It is well known that natural gas production in the Trinidad and Tobago economy has been on the decline and in this context, to ensure the survival of the downstream petrochemical sector, the suggestion by policymakers is to make a switch from grey hydrogen usage to green hydrogen usage. There are a total of eleven ammonia plants in Trinidad and Tobago, of which two are inactive, including two ammonia complexes situated on the Point Lisas Industrial Estate, with a combined annual capacity of 5.2 million metric tonnes (MT) of ammonia. Table 1 provides details on the launch dates, technology and annual capacities for each ammonia plant in Trinidad:
The clear indication is that the Trinidad and Tobago economy is a major exporter of ammonia, methanol and urea, both absolutely and relatively. Indeed, between 2000 and 2019, the Trinidad and Tobago economy benefitted from US$23.87 bn in ammonia exports.
Critically, the Trinidad and Tobago economy has a comparative advantage and a competitive advantage in the production of ammonia, built up over many years. Table 3 below shows the comparative advantage scores of Trinidad and Tobago as regards ammonia, methanol and urea for 2000, 2010 and 2021. Trinidad and Tobago in 2000 had a comparative advantage (revealed comparative advantage (RCA) value >1) in 26 commodities and in 2021 had comparative advantage in 27 commodities. In both 2000 and 2019, Trinidad and Tobago had strong comparative advantage (RCA value > 4) in ammonia and methanol.1 (Three digit SITC data is deployed herein).
The concept of ‘revealed comparative advantage’ (RCA) as defined by Bela Balassa, is commonly applied to identify a country’s strong and weak industries. Using (Hinloopen and Van Marrewijk 2001) class division of the Balassa index as follows: Class a: 0 < Balassa index < 1 – captures all those sectors without a comparative advantage, that is, have a comparative disadvantage. Class b: 1 < Balassa index < 2 - “weak comparative advantage” Class c: 2 < Balassa index < 4 - “medium comparative advantage” Class d: 4 < Balassa index - “strong comparative advantage”
The Trinidad and Tobago economy is at an important crossroad as it makes an energy transition. As is stands, Trinidad and Tobago is a major player with petrochemicals, and the economy has a sound oil and gas infrastructure and export facilities as well as operational experience that spans almost 100 years.
This gives the Trinidad and Tobago economy a head start compared to other economies when it comes to developing a green hydrogen economy. Many of the requirements to be a leader in green downstream products are already in place, for example, the Trinidad and Tobago economy has a thriving energy ecosystem and there are already existing markets for the products produced by this energy ecosystem, with long-standing trade relations. The diagram below generated from the World Integrated Trade Systems (WITS) shows the number of countries to which Trinidad and Tobago sold its ammonia for the time period 2000 to 2021.
The government, on recognising the sharp and extreme problem associated with the supply of grey hydrogen linked to natural gas production, has outlined that it will target its significant offshore wind capacity of 57 gigawatts (GW). 57 GW translates into 25 GW of power and this electrolyses to produce 4 mtpa of environmentally friendly hydrogen. This ambitious undertaking is projected to spark the creation of numerous job opportunities spanning construction, operational and maintenance roles. Currently, Trinidad and Tobago’s existing infrastructure has the capacity to handle approximately 1.7 million metric tons per annum (Mtpa) of hydrogen.
By way of a timeline, the diagram below shows that by 2040 Trinidad and Tobago authorities are hoping to bring onstream 5GW approximately of (wind) renewable energy, of which several commentators have suggested would constitute 2 GW of onshore wind and 3 GW offshore wind.
In closing I cite a comment from “The Roadmap for a Green Hydrogen Economy in Trinidad and Tobago”: Renewable Energy and green hydrogen represents ... an incredibly bright future for Trinidad and Tobago in the years ahead. The right economic, political, and social environment is needed to bring about a more sustainable future. If developed cohesively, the country has the potential to become a green energy superpower, an aspiration that is well within reach of Trinidad & Tobago