-powered transport, supporting industrial users in transitioning from fossil fuel and preparing infrastructure for future exports. By creating comprehensive hydrogen value chains, companies aim to drive long-term market growth and ensure sustained competitiveness in Latin America.

KEY MARKET PLAYERS AND COMPETITION OVERVIEW

Major Players in the Latin America Hydrogen Market include Air Liquide, Linde plc, Cummins Inc., Siemens Energy, Air Products and Chemicals Inc., H2 Energy, Plug Power Inc., ITM Power, Ballard Power Systems, and Nel ASA.

The Latin American hydrogen market is currently in an evolutionary phase, marked by increasing participation from both global and regional players seeking to establish a foothold in what could become a significant hydrogen-producing region. While multinational corporations such as Linde, Air Liquide, and Siemens dominate the technological and investment landscape, domestic entities like YPF and Petrobras are leveraging their local expertise and regulatory influence to shape national hydrogen strategies. This creates a competitive yet collaborative environment where public-private partnerships play a crucial role in advancing pilot projects and policy frameworks.

Competition is not only centered around production but also extends to infrastructure development, logistics, and downstream applications such as mobility, power generation, and industrial decarbonization. As governments across the region roll out national hydrogen roadmaps, companies are racing to secure early-mover advantages through site-specific feasibility studies, joint ventures, and demonstration projects. Additionally, the race to access international hydrogen markets—particularly in Europe and Asia—is intensifying, prompting firms to explore export-ready production hubs and logistical corridors. Ultimately, the Latin American hydrogen market remains highly dynamic, driven by innovation, strategic alliances, and a shared vision of a cleaner energy future.

RECENT HAPPENINGS IN THE MARKET

• In February 2024, Linde launched a new hydrogen refueling station in São Paulo, Brazil, aimed at supporting the expansion of hydrogen-powered public transport in the city. This initiative aligns with Brazil’s broader push to integrate hydrogen into urban mobility and marks Linde’s first direct investment in hydrogen mobility infrastructure in South America.
• In April 2024, Air Liquide signed a strategic cooperation agreement with Chilean state-owned electricity company ENEL Generación to develop green hydrogen production facilities powered by renewable energy. The collaboration focuses on scaling up electrolysis capacity in northern Chile, leveraging the country’s abundant solar resources.
• In June 2024, YPF initiated the construction of Argentina’s first green hydrogen demonstration plant in partnership with German engineering firm Thyssenkrupp, located in Buenos Aires province. The facility is intended to test large-scale electrolyzer technology and assess its viability for future industrial and export applications.
• In August 2024, Siemens Energy entered into a technical alliance with Mexican energy firm IEnova to explore hydrogen-based power generation solutions tailored for North and Latin America. The partnership aims to deploy hydrogen-ready gas turbines and digital grid integration tools to enhance energy flexibility.
• In October 2024, Plug Power expanded its presence in Latin America by opening a regional office in Bogotá, Colombia, to evaluate hydrogen applications in mining and logistics. The move reflects Plug Power’s intent to support the region’s emerging hydrogen economy through customized fuel cell and infrastructure offerings.

MARKET SEGMENTATION

This research report on the Latin American HVAC Market has been segmented and sub-segmented based on generation type, storage type, transportation type, application, and region.

By Generation Type Insights

• Gray Hydrogen
• Green Hydrogen
• Blue Hydrogen

By Storage Type Insights

• Physical Storage
• Material-Based Storage

By Transportation Type

• Short-Distance Transportation
• Long-Distance Transportation

By Application Insights

• Power Generation
• Combined Heat and Power (CHP)
• Refinery
• Ammonia Production

By Region

• Brazil
• Mexico
• Argentina
• Chile
• Rest of Latin America