IAHL Corporation (IAHL)

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Oil and gas exploration has been at the heart of Colombia’s national energy strategy and that of its National Oil Company, Ecopetrol. But as the world decarbonises and Colombia focuses on its own net zero target, the winds of change are blowing. How can the country now become a regional leader in a sustainable approach to energy?

Colombia could diversify into metals exports

Colombia is already a small nickel producer and could shift its ferronickel production to nickel sulphate, used in electric vehicle (EV) batteries. Colombia is also one of 20 governments that has a Free Trade Agreement (FTAFTA) with the US. This is a critical piece of trade policy in place that could support expanded trade with the United States following the IRA.

Colombia is also has material reserves of copper, another metal essential to the energy transition. More exploration and permitting clarity are required to ramp up production.

Giving the green light to low-carbon hydrogen

As wind and solar expand, we expect resulting lower power costs to help green hydrogen produced in Colombia become economically competitive with current forms of hydrogen production and some fossil fuel sources by the 2030s.

Hydrogen-to-power strategies are key to decarbonisation pathways in Europe and Asia, making these key potential export markets for hydrogen produced in Colombia. We estimate the levelised cost of hydrogen (LCOH) in Colombia could be similar to Chile’s. Potential export volumes from Colombia would be globally competitive, especially into Europe.