South America’s ambition to become a global hydrogen exporter is snagged by global market uncertainty, grid and infrastructure constraints, and gaps in supportive policy tools, according to a new Insight Report from the Energy Industries Council (EIC), the world-leading trade association for the energy supply chain.
According to the report, based on data drawn from EICAssetMap and EICDataStream, the region counts a pipeline of 143 hydrogen projects worth about $263 billion in potential capital spending, almost all of them green hydrogen projects. The largest of these projects are aimed at export markets such as Europe and Asia.
The vast majority of these projects are still at early stages, but recent policy steps and market conditions have shown some improvement.
"The hydrogen industry in South America has been pressing governments for more supportive frameworks and financial instruments," the report authors wrote. "While the sector is still evolving, 2025 has marked a turning point, with early signs of regulatory reform and increased momentum across the project pipeline."
They said this has been visible through projects advancing through permitting and FEED stages, as well as a stronger flow of Final Investment Decisions (FIDs), with ten projects having advanced to FID from 2024 up to September 2025. The report notes, however, that many of the projects announced over the past five years are unlikely to materialise as the industry matures. As of September 2025, five projects of the total pipeline have been put on hold.
The report shows that the operational landscape is still dominated by grey hydrogen from Petrobras refineries, while clean hydrogen sits in a handful of small pilot plants in Argentina, Brazil, Chile, Colombia and Peru. Of the 143 projects in the pipeline, 141 target green hydrogen.
The authors flag infrastructure constraints as a key issue across the continent, with transmission bottlenecks, underdeveloped port facilities, and limited water availability in some regions posing "risks to timely project delivery and scalability."
In Brazil, despite having a new legal framework for low-carbon hydrogen, tax credits on the way, multi-billion public funding lines from BNDES and a set of official hydrogen hubs, the report notes that grid readiness and transmission expansion still strain project progress, especially in the North-East where new renewables for hydrogen must compete with existing demand.
Chile is another country where policy momentum has yet to translate into a larger wave of projects reaching FID. Santiago has a national hydrogen strategy, an 81-point action plan, land concessions in resource regions and a proposed tax credit of up to $5 per kilo. But the country is struggling to connect remote renewable clusters to ports and industrial users at scale.
In Argentina, the challenges are more the result of politics and economics. The report describes Argentina as positioning itself as a long-term export player, anchored in Patagonia’s wind resources, but still stuck in the pre-FID phase. The authors note that macro conditions, including currency instability, inflation, and policy uncertainty are undermining investor confidence, weighing on large private projects from international companies.
That supply-chain gap runs across the region. The EIC report identifies 144 suppliers with hydrogen-relevant capability in South America, two-thirds already active in hydrogen work and almost nine in ten drawn from oil and gas. Only one operational electrolyser manufacturing facility (Hytron in Brazil) is named in the report, with the rest of the region leaning on imported kit and small assembly plans.
For the global supply chain, that mix of promise and friction feels familiar. The EIC’s Global Head of External Affairs, Rebecca Groundwater, said the findings signal a clear need for alignment between national ambition and project fundamentals. “Governments want large-scale hydrogen, but projects need grids, ports and stable revenue paths. Without that alignment, investment moves elsewhere,” she said.
The report points to promise, noting the growing use of pilots in refineries, mining fleets and fertiliser supply, in addition to a wave of international support from multilateral lenders and European partners. It also sees a shift from broad strategies to more concrete tools such as auctions, tax credits and targeted subsidies.
The report was written by Marco Maedo, EIC Energy Analyst, Kevin Pedrosa, EIC Senior Supply Chain Analyst, and Guilherme Bie, EIC OPEX and Decommissioning Analyst.