NATIONAL GREEN HYDROGEN

Chile, a clean energy provider for a carbon neutral planet

NATIONAL

GREEN HYDROGENSTRATEGY

National Green Hydrogen StrategyPublished by the Ministry of Energy, Government of ChileAlameda 1449, Santiago Downtown Tower II, 13th FloorSantiago, ChileNovember, 2020

The authors would like to thank McKinsey & Company for the analytical supportand insight provided in the making of this policy. They also recognize the earlywork of the Solar and Energy Innovation Committee of CORFO in promoting thenational discussion on hydrogen. The Ministry of Energy also thanks the constantsupport of the Energy Efficiency and Renewable Energies Program of the Germanagency GIZ, as well as all the public institutions, private companies, civilassociations, and individual collaborators that contributed to the development ofthis public policy.

Editors:Max Correa A. – Carlos Barría Q. – Benjamín Maluenda P.

Design: Patricia Escobar A.

Images: UnsplashCover: Pablo Acevedo; Page 4, La Tercera; Page 5, Antonio García; Page 14, Alexander Schimmeck;Page 15, Kurt Cotoaga; Page 16, Antonio Martínez ; Page 20, Tilo Mitra; Page 24, Willian Justen deVasconcellos; Page 25, Eduardo Cabrera; Page 26, Bruna Fiscuk; Page 27, Claudio Rolli; Page 28, JuanManuel Núñez Méndez. Image in page 9 by Guy Wenborne – Imagen de Chile. Image in page 29 byGnzlndrs.

The prefixes k, M, B, and T used throughout this document symbolize thousands,millions, billions, and trillions, respectively.

The contents of this document may be reproduced in any media while properlyciting its source.

This document is a update version after the public consultation process. The document included the different

observation that the public made in the public consultation that take place between the 3 and 24 of November of

2020, in the Ministery of Energy web site.

ContentsChapter 1Time for action

Chapter 2An opportunity for Chile

Chapter 3Our strategy

Chapter 4Pillars

5

9

15

20

Chapter 5Action plan

24

Juan Carlos Jobet E.Minister of Energy

Hydrogen, the atom composed of just oneproton and one electron, is the most abundantsubstance in the universe. It is also the lightestand one of the smallest elements on theperiodic table. Recently, a lot of attention hasbeen paid to this diminutive element and itspotential role in combating global climatechange. Specifically, the hype around hydrogenhas centered on its ability to help cutgreenhouse gas emissions in sectors of theeconomy which are hard to abate. Could it bethat the simplest, smallest atom in ouruniverse might hold the key to confrontingclimate change, our largest, most complexchallenge?

Like hydrogen, Chile is small by nature and,accordingly, contributes just 0.3% to globalgreenhouse gas emissions. However, we toohave an outsized role to play in turning the tideon rising emissions and pursuing a low carbonpath to growth and development.

What we lack in size, we more than make upfor in potential. In the desert in the North, withthe highest solar irradiance on the planet, andin the Patagonia in the South, with strong andconsistent winds, we have the renewable

energy potential to install 70 times theelectricity generation capacity we have today.This abundant renewable energy will enable usto become the cheapest producer of greenhydrogen on Earth. Our National GreenHydrogen Strategy is aimed at turning thispromise into reality.

The Strategy is the result of collaborative workbetween industry, academia, civil society andthe public sector, and is an essential piece ofour carbon neutrality plan and commitment tosustainable development. It will allow us toproduce and export products that are createdusing zero carbon fuels, distinguishing ourexports as clean products for end users. It willalso enable us to export our renewable energyto the world in the form of green liquidhydrogen, green ammonia and clean syntheticfuels.

Traditionally, Chile lacked fossil fuels and wasforced to import the energy it required. Now,the coming of age of the tiniest atom will allowus to drive deep decarbonization in our owncountry and throughout the world. ThisStrategy is the first step for Chile in embracingthis promise and fulfilling its new potential.

NATIONAL GREEN HYDROGEN STRATEGY| 2

NATIONAL GREEN HYDROGEN STRATEGY | 3

“ “This National Green Hydrogen Strategy marks an essential starting point for a profound transformation of the country's productive identity.

VivianneBlanlot

RicardoLagos

Jeannette von Wolfersdorff

Klaus Schmidt-Hebbel

Marcelo Mena

Gonzalo Muñoz

Our country is committed to reducing itsgreenhouse gas emissions to help slowdown global climate change, movingtowards sustainable development. It is inChile's wealth of clean energies that wesee an engine to decarbonize the country'sactivities, diversify its energy matrix andgenerate new industries for localdevelopment. Chile can transition from acountry that grows by extracting non-renewable resources, to one thatproduces the clean and renewable fuelsthat the world requires to avoid climatechange.

Chile has a unique opportunity to developa competitive green hydrogen industrythat, from electricity produced with low-cost renewable resources, forms anenergy source for local use andexportation, and promotes a sustainableeconomy around it.

This opportunity can have a great impacton our country’s brand, adding a greenvalue to the products created in Chile,reducing the carbon footprint in

transportation and offering our renewableenergy to those that need it. A concreteopportunity, for example, would be tobecome the world's leading producer ofgreen copper. This presents theopportunity to generate spaces forinnovation, promote growth and localemployment, as well as create newcompanies with local and global impact.

The great challenge of these coming yearswill be to realize these opportunitiesthrough concrete actions. We see that thisNational Green Hydrogen Strategy marksan essential starting point for a profoundtransformation of the country's productiveidentity. But it is also essential, because itpositions Chile as a global leader andgenerates public-private coordinationaround clear objectives that guide action.

We must promote the use of this energywithin Chile, displacing the consumption offossil fuels in the mining, transport andagricultural sectors, in order to offerproducts that are low in emissions.

To this end, clear and transparentregulatory signals which level the playingfield with dirtier fuels are essential. Inaddition, clear signals regarding financialsupport, as well as coordination andleadership from the Executive to attractlocal and international companies are key.In close collaboration, we must alsofacilitate the development of an exportindustry for hydrogen and its derivatives,which will allow us to achieve economiesof scale that will make us competitive.

Thus, Chile will become an exporter ofrenewable energy to the world, through itsenergy and green label products.

As an Advisory Board for the developmentof the National Green Hydrogen Strategy,we are very excited to promote thisopportunity for the country, helping to laythe foundations for what will be a newindustry for Chile, whose success will bringbenefits to both the country and theplanet.

LETTER FROM THEADVISORY BOARD

Former Executive Secretary of theNational Energy Commission and Former Minister of National Defense

Former President of theRepublic

Founder of the Observatoryfor Fiscal Spending in Chile and economist

Former Chief Economist ofthe OECD, academic and consultant

Former Minister of theEnvironment and academic

High-Level Champion COP25, cofounder SistemaB and entrepeneur

The path to a participatory strategy

Technical roundtablesRoundtables were carried out with participation fromcompanies, universities, research institutions, andindustry associations. Barriers to the development ofhydrogen were identified, and actions to solve themwere prioritized.

4 sessions throughout June and July 2020

Participants: 66 organizations.

Interinstitutional roundtableDiscussion roundtables took place between keypublic stakeholders to refine a diagnosis, proposeobjectives, and construct a common vision for thedevelopment of green hydrogen in Chile.

4 sessions between April and October 2020

Participants: The Ministries of Energy; Science, Technology, Knowledge, and Innovation; Mining; Economy; Transportation and Telecommunications; Environment; Foreign Affairs; as well as CORFO, InvestChile, and the German agency GIZ.

Advisory BoardA board was formed with experienced publicpolicy and climate action experts to advise theMinistry of Energy on high-level strategic issuesregarding green hydrogen public policy making.

4 sessions between May and August 2020

Members: Former President Ricardo Lagos, Vivianne Blanlot, Marcelo Mena, Gonzalo Muñoz, Klaus Schmidt-Hebbel, Jeannette von Wolfersdorff.

Citizen workshopsInteractive workshops were carried out withrepresentatives from NGOs and citizenassociations. Local concerns andperceptions regarding the role of the State ingreen hydrogen development were raised.

3 sessions in August 2020

Participants: 90 representatives.

Public ConsultationThis document was subject to the

public consultation process where the observation made by the citizen was included. This process was available in the Ministry of Energy’s website at energía.gob.cl.The public observation was received between the 3 and the 24 of November of 2020


https://www.energia.gob.cl/

Time for action

1The simplest molecule to confront

the most complex challenge

Bolero solar photovoltaic plant, Antofagasta Region

We are facing a climate crisisScience has warned that the world is already facing a climate crisiswithout precedent in history, caused by human action. This crisiswould not stop unless transformative actions are undertaken on aglobal scale.

Chile is committed to climate action in a decisive and ambitiousmanner. In 2020, it updated its Nationally Determined Contribution(NDC) and pledged to become a net-zero emission country by 2050,the only developing country to do so and one of the few to beginparliamentary discussion on a Climate Change Bill. Fulfilling theseobjectives will require transformative actions in Chile’s society andeconomy.

Energy production and utilization are at the center of the challenge we faceThe way in which energy is produced and used throughout the worldwill change radically. Three quarters of global greenhouse gasemissions are associated with the energy sector, principally driven byfossil fuel use. Chile has already set itself on a path to energy efficiencyand electrification using renewable energy. However, complementarysolutions are needed to decarbonize economic sectors andapplications in which direct electrification or other solutions are notcost-efficient, reliable, accessible, or safe.

Global warming referenced to 1850-1900 (°C)

Estimated and probable

anthropogenic warming

Global CO2eq emissions reach net zero in 2055

Global CO2eq emissions reach net zero in 2040

Non-CO2 radiative forcing is not reduced after 2030

Sce

narios

Global greenhouse gas emissions by sectorSource: Ritchie, H. (2020). Published in ourworldindata.org with data from Climate Watch and the World Resources Institute.


Energy73.2%

Industry 5.2%

Agriculture, forestry, and

land use 18.4%

Waste 5.2%

Iron and steel7.2%

Others24.9% Commercial

6.6%

Residential10.9%

Land transportation

11.9%

Chemicals and petrochemicals

3.6%

Source: IPCC. (2019). Special Report: Global Warming of 1.5°C.

The power of green hydrogen


An industrial gas used widely formore than a century, elementalhydrogen (H2) can be produced todayfrom water with increasing scale andefficiency. In green hydrogenproduction, water can be separatedinto its constituents, hydrogen andoxygen, using renewable power.

Historically, it has been producedfrom fossil fuels in processesthat emit greenhouse gases. Ithas mostly been used inchemical industries and for therefining processes of crude oil.

It is a means for using the

inexhaustible renewable energy found in various

forms on the planet.

Grey hydrogen

CO2

Fossil fuels H2

Green hydrogen

O2Water

Renewable power

H2

Decarbonization potential of green hydrogenSource: Adapted from Siemens, Power-to-X.

Renewable power

Residential and

Industrial Heating and

cooling

Transportation

Green hydrogen

Electrolysis

Turbines, engines, fuel cells

Fuel cells,dual combustion

Boilers and gas

grids

Petrochemical industry

Green synthetic fuels

Substitute for grey hydrogen

Chemical industry

Agriculture

Ammonia and green fertilizers

Steel

Other industries

Substitute for coke

Substitute for grey hydrogen

It functions as an energy vector that

emits no greenhouse gases when used.

It can replace the use of fuels in the

production of electricity, heat, and multiple materials.

The time for hydrogen has arrivedAfter several decades of waiting for the potential of hydrogen asan energy carrier, this element is now ready to assume a leadingrole in the global energy and economic transition.

Global energy demand supplied with hydrogen (PWh)Source: Hydrogen Council. (2017). Hydrogen: Scaling up.

2015 2020 2030 2040 2050

23

4

8

3

3

5

3

6

3Power generation and storage

Transportation

Heating and residential uses

Industry

New uses

Existing uses

Hydrogen Council, 2017.

Final energy demand

18%Total hydrogen market

2.5TUSD

Strategy& (PwC), 2020.

Export market

300BUSDElectrolyzercost reduction

80%

By 2050, the world’s economies and energy systems will lookgreener. The projected reduction in renewable energy andelectrolyzer costs, as well as the need for deeper decarbonizationof all economic sectors, will drive the emergence of a globalmarket for green hydrogen and its derivatives.


National strategy available

National strategy under preparation

Pilot and demonstrative project support

Preliminary discussions

No relevant activities

Not evaluated

22

Countries representing almost 90% of global GDP have policies or initiatives for public support of hydrogenSource: LBST. (2020). International Hydrogen Strategies. Prepared for WEC Germany.

An opportunity for Chile

2Clean energy for a

global transition

Punta Sierra wind power plant, Coquimbo Region

The most powerful solar radiation on the planet is found in Chile’s North.Capacity factors of 35% can be achieved in monofacial solar photovoltaic plants with 1-axis tracking.

Solar generation in the central part of Chile is already more competitive than fossil-powered electricity generation.This renewable potential is located close to large consumption centers, gas grids, and logistical hubs, such as ports and distribution centers.

Winds in the far South end of the country blow with the same power on land as off-shore.120-meter-high wind turbines are able to achieve capacity factors of over 60% on-shore, equivalent to off-shore performance in other countries.

Source: McKinsey & Company.


Levelized cost of renewable electricity(USD/MWh)

Center(Solar photovoltaic,

Metropolitan Region)

North(Solar photovoltaic,

Antofagasta Region)

South(On-shore wind,

Magallanes Region)

The solar and wind power sectors are quickly maturing.In the past 6 years, Chile has increased the generationcapacity from these sources five-fold and, by 2030,70% of the power grid is expected to be renewable.The increasing investment in these energies, as well asin energy storage and transmission infrastructure, is aclear indicator of a decisive transition to a moresustainable power system.

509GW

of renewable energy potentialamounts to 70 times current installed capacity

1.800+ GW

1180GW

191GW

6GW

+ ++

A country rich in the energies of the future 40

5

0

10

15

20

25

30

35

352020 25 30 40 45 2050

Concentrated solar power

Solar photovoltaic

On-shore wind

Run of river hydro

The cheapest green hydrogen on the planet

Levelized cost of green hydrogen(USD/kg H2)

Potential for a 160 Mton yearly green hydrogen production*

Reductions in electrolyzer and renewable power costs will lead to highly competitive green hydrogen production for domestic use and export.The increasing availability of green financing, strong corporatecommitments to decarbonization, and the existing tax benefits forremote regions are additional factors that will contribute to thecompetitiveness of business models based on this clean fuel in Chile.

Green hydrogen produced in the Atacama Desert and in the Magallanes Region will achieve the lowest levelized cost of production* on the planet by 2030.The quality and abundance of the renewable resources found in these regions will enable a large-scale competitive production.

*Does not consider compression, transport, and distribution costs, which vary according to the end-use of hydrogen.

1.4

Middle East

Chile USAAus-

traliaEU

1.8 1.7

2.2

2.6

2.1

ChinaSource: McKinsey & Company.


Center

NorthSouth

1.0

0

0.5

2.0

1.5

2.5

30 45352020 4025 2050

*Source: International Energy Agency.


1.11.21.3

1.5

1.8

2.6

2.0

1.7

1.4

1.31.2

1.1 1.11.0

1.1

0.91.0

0.8

1.3

3,0

A unique opportunity:A new, clean industry as large as the Chilean mining sector


Projection of Chilean markets for green hydrogen and its derivatives(BUSD)

3

1116 19

245

78

9

215

16

2328

33CAGR+15%

Associated renewable capacity(GW)

20452025 2030 2035 2040 2050

5-8 40 145 200 300250


The competitiveness of Chile in renewable energy production and the global need for clean energy carriers will open the door to the creation of an economic sector that could rival the size of the Chilean mining sector.If timely and effective action is taken,the use of green hydrogen in domesticapplications will generate an industryprepared to compete in internationalexport markets. Investment in greenhydrogen will lead to significantnational capabilities and to the creationof dynamic economic ecosystemsthroughout the country.

Domestic applications

Exports

Cumulative necessary investment (BUSD)

8 45 150 220 330270

Included: renewable generation plants, electrolysis plants, trassmition infrastructure, compress installation, gas pipeline, liquefaction plants, fuel recharge station. ..

Projected development of green hydrogen applicationsUncertainty level, market size, and estimated year of breakeven for some applications of hydrogen in Chile. Does not consider carbon price. List of applications not exhaustive.

*: Includes green methanol and synthetic fuel exports.

2023 2028 2033Estimated break-even year

Unce

rtai

nty

lev

el in

tec

hnolo

gica

l dev

elopm

ent

Hig

hLow

Domestic International

The first wave will include domestic usage withexisting large energy or hydrogen demand.The shorter-term opportunities are replacingimported ammonia for local production, andreplacing grey hydrogen used in oil refineries. Theuse of green hydrogen for heavy and long-distancetransportation also becomes attractive for fleetsand machinery operating in concentrated zones.

The start of export activities and extended localuses will be seen before the decade is over.A clear opportunity for green ammonia exportsexists in the medium-term, as well as for the firsthydrogen exports. A more competitive productionof green hydrogen will also replace an increasingshare of liquid fuels in land transportation,whereas blending into grids becomes economical.

New export markets open in the long-term,enabling a massive scale-up of production.Fuels derived from green hydrogen will be key todecarbonize the shipping and aviation sectors,both in domestic and international routes. Exportmarkets will continue to grow as other nationstake action to deeply decarbonize their economies.

This opportunity will unveil in 3 distinct waves


Ammonia for domestic shipping

SUV

0,5

5

Mton of equivalent H2

Ammonia

Oil refineries

Heavy-duty trucks

Ammonia exports

Hydrogen exports*

Blending into gas grids

Medium-sized trucks

Mining haul trucks (CAEX)

Long-range buses

Wave 1

Wave 2

Wave 3

Source: Based on analysis by McKinsey & Company.

Mton of equivalent H2

Synfuel and green methanol opportunities increase in 2035+


A new productive identity for ChileChile can tread the path from a country historicallyfocused on exploitation of non-renewable resources toa nation that adds green value to its exports andproduces the clean energy carriers which the worldneeds to abate emissions.

A once-in-a-century opportunityThe renewable energy potential of our country allows for theproduction of green copper, clean energy carriers, and otherexports with low carbon footprint to abate up greenhouse gasemissions around the world. In Chile, up to 25% of carbonemissions could be efficiently mitigated with the use of greenhydrogen by 2050.

We will act in a decisive and effective manner to createan industry that shall be a hub for growth anddevelopment in our countryIf even only a fraction of the full potential for green hydrogen isdeployed in Chile, large amounts of investment will generategrowth and local value in our regions, as well as creating up to100.000 new sophisticated and satisfactory jobs, during the nextfew decades.

Mural in Providencia, Metropolitan Region

Our Strategy

3Ambitions for clean industry

Desert plateau, Antofagasta Region


We will accelerate investment in domestic applications to become a relevant player in export markets

2020 20302025Lay

the foundationsDomestic ramp up

and export preparationLeverage scale

to expand globally

Clean technologies need more than economic breakevenGreen hydrogen requires early and proactive public-private coordination tolower barriers to its development. Chile has experience in this field fromfacilitating the growth of renewable energies and electromobility.

Export ramp-up depends on domestic momentumAn efficient and effective entrance into export markets requires first buildinglocal knowledge, scale, and infrastructure.Starting with a domestic hydrogen ecosystem will increase the share ofcreated value that can be captured by local talent and companies.

A late start would forfeit significant opportunity captureThe global hydrogen market will require long-term, locked in contracts toreduce the large investment risks on supply and demand sides. Chile’scompetitors are already moving to lock in these contracts with futureimporters.Establishing reliable long-term relations and contracts with importingcountries, parallel to the growth of a local industry, will allow Chile to capture asignificant share of the global markets for green hydrogen and its derivatives.

Port of San Antonio, Valparaíso Region

Wave I: 2020-2025Domestic ramp up and export preparation


1. Annual sales. Considers the full transition to hydrogen of the energy demand in each application.Source: Based in analyses from McKinsey & Company.

Oil refineries

Ammonia

Mining haul trucks (CAEX)

Heavy-duty trucking

Long-range buses

Blending into gas grids (up to 20%)

Application

1

2

3

4

5

6

Total potential market1

(BUSD by 2050)2025 2030 2035 2040

2.0

Potential adoption curve to achieve 100%.

Targeted breakeven through action and start of piloting.

Estimated breakeven without additional action.

We will accelerate the deployment of green hydrogen in 6 prioritized applications to build local supply chains and acquire experience.Public action will kickstart thelocal hydrogen industry byincentivizing production andcreate a tangible demand forthis clean element and itsderivatives. Uses with theearliest economic breakevenand largest concentrateddemand will be targeted first.These actions will generateknow-how, develop talent,deploy infrastructure, andattract financing. In doing so,the country will be betterpositioned to tap into exportmarkets.

0.8

1.6

0.5

0.2

0.3

Waves II & III: 2025-2030 & 2030 onwardsCapitalizing on export markets and leveraging scale to expand



Estimated market size for Chilean exports(BUSD)

Europe USAJapan/KoreaChina LATAM

20402025 20352030 2045 2050

20402025 20352030 2045 2050

Green ammonia exports

1

Green hydrogen exports

2

0.4 2.5 11 16 19 24Total size

0.4 2 4 5 5 5

0 0.5

7

1114

19

Wave II: We will leverage our domestic base to scale into a key player in export markets.An industry of green ammoniaproduction and exportation will be putin place through support for GW-scaleconsortiums. Offtake and investmentcommitments for ammonia andhydrogen exports will be secured.

Wave III: We will exploit synergies and economies of scale to expand as a global supplier of clean fuels.As countries take action todecarbonize their economies and newtechnologies are developed, the exportmarkets for clean fuels will scale anddiversify, opening opportunities forfurther growth. Future applications forammonia in shipping and synfuels inaviation are promising opportunitiesfor additional scale-up.


Our ambition

2.5BUSD/year

25GW

<1.5USD/kg

Topdestination for green hydrogen investment in

LATAMElectrolysis

capacity operating and under

development

Production in at least 2 hydrogen valleys in Chile

5BUSD

100kton/year

5GW

The cheapest green hydrogen on the planet

Leaders in export of

green hydrogen and

derivatives

Leaders in production of

green hydrogen via electrolysis

Pillars

4Propping up our actions

Torres del Paine, Magallanes Region

Openness to the world

Efficient pathway to a net-zero country

New economy based on clean exports

Mission-oriented policy

Balanced use of resources and land

Green hydrogen as a catalyst for local growth

These pillars provide a framework for private and public action to deploy impactful efforts for the

development of green hydrogen in Chile.

Pillarsfor our action


Mission-oriented policyThe State shall be a promoter of themultisectoral mission to establish a new worldclass industry, with the coordination of theprivate sector.

The public sector will play a central role inidentifying and lowering barriers, as well asreducing regulatory, financial, and technicaluncertainties to achieve the intended long-termobjectives. Private initiatives and capabilities fromcompanies, academia, and associations, shall buildupon these fundamentals to become leadingactors in the development of the technologies,businesses, investments, and projects required toscale up efficient and competitive domestic andexport markets. This public-private coordinationwill enable clean, intelligent, and inclusive growthin our country.

Balanced use ofresources and landGreen hydrogen industrial development shall becoherent with its socioenvironmental context,incorporating best practices and dialogue.

Chilean institutions will safeguard the safety of thepublic and our environment, as well as establish adialogue with local communities. Respect andcoherence with territorial planning instrumentswill also contribute towards a fair energy andeconomic transition. Institutions shall strive toachieve an industrial growth that improves theliving standard of citizens; overseeing theresponsible use of water resources and promotingconcepts of circular economy, promoting the usedof desalinated water in the water shortageteritories and promoting the circular economyconcepts.

New economy based on clean exportsGreen hydrogen clears the way for a newChilean export economy based on clean energycarriers and products of low carbon footprint.

To achieve the decarbonization of the globaleconomy, the world requires green minerals, food,raw materials, and manufactured goods. Chile willexcel in fulfilling these needs with a clean andcompetitive export sector based both on greenhydrogen and its derivatives, as well as on theproduction of low carbon goods. Also, allthe tecnology and kwnolege hain during theinsdustry development will be a exportation ofproduct and service itslef , Chile will become a netexporter of energy to the world.


Proactive State: Drive and coordinate jointaction by various sectors, providing clear signalsto private initiatives, as well as promoting localvalue creation and capture.

Quality of life: This industry shall be developedin harmony with its environment, paying specialattention to a responsible use of water jointlywith neighboring communities and activities.

Exporting vocation: Chile remains committed toan open economy. In the future, it will supplyclean products to a global energy transition, fromgreen minerals to carbon-neutral synthetic fuels.

Efficient pathway to a net-zero countryOur country is committed to a transitiontowards a net-zero economy, in which greenhydrogen will play a fundamental role.

An efficient transition from fossil fuels to cleanenergy systems requires the use of greenhydrogen and its derivatives, such as methanol,ammonia, and synthetic fuels, in sectors such asmaritime, air, and land transportation, mining,industry, and power. Efforts in Chile will befocused on integrating green hydrogen and itsderivatives in applications in which these abateemissions in an efficient manner. Other solutionswill be needed to abate sectors and applicationsin which hydrogen use is not cost-effective orfeasible.

Green hydrogen as a catalyst for local growthThe industry and projects created around thisclean fuel will generate local hubs forinvestment, innovation, and economic activity.

Public and private stakeholders are collaboratingclosely to develop green hydrogen in Chile. TheState shall continue to promote investment andinnovation that effectively produces local value inthe communities and regions where hydrogen isdeveloped. Initiatives that create opportunities fornational employment and capability developmentwill be encouraged, while safeguarding the needs,desires, and strengths of each territory. Likewise,the State shall explore and promote applicationsfor green hydrogen that produce relevant local co-benefits.

Entorno partícipe: Los proyectos y lasaplicaciones se integrarán armónicamente alos territorios, privilegiando la creación devalor local.

Openness to the world Only through international collaboration will theglobal green hydrogen economy be developed atthe speed that climate action requires.

Our transparency, solid institutional framework,non-discriminatory investment rules, andtransparent openness to trade have allowed forinternationally competitive and dynamic economicsectors to develop in Chile. These samecharacteristics make it an attractive destinationfor investing in clean technologies and will berequired to enable a rapid scale-up of the greenhydrogen industry. Its first stages shall beaccelerated by a new paradigm of cooperation andcompetition, vision denominated as “coopetition”,in which exporting and importing countries willshare experiences and technologies.

Un buen socio: Chile colaborará ampliamente,incluso con futuros competidores, para escalarel mercado global del hidrógeno


Complementarity: Green hydrogen will enable anet-zero economy alongside other solutions.Competitive energy efficiency shall be prioritizedwhenever it is feasible.

Participatory environment: Projects andapplications will be harmonically integrated intoour country, giving preference to the creation oflocal value and growth.

A good partner: Chile will collaborate widelywith public and private international stakeholdersto scale up global green hydrogen markets.

Action plan

5Committed, together

Coast in Viña del Mar, Valparaíso Region

Green hydrogen is still at an early stage in ourcountry. Pilots and demonstrative projects arestill under development, and challenges to thescale-up of production and use in variousapplications persist. The key perceived barriersto accelerated development are asymmetries ofinformation, lack of coordination betweensupply and demand sides, technological andfinancial risks, as well as cost gaps in relationto fossil-powered solutions. Initiatives thatsupport and increase the competitiveness ofearly green hydrogen projects will kick-start awell-functioning market, will reduceuncertainties for investors and developers, andwill unlock economies of scale and economiesof scope.

Launch of a funding round of up to 50 MUSD to support green hydrogen projects Early and efficient green hydrogen projects focused along the whole value chain will be supported with financial assistance to help close economic gaps. Selected projects will help to achieve the target of 1.5 USD/kgH2 by 2030. This will aid a functioning market and the growth of local industry. The funding round will support companies and national and international consortiums to invest in scalable and replicable green hydrogen projects in Chile.

Establishment of a public-private roundtable, to discuss the path towards a carbon price and taxes that better reflect the externalities of fossil fuels used in Chile.A roadmap towards adequate mechanisms, prices, timings, and graduality regardingthe internalization of social costs incurred when using fossil fuels will be constructedthrough dialogue between key and varied stakeholders. Proper pricing of emissionsoriginating from hydrocarbon use will level the field for competition betweenconventional fuels and new energy carriers. Recent international studies andrecommendations shall be strongly considered, such as those by the IMF and theOECD, to achieve the goals of the Paris Agreement.

Chile will deploy a green hydrogen diplomacy to position itself internationally as a source of clean fuels and energy carriers.The strong and wide-reaching network of commercial and technical agreements thatChile is a part of will be leveraged to mobilize human and material resources thataccelerate the development of green hydrogen in the country. Internationalplatforms and diplomatic relations with 171 States will be key to unlocking thepotential for green hydrogen locally and globally, with focus in the financing, tecnicexpirience and standars´s harmonization.

Promotion of domestic

and export markets


Welder in La Pintana, Metropolitan Region


Regulation is a cornerstone upon which allindustries are built upon. Early definitionsregarding standards and oversight activities willsafeguard the safety of operators, users, thepublic, the environment, goods, andinfrastructure, as well as accelerate the scale-upof production, storage, handling, and usage ofgreen hydrogen and its derivatives. Clear andstable regulation also delivers certainty todevelopers and investors so projects andapplications can be implemented with reducedrisk. Regulatory mechanisms that allow for pilotprojects and for dedicated authorizations forprojects whose regulation is still not available,are also necessary.

Bridging of regulatory and standards gaps throughout the hydrogen value chain to ensure safety and give certainty to investors.A regulatory development plan, coordinated throughout all public services that holdregulatory authority over the hydrogen value chain, will be executed to establish thestandards required by industry. The result of this action will be more agile and saferdevelopment of domestic applications and export industry. Regulation will bedeveloped in coordination with the private sector, promoting internationalstandardization and harmonization.

Establishment of a task force to accompany developers in permitting and piloting processes for green hydrogen projects and derivatives.Coordinated of public services through an agile framework to enable smooth pilotingand development of hydrogen projects and new applications, especially in themining, transportation, and energy sectors. These actions will reduce uncertainty forprivate initiatives, generate learning, solve market coordination failures, and insure asafe introduction of new fuels and processes.

Review of natural gas regulation and infrastructure to promote the introduction of green hydrogen quotas.The physical capability of existing natural gas infrastructure to safely incorporateblending of hydrogen will be studied. International experience will also be consideredwhen discussing a gradual mechanism for green hydrogen and green hydrogenderivated quotas in gas grids. Such a regulatory mechanism would create a stableand large-scale demand for domestic production of this clean fuel, would furtherutilize existing infrastructure, and would complement natural gas in the energytransition to a sustainable energy system.

Standards, safety,

and piloting

Chuquicamata copper mine, Antofagasta Region


Social and local

development

Sustainable development of this new industrywill take into consideration developmentthroughout the country. The interests, activities,groups, collective visions, needs, and strengthspresent in each region shall be considered whendeveloping projects. If this transversaldevelopment is achieved, then the greenhydrogen potential of Chile will truly enableorganic and decentralized growth. Early andtransparent dialogue between the variousstakeholders in each initiative is a condition forsuccess in this regard, in addition to theexploration of the multiple existing alternativesfor value sharing between private initiative andlocal communities. Further, studying newpotential uses for green hydrogen to reducepollution and generate synergies in variousregions could lead to a more efficient andcoherent development of new infrastructure andlocal policies.

We will ensure early and continuous participation of near by communities, incorporating gender equality and human rights-based approaches.Dialogue between hydrogen project developers and neighboring communities willbe articulated by the State, ensuring robust communication and capacity building.Agreements and mechanisms between the stakeholders may be brokered in orderto promote the generation of local supply chains, capabilities, and best practicesregarding territorial and communal interests.

Exploration of green hydrogen uses to replace or complement fossil fuel-based generation in isolated electric systems.Green hydrogen may be a key mechanism to facilitate higher integration of renewable energy into power grids that are isolated from the National Electricity System. An evaluation of this potential will be carried out, as well as the identification of specific barriers to green hydrogen deployment in these systems, including potential regulatory and market barriers to their integration into planning and expansion processes of medium-sized systems.

Assessment of opportunities and challenges offered by green hydrogen to territorial plans, policies, and distribution.Policies and plans that determine the potential land uses in various regions havenot usually considered the alternative of green hydrogen deployment. Theseinstruments will be re-assessed in light of the new possibilities that green hydrogenunlocks, in order to facilitate a coherent and rational integration of these activitiesin our regions and their use of land and natural resources. Potential synergies andchallenges with other human activities and requirements, such as use of waterresources, shall be specifically considered.San Pedro de Atacama, Antofagasta Region


Capacity building and

innovation

ESO Telescope in Cerro Paranal, Atacama Region

Local technicians and specialists with adequateknowledge and skills will consolidate a nationalhydrogen ecosystem. Strong local capacities willgive way to new businesses, technicalinnovations, and productive employment. TheState, in its strategic role, will promoteeducational, research, development, andinnovation activities associated to greenhydrogen. Special emphasis will be given toapplications of national interest that contributeto the objectives laid out in this Strategy.Navigating the learning and development curvesof this new sector will generate new knowledgethat can spur unique local competitiveadvantages. A sophistication of the local supplyside of goods and services will ensue, as well asthe opportunity for exporting know-how and newtechniques from Chile to the rest of the world.

Industry, academia, and technical centers will work together to identify gaps and prepare national capabilities to supply a new, burgeoning industry.Competencies and technical skills required along the value chain of greenhydrogen will be identified jointly by public and private stakeholders. A coordinatedpreparation of those capabilities by national educational institutions will bearticulated. A timely preparation in this regard will improve the projections fora sophisticated, satisfactory, good quality and gender-equitable employment.

An R&D roadmap to solve local implementation challenges will be constructed by the public and private sectors.A roadmap with milestones, pilots, and necessary activities to develop newrequired knowledge for an accelerated deployment of green hydrogen will beelaborated. This work shall include collaboration with the awardee of the CleanTechnologies Institute –innovation platform with public funding of up to 193 MUSD–. Such a planning effort will tend to the demands originating in the growth of adynamic, challenging, and technologically advanced sector.

A work group with public companies will be created to accelerate the adoption of green hydrogen in their activities and in their supply chain.Conditions and actions necessary to efficiently incorporate green hydrogen in theprocesses and activities of public companies will be determined, in order topromote a cost-effective emissions reduction. The competitivity and capabilities ofState-owned enterprises, such as ENAP and Codelco, shall be strengthenedthrough this action, in a world that demands an increasing share of clean productsand energy carriers.


Promotion of domestic and export marketsSet 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.

Promote studies and coordination initiatives jointly with countries that declare themselves as net hydrogen importers to promote commercial initiatives for export-import.

Exchange experiences and formulate collaborative initiatives to bolster the deployment of green hydrogen production and use in Chile through bilateral and multilateral agreements.

Study and promote the establishment of international certification systems for carbon footprint and guarantees of origin of green hydrogen.

Explore the impact of tax mechanisms in promoting the investment of green hydrogen projects.

Enable and promote the access to international and local financing with multilateral private and public actors of early projects.

Standards, safety, and pilotingModify Law DFL 1 from 1979 and Law DL 2.224 to define hydrogen as an energy carrier and, thus, allow for by-laws to be emitted to regulate safety issues along its value chain.

Communicate about the request process for dedicated authorizations from the Superintendency for Electricity and Fuels, as well as communicate procedures and conditions to carry out piloting in various applications.

Review and update power market regulation to effectively allow the participation of hydrogen technologies in the provision of various services, including energy, capacity, and ancillary services.

Capacity building and innovationPrepare diverse groups of public servants, such as regulators, evaluators, overseers, and others, on the implications of green hydrogen development on their fields of action.

Elaborate a plan to prepare emergency response teams, including firefighters, paramedics, and others.

Horizontally communicate through industry and academia the results and lessons learned in publicly funded R&D initiatives, such as technological development consortiums.

Identify and connect stakeholders that develop research and development activities to promote collaborative innovation on solutions that address local challenges prioritized for the country.

Social and local developmentCommunicate knowledge of green hydrogen to the general public with a focus on environmental and safety opportunities and challenges to generate increasing trust in its use.

Analyze and promote reconversion and/or reutilization of infrastructure of coal power plants for the production and utilization of green hydrogen.

Review land use regulations applicable to the green hydrogen value chain and review associated permitting processes to identify and reduce potential barriers to its development.

Study key infrastructure needs associated with each region to identify opportunities for local development.


Nahuelbuta National Park, Araucanía Region

Governance

2021 2023 2026 2028 +

The frequent update of the Strategy and its Action Plan will allow to adequate the public politic to the market, technology and challenges evolution.

The National Council of Green Hydrogen willbe responsible for:• The approval of the validation and update of the

assumptions proposed by the Minister of Energy.• The approval of the update of the Strategy proposed by

the Minister of Energy.

The National Council of Green Hydrogen will include theparticipation of the Minister of Energy, who will be thecouncil's president; Minister of Science, Technology andInnovation; Minister of Economy; Minister of Environment;Minister of Mining; Minister of Transportationand Telecommunications; Minister of National Goods, andMinister of International Relations. The council willcount with private representatives, designate every 2years by the Council's president: 2 representatives of theindustry, 2 representatives of the academy and 2representatives of the academy.

The Ministry of Energy, through the Fueland New Energy Carriers Division, will beresponsible for:

• The coordination of the implementation of theaction plan with relevant stakeholders: LocalAuthorities, Civil Organization, Firms andIndustries, and the Academy.

• The proposition of a validation and update ofthe strategy's assumptions every 2 years and 6months.

• The proposition of an update of the Strategyevery 5 years

Validation and Update of assumptions

Strategy Update

National Green HydrogenStrategy

Documents

NATIONAL GREEN HYDROGEN