November 4, 2020

The Chilean Government presents a national strategy to convert Chile into a global leader in green hydrogen

The Chilean Government presents a national strategy to convert Chile into a global leader in green hydrogen
The primary objectives of the strategy are to produce the world’s cheapest green hydrogen by 2030, be among the three leading exporters by 2040 and have 5 GW of electrolysis capacity under development by 2025.

During their opening remarks at the international conference entitled “Chile 2020: Green Hydrogen Summit”, President Sebastián Piñera and Energy Minister Juan Carlos Jobet unveiled an ambitious national strategy to develop the green hydrogen industry and position Chile among the world’s leading producers of this renewable fuel by 2040.

At the event – the largest in Latin America and one of the leading open-access digital conferences on the topic at the international level – President Piñera emphasized that “hydrogen will enable us to opt for balanced development throughout the country and promote the growth of our human capital, creating an engine for progress and economic reactivation. Green hydrogen will enable us to export our renewable energy to a world that is quickly progressing toward decarbonization and that needs affordable clean energy.”

Energy Minister Juan Carlos Jobet discussed the details of the action plan that aims to make Chile a world leader in green hydrogen production and exportation. Estimates suggest that this new hub of progress will lead to the creation of 100,000 jobs and US$200 billion in investment over the next 20 years.

The Energy Minister stated, “this new industry that is developing could become as important to the national economy as the mining industry. It will also help the process of decarbonizing some production activities, like mining and agriculture, increasing their international competitiveness and contributing to the goal of becoming a zero-emissions country by 2050.”

“Green hydrogen is a strategic opportunity for Chile. Our country is the ideal place to produce and export green hydrogen and its derivatives, including ammonia, methanol and synthetic fuels. A number of studies, including those by the International Energy Agency and McKinsey & Company, show that Chile’s vast wealth of renewable energy would enable it to make the most competitive green hydrogen on the planet and on a large scale,” highlighted Jobet.

Objectives and action

Chile’s national green hydrogen strategy has three main objectives: Produce the world’s cheapest green hydrogen by 2030; be among the three leading exporters by 2040; and have 5 GW of electrolysis capacity under development by 2025.

To that end, an action plan has been developed to speed up the use of green hydrogen in critical national applications by 2025 and enter the export market by 2030.

Among the actions are a US$50 million round of finance for green hydrogen projects, which aims to help investors address any shortcomings and create early experience.

At the same time, a task force will be set up to guide permit processing and the implementation of pilot projects for green hydrogen and its derivatives.

“We will also create another task force to position Chile internationally and create three international consortia in Chile with at least 1 GW each,” said Jobet.

Gas network quota mechanisms to increase the demand for this clean fuel will also be explored. A similar system was successfully implemented to promote renewable energy.

A workgroup involving state-owned companies will be set up to accelerate green hydrogen adoption at those companies and their suppliers to generate internal demand. Green hydrogen will also be considered in land policy, design and planning processes, particularly when surveying and resolving infrastructure needs.

In another realm, Minister Jobet announced a public-private round table to discuss the route to carbon pricing and taxation that best reflects the external aspects of fuels. He also stated that the ministry will play an active role in removing critical barriers, like setting the safety standards required to ensure planning certainty.

Among the other key actions in the strategy are capacity building and knowledge transfer to meet the new industry’s human capital needs, engaging with the communities and local stakeholders to ensure early, ongoing participation and increasing the value that local suppliers can capture.