Chile

Green hydrogen vision

Chile plans to become the leading low-cost exporter of green hydrogen in the world by 2040. With some of the most powerful solar radiation on the planet in its northern regions and onshore winds that compete with the offshore potentials of other regions, Chile aims to take full advantage of its natural conditions. It has the potential to produce more than 1800 GW of renewable energy, 70 times the country's need for internal consumption. The government has a set target to produce the cheapest green hydrogen in the world with a price below $1.5 per kg by 2030.  

The country aims to become a key supplier of the energy sources of the future, with capacity to meet a substantial part of the expected demand from Europe. The government is also expecting large domestic demand for green hydrogen to be driven by the mining sector. 

“We have the renewable energy potential to install 70 times the electricity generation capacity we have today. This abundant renewable energy will enable us to become the cheapest producer of green hydrogen on Earth” - National Green Hydrogen Strategy, Ministry of Energy, 2020 

National Strategy

The Ministry of Energy unveiled its National Hydrogen Strategy at the end of 2020 with an objective to turn Chile into a frontrunner in green hydrogen production and export. The strategy addresses the policies and regulatory framework that will be enacted to encourage the development of the industry. The Ministry projects that Chile could produce up to 1.6 million Tonnes per year of green hydrogen and become the leading low-cost exporter by 2040, when the local market will be worth an estimated USD $33 billion (including USD $24 billion in exports).  

The Strategy envisages three stages: Stage I ⁠— activating the domestic industry and develop export markets through production incentives, supporting the creation of knowledge, infrastructure, and supply chains; and Stages II and III ⁠— scaling production, achieving a strong integration in international markets, mainly based on the development of new technologies and the use of green ammonia in industries including maritime transportation, aviation and energy storage. 

To achieve this, the Chilean government, through its ministries, mainly the Energy, Mining and Transport Ministries, has set out a regulatory roadmap, in which the enactment of a series of regulations is contemplated, namely: (i) the Hydrogen Facilities General Regulation; (ii) the Multi-Fuel Service Stations Regulation; (iii) the Technical, Construction and Security Requirements for GH2 (gaseous state hydrogen) Powered Vehicles Regulation; and (iv) the Hydrogen Systems for Mining Operations Regulation, among others. 

Impact targets

Targets for using green hydrogen in key industries have not yet been established.

Policy Spotlight

• Public–private partnerships to promote the green hydrogen trade. The government intends to set up a Public-Private Agreement for Hydrogen in Mining and Transportation, alongside key public, and private stakeholders to define specific barriers and actions to be carried out to accelerate the adoption of hydrogen in these sectors. 

• Standards and safety regulations. The government is modifying its regulations on its Law DL 2.224 (Article 3) that created the Ministry of Energy to now include hydrogen as an energy carrier and allow for bylaws to be emitted to regulate safety issues along the value chain.  

• Permits and piloting. A task force is being established by the Chilean Ministry of Energy under German- Chilean partnership to support developers in permitting and piloting processes for green hydrogen projects and its derivatives. The first meeting of the new task force was held in November 2021, where they discussed criteria for hydrogen certification schemes and the second was held in January 2022 on the perception of future green hydrogen consumers on the sustainability criteria. In December 2021, the Chilean National Development Agency selected  six green hydrogen production projects for development with plans to begin operating in 2025.  

Six projects by 2025

• The Chilean development agency Corfo has selected six hydrogen projects with a cumulative electrolyser capacity of 396MW which will be financed by public subsidies totalling US$50 million. The companies are Enel Green Power (US$16.9 million for 240MW of electrolyser capacity), Air Liquide (US$11.7 million for 80MW), Engie (US$9.5 million for 26MW), GNL Quintero (US$5.7 million for 10MW), CAP (US$3.6 million for 20MW), and Linde (US$2.4 million for 20MW).   

• The selected proposals are expected to attract investments of US$1 billion and produce more than 45,000 tons of green hydrogen per year. The Chilean government, which accepted 50% of the proposed projects, aims to have the six green hydrogen projects up and running by 2025. 

Financing

• Chile’s development agency, CORFO has committed €47 million in January 2022 to finance the development of six pilot projects. 

• The Ministry of Energy in coordination with the Budget Office, proposed the creation of the "Program to Promote Green Hydrogen in Chile" with public investment of €2.26 million.

Government GH Lead

• Ministerio de Energia 
• Division for Fuels and New Energy Carriers 
• National Council for Green Hydrogen 
• National Development Agency (CORFO) 

Comment

The new government in 2022 has reaffirmed the ambitious programme for green hydrogen. Several projects in development.