Uruguay: EU Energy Commissioner Simson discusses clean energy and hydrogen

Ladies and Gentlemen,

Good morning, everybody.

I’m delighted to be here for my first visit to beautiful Uruguay and to attend this event.

First, let me thank the Minister of Industry, Energy and Mines, Ms Elisa Facio, for welcoming me here. It will be a pleasure to discuss with you later today how to further implement our Memorandum of Understanding on energy and how to take forward our cooperation.

And many thanks as well to Mr Nicolas Albertoni, Acting Minister of External Relations, for your opening remarks and for joining this important Forum. I also looking forward to discussing with you how to align our multilateral agenda for a global energy transition.

Just yesterday, I visited the Minas windfarm two hours’ drive from here.

It gave me a real sense of how fast the green transition is taking hold in Uruguay.

It’s also a great example of Uruguay’s impressive efforts to position itself as a renewable energy hub in the region.

There is so much potential for Uruguay to become a future supplier of renewable hydrogen and other sustainable fuels to the EU market.

Today I want to talk more about this potential. I’ll discuss:

• Europe’s energy situation and our green hydrogen agenda;
• Why we’re keen to build strong energy relations with partners like Uruguay;
• And how we’ll continue to support Uruguay as it positions itself as a leading green hydrogen producer.

Ladies and Gentlemen,

As you know, the Russian war on Ukraine was a major turning point for EU energy policy.

Even before the invasion, it became alarmingly clear just how vulnerable the European energy system was.

Over decades, we had built a huge dependence on imports of Russian gas and fossil fuels.

So when the Kremlin began weaponising gas supplies, even blackmailing some Member States, Europe was hit with one of the most severe energy crises it had ever faced.

However, thanks to European unity and solidarity, we managed to turn this crisis into an opportunity. An opportunity to accelerate the clean energy transition and strengthen our energy security.

Under the REPower EU Strategy, we put in place a plan to diversify our energy sources, accelerate the transition to clean energy and save energy.

Over two years on, results are clear.

There has been a remarkable 18% reduction in gas consumption and a drastic drop in Russian natural gas imports from 45% to 18% of total EU energy imports.

One key aim of REPowerEU is to accelerate the deployment of green gases to replace the use of Russian natural gas, and of course reduce our carbon footprint at the same time.

Green hydrogen is a technology with enormous potential to decarbonise key polluting sectors.

Since 2020, I have spearheaded many initiatives to scale up this market: from infrastructure to auctions.

We have adapted our regulations so as to provide certainty to investors and project developers.

We also launched the European Hydrogen Bank to generate investment certainty and open up new business opportunities for global and European hydrogen production.

We have set mandatory targets for certain sectors, which will drive demand.

This comes on top of certification schemes for renewable hydrogen. Because it’s critical to be able to prove that the hydrogen in question is clean, produced from renewable energies.

More broadly, we want to build a renewable hydrogen economy that stimulates growth and creates jobs.

Investments will go into sectors like manufacturing, installation, and maintenance of hydrogen production facilities and installation of electrolysers.

Ladies and Gentlemen,

The recent energy crisis taught us a clear lesson: fossil fuels import dependence makes an energy system vulnerable and more exposed to price volatility due to price shocks. Europe spent EUR 390 billion in oil and gas imports in 2023.

The EU is now set to become more energy autonomous, increasing the share of home-grown clean energy sources, from renewables to other forms of decarbonised power production.

But there is a notable exception to this trend: renewable fuels.

Many European countries already estimate that they will need more hydrogen or e-fuels than they can produce.

Europe has a strategic interest in developing a global trade in hydrogen and renewable fuels.

Imported hydrogen and e-fuels at accessible prices will help Europe’s competitiveness and European industry to achieve their decarbonisation targets, in particular in transport and steel production.

This creates great complementarity with partner countries with strong renewables potential and interested in creating trade corridors, like Uruguay.

Europe is one of the world’s largest energy importers.

So we want to leverage this to support our partners around the world in their economic and green transitions, to become producers of clean energy and sustainable fuels.

Latin America, and particularly Uruguay, is a strategic ally and a key partner in this effort.

Uruguay stands poised to become a leading green producer of hydrogen and its derivatives, such as e-fuels, e-methane and ammonia.

It has many of the attributes including quality, abundant and complementary wind and solar energy, advanced electricity infrastructure and a good supply of fresh water, among others.

It also has a sound legal system and a stable political environment.

The recent opening of a government call to develop hydrogen projects through a USD 10 million fund that supports projects up to 10 years in construction, production, and different applications of green hydrogen like heavy-duty transport, e-methanol, e-kerosene, green fertilisers is an important step.

We also look with interest at planned and ongoing projects for producing e-gasoline and e-methane from CO2 generated from industrial processes, like sugar processing, using renewable electricity.

Uruguay is set to deliver hydrogen production which combines low cost green electricity, easy access to sourcing of feedstock like biogenic CO2 and water as well as proximity to transport infrastructure, like railways and ports.

There are ideal conditions for a competitive production, for domestic use and for export to Europe or the rest of the world.

Right now, the EU is the largest investor in this country, with 41% of total Foreign Direct Investment – with an even higher proportion in the energy sector.

Now we’re keen to take this even further.

We have started working towards that end.

In July last year, I signed a Memorandum of Understanding on “renewable energy, energy efficiency and renewable hydrogen” with Uruguay’s Foreign Minister.

This lays the foundations for our future energy cooperation.

And last August, Uruguay was approved for the bilateral Framework Agreement with the European Investment Bank.

This is a milestone as it will allow the EIB to finance public and private energy projects in Uruguay, with a particular focus on green hydrogen.

It follows on from a similar agreement between the EIB and Chile, which has allowed Chile to develop its renewable hydrogen plans.

Both these agreements are part of the EU’s Global Gateway investment agenda, which will mobilise EUR 300 billion of investment in the world for high quality and sustainable projects.

The Memorandum is already bearing fruit. The high-level dialogue between our authorities has intensified and we are advancing in developing our cooperation projects.

In fact, in a short while, we’ll be announcing EUR 2 million in EU funding to implement the Uruguayan Green Hydrogen Roadmap – one of Uruguay’s top energy priorities.

Dear friends,

Uruguay is well on the way to becoming a leader in renewable energy.

It is already attracting investments that will ensure lasting benefits for its citizens.

Numerous projects with European capital are in the planning phase.

The EU will do all it can to support you as you consolidate your position as a leading exporter of renewable energy.

In a world marked by ever greater geopolitical instability, it is more important than ever to work together to create a sustainable economic environment that’s better for people and planet.

The EU seeks partners in reliable countries like Uruguay – partners who share the same values as us, the same trust in democracy, rule of law and multilateralism.

Today’s Investment Forum is a prime example of how we can take our cooperation forward.

I wish you excellent discussions and exchanges. Thank you.

Source – EU Commission