April 23, 2024
Green Hydrogen

Chile Seeks European Investors for Green Hydrogen Projects

Chile is actively seeking European investors for its solar, wind, and green hydrogen initiatives as it aims to decarbonize industries that heavily rely on fossil fuels, including copper mines. Marcos Kulka, CEO of H2Chile, a hydrogen association comprising 102 public and private companies, traveled to Europe to discuss Chile’s energy strategy during the renegotiation of an EU-Chile trade and investment agreement.

Kulka stated that Chile has the necessary resources to achieve carbon neutrality by 2040, which is 10 years ahead of the global net-zero target set by the Paris Agreement. He also emphasized that 24% of Chile’s emissions reduction will come from hydrogen and its derivatives.

Hydrogen is considered a promising solution for high-polluting industries such as steel, metals, cement, and chemicals, as well as shipping and transportation, as it only emits water vapor when consumed. However, the production of hydrogen on a large scale remains a significant challenge due to high costs and inadequate infrastructure.

Green hydrogen is produced by using renewable energy-generated electricity to split water molecules, making it a clean fuel. Another method of hydrogen production is blue hydrogen, which uses natural gas but requires carbon capture equipment to be considered environmentally friendly.

According to the International Energy Agency, only 7% of the announced renewable hydrogen projects worldwide are expected to be operational by 2030. Nonetheless, Kulka believes that Chile has the potential to become one of the world’s cheapest hydrogen producers.

To reduce the carbon footprint of its copper mining operations, Chile plans to replace coal-fired plants with renewable energy sources by 2040. The country has abundant solar power in the north and wind power in the south, both of which can be harnessed to produce green hydrogen.

Chile estimates that it will require $60 billion in investments by 2050 to realize its green hydrogen plans. Several companies, including Austria Energy, Engie, TotalEnergies, EDF, and various German, Dutch, and Norwegian firms, have expressed interest in importing green hydrogen from Chile due to the country’s low-cost renewable energy.

Currently, Chile’s installed green hydrogen capacity is only two megawatts, with a target of reaching 25 gigawatts by 2030, according to Kulka. The global installed capacity for green hydrogen is currently at 1.1 gigawatts, as reported by the Hydrogen Council.

Christian Sagal, a Chilean diplomat and investment commissioner in France, echoed concerns from climate activists that hydrogen alone is not sufficient for the energy transition. He cautioned against relying solely on green hydrogen to prevent climate disasters, such as the recent fires that claimed the lives of over 130 people in Chile.

Chile’s green hydrogen plan is just one of the strategies being pursued to decarbonize the country’s economy and contribute to global emissions reduction, Sagal added.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it