Mexico is positioned to play a leading role in Latin America’s hydrogen sector, thanks to its exceptional renewable resources, its strategic geographic location, and its preferential access to the North American market through the USMCA trade agreement. With 31 clean hydrogen projects under development, representing an investment of approximately US$23 billion, the country is already demonstrating decisive momentum in building its hydrogen industry.
Mexico’s membership in the global solar belt provides it with among the highest solar irradiation levels in the world, forming the foundation for competitive renewable hydrogen production. The country possesses significant solar, wind, and geothermal capacity, circumstances that can drive renewable hydrogen production at scale.
This abundant renewable resource base translates directly into cost advantages. The Hydrogen Council’s Hydrogen Insights document mentions that Mexico could achieve up to 63% lower renewable hydrogen production costs compared to other countries, a competitive edge that stems primarily from its superior renewable resource quality.
Geographic and Trade Advantages
Mexico’s geographic position offers dual strategic benefits for hydrogen development and export. The southern region of the country serves as a continental nexus, maintaining strong commercial and business ties with both Central and South American nations despite Mexico’s classification as part of North America. Simultaneously, Mexico’s access to both the Pacific and Atlantic oceans enables hydrogen exports to diverse global markets, from Asia-Pacific economies to European buyers.
The United States-Mexico-Canada Agreement (USMCA) provides Mexico with preferential access to the world’s largest consumer market. This trade framework allows Mexico to export clean hydrogen to the United States and Canada under favorable commercial conditions while also positioning the country as a manufacturing hub for hydrogen-related equipment. Mexican industry could produce electrolyzers, turbines, fuel cells, hydrogen vehicles, and compressors for export to North American markets, leveraging existing industrial infrastructure established under the trade agreement.
Current Industry Momentum
Mexico’s clean hydrogen industry is advancing with notable determination. The country currently has 31 projects in different stages of development with investments totaling around US$23 billion. These projects will produce green and turquoise hydrogen, green ammonia, methanol, and geological or white hydrogen through Pemex initiatives.
Two green hydrogen production plants are already operational in the states of Queretaro and San Luis Potosí, demonstrating that Mexico has moved beyond the planning phase into actual production. This year, Mexico was selected to lead the Latin American Hydrogen Alliance, which brings together hydrogen associations from Argentina, Brazil, Uruguay, Peru, Colombia, Costa Rica, Chile, and Mexico. This leadership position enables Mexico to articulate efforts and align objectives for homogeneous development of the renewable hydrogen industry across Latin America.
Recent Policy Developments
In a significant policy development announced in late September 2026, Mexico’s Federal Electricity Commission (CFE) incorporated green hydrogen into its 2026-2030 Development and Strengthening Program. The program includes a 20MW green hydrogen project under mixed investment schemes for the expansion period. While modest in capacity, this inclusion marks an important step by formally recognizing hydrogen within CFE’s technology portfolio for national electric system expansion and diversification.
The CFE program contemplates 52 expansion projects with a capacity of 18,597MW and an investment of MX$467 billion (US$26 billion). The plan foresees the installation of 15,203MW of renewable capacity, including solar photovoltaic, wind, solar thermal, and geothermal technologies, among others. This incorporation represents a substantive part of the new capacity planned for the period and reflects the growing role of clean energy within CFE’s expansion strategy.
The participation of renewable energy in CFE’s generation is projected to rise, moving from 21% in 2025 to 34% in 2030. This evolution forms part of a strategy oriented toward diversifying the energy matrix and increasing the participation of technologies with lower carbon footprints.
Hydrocarbon Sector Planning
The Hydrocarbon Sector Development Plan (PLADESHi) incorporates energy transition and decarbonization as part of the sector’s transformation strategy. Within this framework, the document identifies green hydrogen as an element with potential for industrial decarbonization through its production via electrolysis powered by renewable energy. According to the plan, PEMEX will be able to evaluate various technological alternatives to optimize costs and resource availability, with potential applications in internal processes, renewable fuel production, and CO₂ capture and utilization schemes.
The plan also contemplates sustainable aviation fuel (SAF) development through a value chain that includes installing a biorefinery to transform raw materials such as ethanol into bio-jet fuel. The objective is to reach a target participation of 5% SAF in national aviation fuel consumption by 2030, contributing to the diversification of PEMEX’s revenues and the decarbonization of the aeronautical sector. Both green hydrogen and SAF are framed within a broader strategy oriented toward incorporating clean energy and technologies with lower environmental impact into hydrocarbon value chains.
Infrastructure Considerations
The growing incorporation of renewable generation also presents new challenges for National Electric System operation and reliability. In this context, the program highlights the importance of strengthening electrical infrastructure and incorporating technologies that enable reliable integration of new capacity.
Energy storage acquires relevance in this process as a complementary technology to manage the variability of sources such as solar and wind, as well as to contribute to system stability and flexibility. While the program does not establish specific energy storage capacity, its integration forms part of the technological context associated with incorporating new renewable capacity and strengthening system reliability.
An important expansion of transmission infrastructure joins this effort. For the 2026-2030 period, 175 projects and 7,545 additional kilometers of transmission lines are contemplated, with investments aimed at modernizing and strengthening electrical networks. This infrastructure will be fundamental for accompanying renewable generation growth and facilitating its integration into the national system, particularly given a matrix with an increasingly larger participation of variable sources.
Regional Leadership and Next Steps
Mexico’s hydrogen ambitions extend beyond national development to regional coordination. By leading the Latin American Hydrogen Alliance, Mexico can articulate efforts and align objectives for homogeneous development of the renewable hydrogen industry across Latin America, further cementing its role as a regional hub.
For Mexico to fully realize its potential as Latin America’s hydrogen leader, continued policy development, regulatory clarity, and sustained investment in both production capacity and enabling infrastructure will be essential. The foundation is in place: exceptional renewable resources, strategic geography, trade advantages, growing project pipelines, and emerging policy recognition. The trajectory now points toward Mexico becoming not just a regional participant but a defining force in Latin America’s hydrogen economy.
