Panama

Green Hydrogen Vision

Panama envisions green hydrogen as a cornerstone of its transition to a sustainable and diversified energy future, leveraging its strategic geographic location and renewable energy potential. The country aims to integrate green hydrogen into its energy systems, particularly for decarbonizing transportation, shipping, and industrial sectors. As a global logistics hub, Panama seeks to establish itself as a regional leader in green hydrogen production, storage, and export, while fostering innovation, creating economic opportunities, and contributing to global efforts to combat climate change.

National Strategy

Panama's 2023 green hydrogen strategy (ENHIVE) seeks to position the country as a global hub for green hydrogen (H2V) and its derivatives by capitalizing on its geographic location, renewable energy potential, and logistical infrastructure. The strategy aligns with Panama's commitments under the Paris Agreement and Sustainable Development Goals, particularly SDG 7, focusing on affordable and clean energy.

Capacity Targets

Production Goals:

500,000 tons of green hydrogen by 2030.

2 million tons by 2040.

4 million tons by 2050 under optimal conditions.

Infrastructure Needs:

Development of 4.2 GW of electrolysis capacity by 2040 to meet projected demand.

Impact Targets

Transition sectors such as heavy transport, maritime, and aviation to green hydrogen.

Reduce greenhouse gas emissions in alignment with Panama's carbon neutrality goals.

Boost economic growth by creating jobs and fostering innovation within the green hydrogen value chain.

Policy and Project Spotlight

Panama has advanced green hydrogen regulation with backing from the European Union. The Green Hydrogen Regulatory Proposals document aims to establish the regulatory framework necessary for developing the country's production and market for this renewable energy source. This proposal has been crafted by Panama's National Energy Secretariat (SNE), with support from the European Union via the Euroclima Program. The proposal outlines regulatory measures designed to facilitate the swift implementation of Law 54—Legislation promoting and enabling green hydrogen as a fuel and energy vector in the Republic of Panama—once it receives approval from the National Assembly, where it is currently under discussion.
To promote sustainable and equitable growth for over four million Panamanians, the Central American Bank for Economic Integration (CABEI) has approved $240 million in financing through a Development Policy Operation (DPO). This funding aims to support the ongoing public policy efforts established by the Government of the Republic of Panama in facilitating a fair energy transition amid climate change, which is crucial for decarbonising the country's economy in alignment with the Paris Agreement. The operation emphasises implementing national and overarching strategies outlined in the 2020-2030 Energy Transition Agenda. The policy measures encouraged by this initiative aim to boost gross capital formation within the national economy by advancing electromobility, distributed generation, green hydrogen projects, and related initiatives while innovating the national interconnected system and promoting the rational and efficient use of electricity.

Financing

International Support: The Inter-American Development Bank (IDB) provided significant technical assistance and funding for foundational studies and strategic formulation.

Private Sector Engagement: The strategy encourages partnerships with private industries and financial institutions to attract investments.

Innovative Financing Mechanisms: Panama plans to use its financial hub to develop funding tools for Power-to-X infrastructure projects and support innovative startups.

Public-Private Collaboration: Emphasis on mobilizing resources for building the necessary infrastructure, research, and training programs to implement H2V projects effectively.

Government Green Hydrogen Lead

National Secretariat of Energy (SNE)