Argentina's Green Recovery: A Tale of Contrasting Priorities

Strategic Insights -

Argentina has pledged to pursue a green recovery from the unsustainable debt and Covid-19 pandemic, but its policies continue to support the production of green hydrogen from solar and wind power, while also investing in oil, gas, and silver extraction. This contradictory approach jeopardizes its international commitments to reduce emissions and tackle climate change, which is already affecting the country's economy due to water stress in many provinces.

Argentina has updated its climate goal to limit annual net greenhouse gas emissions to 349 million tonnes of CO2 (MtCO2e) by 2030, an increase of 35% above 1990 levels. However, this goal is not compatible with limiting global temperature rise to 1.5C, according to a report on Argentina by the Climate Transparency partnership. For that, emissions in 2030 would need to be around 210MtCO2e, or 9% below 1990 levels.

Key Takeaways:

  • Argentina's green recovery plan contradicts its continued investment in oil, gas, and silver extraction, a highly water-demanding activity, jeopardizing its international commitments to reduce emissions.
  • The country's updated climate goal to limit annual net greenhouse gas emissions to 349 million tonnes of CO2 (MtCO2e) by 2030 is not compatible with limiting global temperature rise to 1.5C.
  • Argentina aims to be carbon neutral by 2050, but will require massive deployment of renewable energy, something the country has struggled with in recent years.
  • The government's plan to develop a green hydrogen export hub for developed nations, in partnership with Australian company Fortescue Future Industries (FFI), will require massive deployment of renewable energy and will not feed into Argentina's domestic energy consumption.
  • The country's net zero plan appears divorced from its public policies, which promote the expansion of the hydrocarbon frontier through fracking and other extractive initiatives.
  • Argentina's two provinces, Chubut and Rio Negro, have great wind power potential, but Chubut's obsession with developing the province through open pit mining and political instability diverted investors towards Rio Negro.
  • The FFI project in Rio Negro will have little impact on Argentina's decarbonisation plans, as the green hydrogen produced will not feed into its domestic energy consumption.

Statistics:

  • Argentina's updated climate goal to limit annual net greenhouse gas emissions to 349 million tonnes of CO2 (MtCO2e) by 2030.
  • For Argentina to limit global temperature rise to 1.5C, emissions in 2030 would need to be around 210MtCO2e, or 9% below 1990 levels.
  • The FFI project in Rio Negro will require an investment of $8.4bn (1.2trn pesos) by 2028.
  • Argentina's net greenhouse gas emissions in 2018 were 366MtCO2e.
  • The country's aim to be carbon neutral by 2050 requires massive deployment of renewable energy, something Argentina has struggled with in recent years.
  • Argentina's domestic gas prices and imports will be reduced by the natural gas pipeline from the Vaca Muerta shale gas reservoir to the Province of Buenos Aires, expected to be completed by 2023.
  • Argentina will save between $1.3bn and $1.5bn in gas imports once the pipeline is operational.

Sources:

  • Climate Transparency partnership
  • Fortescue Future Industries (FFI)
  • Marcelo Kloster, government advisor on national economic development and board member at IMPSA
  • Ministry of Production
  • Comodoro Rivadavia mayor, Juan Pablo Luque
  • Capsa-Capex group, through the company Hychico
  • Flavio Tuvo, representative of Hychico
  • Maristella Svampa, renowned Argentine researcher and sociologist
  • Energy Monitor
  • Global Data Point
  • SyndiGate Media Inc. (Syndigate.info)