Chile

Solution Statement

In November 2020, the Ministry of Energy launched its National Green Hydrogen Strategy, which seeks to position Chile as the cheapest producer of green hydrogen on Earth. To fully achieve this, the Strategy sets goals such as having 5 GW of electrolysis capacity under development by 2025, and being a leading exporter of green hydrogen and derivatives by 2030.

Chile wants to develop the green hydrogen industry within the country, and place itself among the world’s leading producers and exporters of this renewable fuel by 2030.

One of the key actions considered in the Strategy is the development of capacity and knowledge transfer to satisfy the human capital needs that this new industry will demand, and the involvement of communities and local interest groups to ensure early and continuous participation to increase the value that local suppliers can capture. 

Chile is the ideal place to produce and export green hydrogen and its derivatives, including ammonia, methanol, and synthetic fuels.

Various studies, including those of the International Energy Agency and McKinsey & Company, show that Chile’s enormous wealth of renewable energy will allow it to produce the most competitive green hydrogen on the planet and on a large scale.

Challenge Statement

The main challenge that we are facing today is scaling up local demand for green hydrogen, driving the establishment and success of early pilot projects and securing the enabling conditions that prepare our territories for export-scale projects of this new energy carrier, while creating local value and regional development.

Our National Green Hydrogen Strategy defines 6 priority applications to be accelerated in the period 2020-2025, including ammonia production, oil refining, blending into local gas grids, and transport applications such as heavy-duty trucks, long-range buses and mining haul trucks.

To ramp up these and other local applications, we are addressing regulatory gaps, giving certainty to investors in project piloting, setting forth policy initiatives to create appropriate incentives consistent with our long term policy goals, raising international finance and support to harness long-standing global knowledge and expertise, building partnerships that enable the capture of international demand at early stages of the industry, preparing our territories, developing local capacity, identifying infrastructure requirements, and connecting and empowering local stakeholders. 

Energy Compact Description

According to the National Green Hydrogen Strategy, Chile has the goal of having 5 GW of electrolysis capacity under development by 2025; producing the cheapest green hydrogen on the planet by 2030; being one of the leading green hydrogen exporters by 2030, and achieving carbon neutrality by 2050, where green hydrogen applications are expected to account for 21% of the required GHG emissions reduction. 

To achieve these goals, the government has designed several actions on four key lines of work, namely: 

Regulation and permits: Bridging of regulatory and standards gaps throughout the hydrogen value chain to ensure safety and give certainty to investors; 

Finance and incentives: Contribute to closing the cost gap for local competitiveness & creating incentives for supporting early projects; 

Domestic demand and international partnerships: Accelerating local demand and local green hydrogen markets to achieve decarbonization & capturing international demand in early stages to position our country as a competitive provider; 

Local development: Preparing territories with productive, manufacturing, and services potential for capturing opportunities across the whole green hydrogen value chain. Connecting and coordinating local stakeholders, defining priorities, and empowering roles.

Energy Compact Indicators

Key Action 1: to 2020

  • Publication of the general regulation of hydrogen facilities for production, conditioning, storage, ground transportation and consumption systems.
  • Publication of the guide for the validation of pilots and hydrogen technologies in the mining industry
  • Train at least 10 people from different public services at regional level to speed up the processing of permits.

Key Action 2: to 2020-2025

  • +4 financed supply side projects
  • +4 financed demand side projects,
  • +3 incentive /support mechanisms

Key Action 3: to 2020-2030

  • Activation of local demand and/or pilot projects for green hydrogen in at least the 6 prioritized applications: (i) oil refineries, (ii) local ammonia market, (iii) mining trucks, (iv) heavy duty trucks, (v) long range buses and (vi) H2 blending in gas networks, by 2025.
  • Closing international partnerships and collaborations schemes with the main countries and regions that will lead the import of green hydrogen and its derivative
  • Becoming the global top exporter of green hydrogen and its derivatives, delivering 2.5 BUSD on exports yearly by 2030.

Key Action 4: to 2020-2025

  • At least 50% of the required workforce in the public services of the State are trained about green H2
  • Green hydrogen projects in at least 2 regions (hydrogen hubs/valleys)

In terms of organization, in the short term the Ministry of Energy is focusing its efforts on strengthening ties and initiatives with other services of the State, and creating and distributing knowledge and tools to other public institutions that will play a key role in enabling the green hydrogen economy.

Furthermore, hydrogen diplomacy is being used to create synergies with international platforms, including ports and future import destinations, while securing continuity milestones that help us mark the pathway for the long-term development of green hydrogen