Pemex and CFE may collaborate on green hydrogen project

Mexico’s state-owned Federal Electricity Commission (CFE) is considering a partnership with state oil company Pemex to develop a green hydrogen project, a CFE official said.

Iris Cureño, head of CFE’s priority projects department, told Bloomberg Línea that the state-owned energy company sees Pemex as a “commercial partner” with which it could create various “synergies” in green hydrogen, given that the state-owned oil company is the largest user of hydrogen in Mexico.

“It could be a synergy where CFE produces hydrogen (for Pemex) or simply renewable energy for its processes,” she said.

“The most important thing is that (green hydrogen) is used where it is produced,” Cureño said.

Green hydrogen is hydrogen produced by the electrolysis of water using renewable energy.

Cureño told Bloomberg Línea that the best place to develop the green hydrogen project would be the Pemex refinery in Salina Cruz, a port city on the Pacific coast of Oaxaca state.

She noted that Pemex, in its 2023 Sustainability Plan, outlined a long-term business opportunity to produce green hydrogen for both domestic use and export. The plan mentioned the possibility of a green hydrogen joint venture with CFE.

Oil refineries use hydrogen to produce fuel with less sulfur, which helps reduce pollution. Most refineries use natural gas to produce hydrogen, which is colorless, odorless, nontoxic and highly flammable.

While the common hydrogen production process produces carbon dioxide emissions, green hydrogen production produces no emissions at all.

Pemex’s incoming CEO, Víctor Rodríguez Padilla, said late last month that the state-owned oil company would play a “fundamental role” in the development of renewable energy sources, declaring that it “will not limit itself to producing oil and gas condensate as it has always done.”

But any efforts to produce green hydrogen “face numerous challenges,” Bloomberg Línea reports. The first is the lack of specific regulations in Mexico, the news outlet reports.

The Energy Ministry issued guidelines for green hydrogen this year, but Cureño said a regulatory framework is still needed to govern the production, domestic commercialization and export of the gas.

The CFE representative also said that the costs associated with producing green hydrogen are currently “very high.”

She added that the state-owned energy company is working with Mexican scientists to develop Mexican technology to produce green hydrogen, which would avoid the need to use expensive imported equipment.

Luca Ferrari, a geologist at the National Autonomous University, told Bloomberg Línea that the obstacles to the success of green hydrogen are low energy efficiency, high production costs and the corrosive properties of the gas.

Newly elected President Claudia Sheinbaum has pledged to develop more renewable energy sources in Mexico, one of the few differences between her and President Andrés Manuel López Obrador, who has advocated continued use of fossil fuels.

Sheinbaum, who will take office on October 1, has pledged to invest more than $13 billion in an energy plan focused on renewable energy.

If the idea of ​​​​producing green hydrogen at Pemex’s Salina Cruz refinery is realized, it could contribute to the development of the Isthmus of Tehuantepec as a center for green hydrogen.

Lopez Obrador he said at the end of last year that a Danish fund will invest $10 billion in a green hydrogen plant in Ixtepec, located inland from Salina Cruz on the isthmus between Oaxaca’s Pacific coast and the Gulf coast of Veracruz.

Based on Bloomberg Linea reports