Latin America’s Renewable Energy Potential: Building Productive Chains for a Green Transition
The transition to renewable energy sources is gaining momentum across Latin America, driven by expanding renewable energy capacity, advancements in energy storage technologies and the growing interest in low-emission vectors like green hydrogen. However, the impact of this shift extends far beyond simply generating cleaner power. It presents a significant opportunity to develop robust value chains, strengthen local industries, foster technological capabilities, create green jobs, and promote more balanced regional development. A webinar hosted by the Economic Commission for Latin America and the Caribbean (CEPAL) and Fundar, with support from the Open Society Foundations, on March 10, 2026, will focus on “Productive Chains in Renewable Energies and Hydrogen in Latin America,” exploring strategies to maximize these benefits.
Even as Latin America possesses abundant renewable resources and a nascent industrial base, challenges remain in integrating local suppliers, consolidating complementary industries, and establishing the regional articulation necessary for robust productive ecosystems. Developing these productive linkages – both upstream (including metalworking, chemicals, logistics, engineering, and specialized services) and downstream (such as green hydrogen, low-carbon steel, and fertilizers) – is crucial for diversifying the region’s productive matrix and maximizing the economic advantages of the energy transition. The Open Society Foundations, founded by George Soros in 1993, have reported expenditures exceeding $24.2 billion to support organizations promoting democratic governance and human rights globally, including initiatives focused on sustainable development. More information about the Open Society Foundations’ function can be found on their official website.
The Importance of Value Chain Development
The development of strong value chains is not merely about adding steps to the production process; it’s about creating a synergistic network of interconnected businesses and institutions. This requires strategic investment in infrastructure, workforce training, and research and development. Upstream linkages involve the supply of raw materials, components, and services needed for renewable energy projects, while downstream linkages focus on utilizing renewable energy to produce higher-value products. For example, green hydrogen, produced using renewable electricity, can be used as a feedstock for producing low-carbon steel or ammonia for fertilizer production, creating new economic opportunities and reducing reliance on fossil fuels.
Currently, many Latin American countries rely heavily on importing key components for renewable energy projects, limiting the economic benefits within the region. Strengthening local manufacturing capabilities and fostering regional cooperation can reduce this dependence and create a more resilient and sustainable energy sector. According to the Foundation Directory Online, the Open Society Foundations aim to shape public policy to promote democratic governance, human rights, and economic reform, which aligns with the goals of a sustainable energy transition.
Analytical Tools and Policy Initiatives
Identifying and prioritizing key value chains requires robust analytical tools. These tools can help policymakers understand the current state of the industry, identify bottlenecks, and assess the potential for growth. Input-output analysis, value chain mapping, and life cycle assessments are among the techniques that can be used to inform strategic decision-making. Effective industrial policies are essential for incentivizing investment, promoting innovation, and fostering collaboration between businesses and research institutions.
Several Latin American countries are already implementing or planning initiatives to support the development of renewable energy value chains. For instance, Chile has launched a national green hydrogen strategy, aiming to become a leading exporter of this clean fuel. Brazil is investing in the development of a bioenergy industry, utilizing its abundant agricultural resources to produce biofuels and biomaterials. Argentina is exploring the potential for developing a lithium battery supply chain, leveraging its significant lithium reserves. These initiatives demonstrate a growing recognition of the economic opportunities associated with the energy transition.
Regional Cooperation: A Key Enabler
While national initiatives are important, regional cooperation is crucial for maximizing the benefits of the energy transition. Latin American countries can leverage their complementary strengths and resources by collaborating on joint projects, sharing best practices, and harmonizing regulations. For example, a regional hydrogen hub could be established, allowing countries to share infrastructure and expertise, and to attract investment from international partners.
The webinar hosted by CEPAL and Fundar will explore the opportunities for regional cooperation, examining successful models from other regions and identifying potential areas for collaboration in Latin America. The Open Society Foundations, as noted on Wikipedia, have been active in supporting democratic governance and civil society organizations across the region, which can play a vital role in fostering dialogue and collaboration.
Challenges and Opportunities in Green Hydrogen
Green hydrogen, produced by electrolyzing water using renewable electricity, is emerging as a key component of the clean energy transition. Latin America’s abundant renewable energy resources – particularly solar and wind – position it favorably to become a major producer and exporter of green hydrogen. However, significant challenges remain, including the high cost of electrolyzers, the lack of infrastructure for hydrogen transportation and storage, and the need for clear regulatory frameworks.
Developing a robust green hydrogen value chain requires investment in all stages of the process, from renewable energy generation to hydrogen production, transportation, and end-use applications. This includes building electrolyzer manufacturing facilities, developing hydrogen pipelines and storage facilities, and creating demand for green hydrogen in sectors such as transportation, industry, and power generation. The webinar will address these challenges and explore potential solutions, focusing on the role of policy incentives, public-private partnerships, and regional cooperation.
Looking Ahead
The transition to a sustainable energy future in Latin America requires a concerted effort from governments, businesses, and civil society organizations. By prioritizing the development of robust value chains, investing in innovation, and fostering regional cooperation, Latin American countries can unlock the full economic and social benefits of the energy transition. The webinar on March 10, 2026, represents an important step in this direction, providing a platform for sharing knowledge, identifying opportunities, and building partnerships.
The next step in this process will be the publication of a policy brief summarizing the key findings and recommendations from the webinar, scheduled for release by CEPAL and Fundar in April 2026. Readers are encouraged to share their thoughts and experiences on this important topic in the comments section below. Let’s continue the conversation and work together to build a more sustainable and prosperous future for Latin America.
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