Argentina’s green hydrogen ambitions have been given a boost with the news that its renewable H2 industry is in line for a slice of a giant €10bn ($10.9bn) mega-fund from the EU, designed to build sustainable supply chains across Latin America and the Caribbean.

Hydrogen: hype, hope and the hard truths around its role in the energy transition
Will hydrogen be the skeleton key to unlock a carbon-neutral world? Subscribe to the weekly Hydrogen Insight newsletter and get the evidence-based market insight you need for this rapidly evolving global market

European Commission president Ursula von der Leyen made the announcement during a visit to Buenos Aires on Tuesday, as part of a massive charm offensive in Latin America that the bloc hopes will end in a free trade deal with Mercosur, a trading bloc comprising Argentina, Brazil, Paraguay and Uruguay.

She has already promised cash from the bloc’s Global Gateway international investment initiative — via a series of grants and loans — for critical raw materials, renewables and green hydrogen in Brazil.

“Argentina has immense potential for renewable energy — solar but also wind power for green hydrogen, for example,” she said in a speech in Buenos Aires. “You are on your way to become a regional hub for renewables, with the support of Global Gateway.

“And I think this is good news for both of us because it will accelerate your clean energy transition, it will create jobs here in Argentina. And of course, it is also of high interest for the European Union, as we need a reliable clean energy supplier.”

Clean energy can, realistically, only be shipped from Argentina to Europe in the form of green hydrogen or one of its derivatives, such as ammonia.

The EU’s Global Gateway fund aims to mobilise €300bn of European investment abroad to 2027 in strategic sectors.

The €10bn pot promised by the EU will be financed from the bloc’s coffers, and von der Leyen promised that this would be supplemented by cash from individual nation states that sign bilateral agreements with eligible countries, as well as from the private sector.

“Global Gateway creates a conducive environment for private investments from across Europe in Latina America and the Caribbean, and specifically here in Argentina,” von der Leyen added.

But it is not clear how much of the €10bn pot will be available for green H2 development, or even Argentina.

In fact, Argentina’s green hydrogen industry will have to share the cash with green hydrogen players elsewhere across Latin America and the Caribbean, as well as across other sectors such as renewables and critical raw materials including lithium.

Given that the big hydrogen projects producing the cheapest renewable H2 typically cost billions of dollars, the shared fund might be stretched thin across all the different countries and sectors.

For example, Fortescue Future Industries’ (FFI’s) proposed 15GW project in Patagonia has a price tag of €8.4bn, but that project is reportedly in jeopardy over restrictions accessing foreign currency in Argentina.

The country’s draft hydrogen legislation is going through Parliament — with a rule demanding that at least 50% of green H2 equipment is sourced from local companies, despite the fact that Argentina has no electrolyser factories.

Argentina’s neighbour Chile is reportedly set to be opening a €728m fund for green H2 projects, backed by cash from the World Bank, the EU’s lender the European Investment Bank, German state-owned international development bank KfW and the Washington DC-headquartered International Development Bank.