Uruguay Window: potential for renewable hydrogen development

Uruguay has one of the most renewable electricity mixes in Latin America. In recent years, more than 90% of its electricity has come from renewable sources, mainly wind, hydro, solar and biomass, reaching close to 97% in favourable years. Having completed this first stage of its energy transformation, the country now faces a second transition: decarbonising heavy transport, industry and raw materials, and developing a renewable hydrogen and derivatives economy for local use and export.

This experience, together with favourable wind and solar conditions and stable institutions, positions Uruguay as a reliable partner for Germany and the European Union in the next stage of the energy transition.

Why Uruguay?

• Abundant renewable resources. An estimated technical potential of around 275 GW in solar PV and onshore wind, with excellent capacity factors at the best sites.
• Biogenic CO₂ availability. Carbon sources of biological origin enable the production of derivatives such as e-methanol and e-fuels with a lower carbon footprint.
• Institutional and democratic stability. High scores in international democracy and transparency indices, and continuity in long-term energy policy.
• Favourable investment climate. Legal certainty and an investment promotion regime that already includes renewable hydrogen among its tax benefits.
• Public policy and governance. A national strategy to 2040 and an inter-institutional framework (H2U Programme) that organises innovation, regulation, investment attraction and infrastructure.

German cooperation, through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), supports this process with the backing of the German Federal Ministry for Economic Affairs and Energy (BMWE) and, in certain lines of work, in cooperation with the European Union.

The goal is shared: to build an enabling regulatory, technical and social environment so that Uruguayan renewable hydrogen can reach European markets while meeting the required sustainability standards.

H2Uppp

The International Hydrogen Ramp-Up Program (H2Uppp) of the German Federal Ministry for Economic Affairs and Energy (BMWE), implemented by GIZ in collaboration with the German-Uruguayan Chamber of Commerce and Industry (AHK Uruguay), supports the early development of renewable hydrogen and Power-to-X (PtX) projects in Uruguay through three lines of action:

• Networking and project scouting
• Public-private partnerships (PPP) with German or European companies
• Knowledge and capacity development

Public-private partnership with Enertrag SE in Uruguay

Under the PPP component, H2Uppp accompanies the development of the Tambor Green Hydrogen Hub, promoted by the German company Enertrag SE together with the Uruguayan developer SEG Ingeniería. Located in Tacuarembó, the project plans to produce e-methanol from renewable hydrogen and CO₂, combining wind and solar generation with electrolysis. In its first phase, it estimates producing 16,200 tonnes of renewable hydrogen per year from 140 MW of electrolysis capacity and 350 MW of renewable generation.

Global Gateway Green Hydrogen Project in Uruguay

This action is implemented under the International Hydrogen Ramp-Up Program (H2Uppp) of the German Federal Ministry for Economic Affairs and Energy (BMWE) and co-funded by the European Union through the EUROCLIMA programme. It complements an action implemented by the Spanish Agency for International Development Cooperation (AECID) and is part of the Team Europe Initiative on Green Hydrogen in Latin America and the Caribbean, the EU’s Global Gateway strategy, the REPowerEU plan and Germany’s National Hydrogen Strategy, in close alignment with Uruguay’s green hydrogen strategy.

The action aims to contribute to carbon neutrality by 2050 in Uruguay and the European Union by promoting a sustainable renewable hydrogen economy. Specifically, it seeks to establish an enabling environment for green hydrogen and Power-to-X technologies, for domestic use and export, strengthening alliances with the productive sector and deepening trade relations between Uruguay and the European Union.

• Regulatory development. Strengthening the regulatory framework for renewable hydrogen and its derivatives, including risk management and alignment with EU standards and guidelines.
• Infrastructure and value chains. Supporting enabling infrastructure, value chains, business models and project opportunities to facilitate investment at local and export scale.
• Social impact and local development. Assessing potential social impacts and designing measures to promote an inclusive energy transition and strengthen local value creation.

Studies and resources

• Stakeholder map of the renewable hydrogen sector (Spanish)
• Guide for project developers (Spanish)
• Opportunity for fertiliser production from renewable hydrogen in Uruguay (Spanish)
• Social sustainability in renewable hydrogen production in Uruguay (Spanish)

Disclaimer

The International Hydrogen Ramp-Up Program (H2Uppp) supports business engagement in the hydrogen ramp-up in the Global South. It is a funding programme of the German Federal Ministry for Economic Affairs and Energy (BMWE), carried out by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

In partnership with the European Union and the German Federal Ministry for Economic Affairs and Energy, the “Global Gateway Green Hydrogen Project in Uruguay” initiative advances Uruguay’s Green Hydrogen Strategy by strengthening the regulatory framework, infrastructure planning, investment mobilisation and project de-risking, contributing directly to the goals of H2Uppp and the EU’s Global Gateway strategy for Latin America.

Contact

• Javier Ortiz de Zúñiga, Director, Chile Multi-Country Energy Portfolio: francisco.ortiz@giz.de
• Isabella Boese Cortés, Uruguay Country Window Coordinator, H2Uppp: isabella.boese@giz.de