Mexico plans to build a green hydrogen plant in Oaxaca state.
AMLO’s plans for a green hydrogen (H2) plant in Oaxaca state marks a favorable step forward for Mexico’s renewable energy landscape.

On 16 August, Mexico’s President Andres Manuel Lopez Obrador (AMLO) revealed plans for the Copenhagen Infrastructure Partners investment fund to construct a green hydrogen (H2) plant in Oaxaca state. The project will supply fuel for ships at the Tehuantepec Isthmus rail line — a flagship AMLO project that bridges the Gulf and Pacific coasts for Mexico. 

We believe this announcement marks a favorable step forward for Mexico’s renewable energy landscape — albeit with green hydrogen adoption still in its early phases.

Mexico Needs H2 Regulation, National Strategy

A major stumbling block for the country to go big on H2 is the lack of established technical regulations governing production and utilization. What’s more, Mexico is also still brainstorming a national H2 strategy, which some fellow Latin American countries — Chile, Colombia, Costa Rica & Peru — have already formulated.

This disparity also extends to trade partners such as Canada and especially the US (the Inflation Reduction Act’s subsidies and incentives include green hydrogen). At the last Three Amigos Summit in January, the three governments committed to establishing a clean hydrogen market across North America. 

US pressure offers a compelling impetus to expedite progress on H2.

H2 + Natural Gas Combo Plans

There are some encouraging signs for developing H2 in Mexico. The 2020 establishment of the Mexican Hydrogen Association, led by Israel Hurtado, was a pivotal step. 

Mexican universities and research centers have researched H2 technology since the 1990s, building a solid foundation of technical expertise. And both Pemex and the Federal Electricity Commission (CFE) have replaced gray hydrogen with green hydrogen in their business plans. 

The Energy Ministry and CFE have integrated use within the National Electricity Development Program, deploying H2 in combined cycle plants in tandem with natural gas. Their ambitious target is 30% green hydrogen and 70% natural gas by 2036. 

We also understand that the Economy Ministry is working with the UN to craft a document that champions green hydrogen, slated for release this year.

AMLO Goes Green

AMLO’s new stance toward renewables is a big deal. From scaring away green-energy investors by restricting private involvement in electricity generation during the first half of his term in office, the president has changed his tune — partly due to US pressure.

This U-turn has culminated in a new strategy emphasizing the renovation of CFE’s hydro facilities, establishing a 1GW solar plant in the North and integrating clean energy into the southern industrialization agenda.

AMLO is firmly committed to his legacy, including the development of the South. The forthcoming H2 plant in Oaxaca aligns with this goal.

H2 on the 2024 Campaign Trail

We anticipate that the energy transition will be pivotal in next year’s presidential election campaign — particularly if Claudia Sheinbaum and Xochitl Galvez are the candidates. Galvez, a big fan of clean hydrogen, recently proposed the creation of a specialized Mexican Energy Agency, separate from Pemex.

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