Inside Energy Transition is celebrating its fifth anniversary. From your perspective, how has the concept of the energy transition evolved, both globally and within the Techint Group?

The first thing I’d say is that a lot has happened over the past five years, both globally and within the energy sector. Some technologies have advanced quickly, others have stalled, and some have regained momentum after initial setbacks. The speed of change is undeniable, but what has become clear is that only solutions that are economically competitive will ultimately scale up.

For me, the idea of a single, uniform “energy transition” has also lost relevance, given the differences in each case. What has shifted most noticeably is the narrative. In 2020, the prevailing view was that oil and gas were on the verge of decline, with clean energy taking clear precedence over all other considerations. Today, that perspective has evolved. Clean energy remains central, but security and affordability have moved to the forefront. The transition is now being shaped by a more balanced framework—one that recognizes the need to reconcile these three dimensions. Today, the energy transition is evolving in a more pragmatic fashion, in the search to balance the three components. I’d say that reliable and cost-competitive are the most crucial factors in the current context.

What’s driving this shift toward pragmatism?

A more uncertain global backdrop has been a key factor. Armed conflicts, shifting geopolitical alignments, changes in U.S. leadership, and growing uncertainty around global markets have all forced a reassessment of energy value chains.

This has translated into a clear shift in priorities, one that’s also evident in other parts of the world. After the war in Ukraine, Europe moved quickly to secure its energy supply, diversifying sources and reducing its dependence on Russian gas, from around 40% to roughly 10%. For example, in Germany, they’re saying that they need to reactivate their nuclear program as they see the need to be more pragmatic in order to be competitive.

Has this put the brakes on the energy transition program?

There has been no slowdown. On the contrary, a great deal has been happening across the Group. In the past few years, Tecpetrol developed three wind farm projects, which are now being operated by Tenaris and Ternium in Argentina and cover 100% of electricity use from the grid with carbon‑free supply to their steel plants in the country, in line with the 2030 commitments set by both companies. These are tangible, concrete projects that show real progress on the ground.

In parallel, we are advancing our lithium strategy in Argentina. Tecpetrol has acquired assets in three lithium salt flats in Argentina, enabling us to develop expertise in direct lithium extraction (DLE) technologies. Over time, similar technologies have begun to scale in neighboring salt flat operations. Following a sharp correction in international prices—which temporarily undermined project economics—the market is now showing signs of recovery. We expect to move into new phases over the 2026–2027 timeframe as market conditions and technologies continue to mature.

At the same time, TechEnergy Ventures has built a diversified portfolio of 19 investments across different segments, allowing us to test which technologies are best positioned under the current, more pragmatic framework.

Which verticals are growing the fastest?

Electrification is clearly leading the way in all its dimensions. Renewables, electric mobility, transmission infrastructure, and lithium batteries for mobility and storage are all advancing rapidly, driven by sustained cost reductions—particularly in batteries—and by their already economic competitiveness.

As a result, global investment in energy transition technologies has reached levels roughly twice those in fossil fuels. In 2025, spending on energy transition technologies totaled around USD 2 trillion, compared with roughly USD 1 trillion invested in fossil fuels.

Battery storage is scaling especially fast. Global investment reached approximately USD 40 billion in 2025, with installed capacity increasing by 80%, while costs have fallen by around 20% per year over the past decade. This acceleration is reinforcing electrification across power systems and enabling the integration of renewable generation at scale.

In parallel, electricity demand is beginning to grow structurally, particularly in the United States, where the expansion of data centers is pushing consumption up at an expected annual rate of 3.6%, well above the historical average. For the first time, electricity demand is set to grow faster than GDP.

China also offers a clear example of this shift. Faced with a high import dependence on oil and gas, the country has significantly expanded power generation capacity and electrification. Nearly half of new car sales are now electric, reducing the economy’s exposure to oil and gas price volatility, even as overall energy demand continues to grow.

Which vertical do you think is facing the greatest challenges in the current situation?

Technologies that depend heavily on incentives or subsidies are under the most pressure. Green hydrogen and carbon capture and storage are clearly two segments that are progressing more slowly than anticipated when TechEnergy Ventures was launched. The earlier assumption that Net Zero would be pursued at any cost has given way to a more disciplined view of timelines and economics. In today’s market, there is limited appetite to pay a significant premium simply for lower emissions.

Green hydrogen—produced through water electrolysis using renewable energy—failed to reach expected costs of around USD 2 per kilogram, and current costs are closer to USD 6. Blue hydrogen also remains more expensive than gray hydrogen. While both are produced from natural gas, blue hydrogen carries the additional cost and complexity of carbon capture.

That said, the Group is advancing a turquoise hydrogen initiative, Tulum Energy, designed to overcome these limitations. It’s the first startup launched by TechEnergy Ventures, based on methane pyrolysis technology developed by Tenova. Unlike green or blue hydrogen, the process separates carbon in solid form, avoiding CO₂ emissions and eliminating the need for capture and storage. It enables hydrogen production at a cost comparable to—or below—gray hydrogen, while generating a marketable byproduct, solid carbon (carbon black), strengthening project economics.

Beyond hydrogen production, its use as a reducing agent in direct reduction processes also offers efficiency gains compared to conventional gas-based or blended approaches.

When do you expect to see that technology in action?

In 2025, Tulum Energy secured USD 27 million in funding from a group of investment funds following a successful venture capital round. These resources are being allocated to the construction of a pilot plant in Pesquería, Mexico, within Ternium’s industrial complex, where a new steel mill is currently under development. Construction is expected to begin in the coming months.

What other sectors do you see as having the greatest potential going forward?

Geothermal energy is emerging as a promising area, although it has yet to reach full competitiveness. Although investment growth remains moderate, advances in technology could improve its economics in the near term. It’s a reliable base energy source and unlike intermittent renewables, geothermal provides continuous, stable power which makes it very attractive for the development of data centers supporting artificial intelligence, particularly in the United States.

TechEnergy Ventures has already positioned itself with investments in three geothermal companies. We see this sector as having the greatest potential and relative resilience in the context of the shift in narrative.

Copper is another area gaining momentum, driven by demand linked to electrification. It’s one of the critical minerals most likely to grow. Within the Group, this translates into opportunities on the supply side. Techint Engineering & Construction and Tenova are well positioned to support the development of copper projects through engineering and technology solutions, but we do not see ourselves as mine operators.

Is the electrification of the vehicle fleet an irreversible global trend?

Broadly, yes, although with some regional and segment-specific exceptions. We recently attended CERAWeek, where Ford CEO Jim Farley gave a fascinating talk, underscoring the need to focus on core strengths while adapting to a changing industrial model. He said, “We need to focus solely on what we do best, which is the F-150 pickup truck. The United States needs to follow China's example. We need to change our mindset. And Henry Ford would be thrilled at this historic moment. I build my car using 10,000 parts; over there, they build it using just three.”

Demand for electric cars in 2025 grew by 23%, and global sales reached 20.9 million units, a rate that’s growing at the expected pace every year. Lithium demand is also continuing to rise, perhaps even faster: long-life battery production is also growing more rapidly than predicted. Advances in battery recycling technologies are also addressing one of the sector’s key constraints.

How do you assess the role of natural gas and oil in this scenario?

They will continue to have very strong demand for decades. As I said, the narrative has evolved. Natural gas has long been positioned as a transition fuel, whereas oil, by contrast, was once seen as more contentious. Today, we see that oil is now expected to remain part of the mix for longer than previously anticipated.

Gas, in particular, is set to play a central role in the energy matrix well into the next century. Growing consumption in China and Europe will require a diversified supply. In this context, Latin America—and Argentina in particular, with Vaca Muerta—stands out as a potential key supplier.

What lessons have we learned over the past five years?

Enthusiasm can lead to conclusions that are overly definitive—and often exaggerated. Reality is always more moderate, one way or the other. It’s like a pendulum finding its balance; there are extremes, but in the end, the world moves forward through more rational and pragmatic decisions. And so, what guides the transition are also rational and pragmatic decisions. This means that it’s moving forward, setting its pace in a world where change is happening at a dizzying rate.

The key is to avoid being carried away by short-term momentum. Understanding the structural drivers behind these shifts is essential to distinguishing what is durable from what is not—and to making informed, long-term decisions.

How has the relationship between the Energy Transition Department (DITE) and the Group’s companies evolved in terms of synergy?

Synergy has been central from the outset, particularly in accelerating the learning curve. Developing new capabilities without the Group’s support—its technical expertise and deep understanding of decarbonization needs—would have been significantly more challenging. Collaboration across companies, plants, and projects has enabled teams to share knowledge, align priorities, and build a common technical foundation, one that’s highly relevant.

We kicked off a few years ago with a workshop that brought together different members. We started building, as one or two people, and today we’re a team of around 60. We hope to continue expanding by adding more collaborators to advance lithium development and other emerging opportunities.

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