Panama approves its National Green Hydrogen Strategy: 500 thousand t by 2030 and 5% bunkering

Panama's cabinet approved in July 2023 the National Green Hydrogen and Derivatives Strategy (ENHIVE), whose aim is to produce 500 thousand tonnes of green hydrogen and its derivatives by 2030 and to cover 5% of ship bunkering with hydrogen-based fuels. Together with the strategy, the Inter-institutional Committee for Green Hydrogen and Derivatives (CIHIVE) was set up.

Consultation and approval

According to La Prensa of 29 April 2023, Energy Secretary Jorge Rivera Staff presented a draft strategy, which was put to public consultation until 28 May; the government expected approval in June or July. Together with the strategy, three preliminary projects worth USD 712.6 million were presented (two installations and the supply of hydrogen-based transport fuel). Energías Renovables confirmed that the cabinet approved the strategy in July 2023.

Why shipping

Panama is an important maritime hub thanks to the Panama Canal and the largest ship registry in the region. The strategy is meant to help introduce hydrogen derivatives – e.g. ammonia or methanol – into marine and aviation fuels. The 5% bunkering target refers to this segment of the market.

The outlook to 2040

According to Energías Renovables (14 July 2023), the Energy Secretariat assumes production of 500 thousand tonnes of green hydrogen and its derivatives in 2030 and 5% of the marine bunkering offer in Panama from these fuels; ten years later the target is 2 million tonnes and 30% bunkering, and by 2050 40% bunkering and 30% in aviation. The quantitative targets are political in nature, and their delivery depends on private investment, renewable energy costs and external demand.

Biogas and bioenergy

The strategy concerns mainly hydrogen from electrolysis, but shipping fuels built on hydrogen derivatives compete for the same market with biomethane and bioLNG. For biogas producers in the region it is a signal that various decarbonisation pathways will coexist in marine shipping.

What this means for Poland and Europe

The European Union is working on the FuelEU Maritime regulation, which is to reduce the emission intensity of fuels in shipping calling at its ports, including Polish ones. Countries such as Panama, which have ambitions in bunkering alternative fuels, may become partners or competitors for European ports. It is a context worth following when planning bioLNG and e-fuel supply chains.