Chile SNAPSHOT BY COUNTRY

Chile is an ideal location to develop green hydrogen. With a coastline that stretches 4,000 miles, it has access to water and an abundant and diverse renewable energy supply. The northern part of the country has the highest solar radiation in the world while southern Chile has some of the best conditions for wind energy. These conditions make it favorable for the country to be able to produce green hydrogen at some of the lowest rates compared to other countries.

Though Chile currently derives 68% of its energy from fossil fuels, the nation leads the way on green hydrogen in Latin America, having launched a national strategy for the fuel in 2020, which set out specific goals such as being the country with the cheapest green hydrogen on the planet, at less than US $1.5 per kg by 2030.

The government also expects initial domestic demand for green hydrogen to be driven by the mining sector, which has been under pressure to reduce its carbon footprint.

The country has committed to carbon neutrality by 2050 and pledged to close or repurpose all of its 21 coal-fired power plants by 2040, and its energy matrix is steadily becoming cleaner. Chile has drawn up a strategy that indicates that green hydrogen will help reduce the country’s greenhouse gas (GHG) emissions by 21%, and identifies the potential for hydrogen production and the possible markets and sectors that would use it.

Chile has almost 30 initiatives ranging from the application of hydrogen in public and cargo transport, to the production of methanol or “green” ammonia for the explosives industry.

The potential for green hydrogen to transform Chile’s renewable energy sector received an endorsement from the Government in Chile when the Ministry of Energy unveiled its national hydrogen strategy at the end of 2020. The strategy includes the policies and regulatory framework that should be enacted to encourage the development of the industry. The Ministry of Energy has formed a task force to make recommendations on how to improve the permitting process for new projects and is leading a government effort to improve the regulatory environment to promote foreign investment.

The Chilean hydrogen association, says green hydrogen “will be one of the spearheads” in Chile’s contribution to global warming mitigation measures. The fuel could contribute towards 24% of the country’s total carbon dioxide reductions by mid century.