NATIONAL

GREEN HYDROGENSTRATEGY

Chile, a clean energy provider for a carbon neutral planet

National Green Hydrogen Strategy
Published by the Ministry of Energy, Government of Chile
Alameda 1449, Santiago Downtown Tower II, 13th Floor
Santiago, Chile
November, 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 early
work 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 German
agency GIZ, as well as all the public institutions, private companies, civil
associations, and individual collaborators that contributed to the development of
this public policy.
Editors:
Max Correa A. – Carlos Barría Q. – Benjamín Maluenda P.
Design: Patricia Escobar A.
Images: Unsplash
Cover: 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 de
Vasconcellos; Page 25, Eduardo Cabrera; Page 26, Bruna Fiscuk; Page 27, Claudio Rolli; Page 28, Juan
Manuel Núñez Méndez. Image in page 9 by Guy Wenborne – Imagen de Chile. Image in page 29 by
Gnzlndrs.

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 properly
citing its source.

This document is a preliminary version released for a
public consultation process. The definitive version, as well
as all analytical annexes, will be made public once thecomments of the public are collected and considered.
Participate in the public consultation at energía.gob.cl.

Contents
Chapter 1
Time for action

5

Chapter 2
An opportunity for Chile

9

Chapter 3
Our strategy

15

Chapter 4
Pillars

20

Chapter 5
Action plan24

Hydrogen, the atom composed of just one
proton and one electron, is the most abundant
substance in the universe. It is also the lightest
and one of the smallest elements on the
periodic table. Recently, a lot of attention has
been paid to this diminutive element and its
potential role in combating global climatechange. Specifically, the hype around hydrogenhas centered on its ability to help cut
greenhouse gas emissions in sectors of theeconomy which are hard to abate. Could it bethat the simplest, smallest atom in our
universe might hold the key to confronting
climate change, our largest, most complex
challenge?
Like hydrogen, Chile is small by nature and,accordingly, contributes just 0.3% to global
greenhouse gas emissions. However, we too
have an outsized role to play in turning the tide
on rising emissions and pursuing a low carbon
path to growth and development.

Juan Carlos Jobet E.
Minister of Energy

What we lack in size, we more than make up
for 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 renewableenergy potential to install 70 times theelectricity generation capacity we have today.
This abundant renewable energy will enable us
to become the cheapest producer of greenhydrogen on Earth. Our National Green
Hydrogen Strategy is aimed at turning thispromise into reality.
The Strategy is the result of collaborative work
between industry, academia, civil society andthe public sector, and is an essential piece ofour carbon neutrality plan and commitment tosustainable development. It will allow us to
produce and export products that are createdusing zero carbon fuels, distinguishing ourexports as clean products for end users. It will
also enable us to export our renewable energy
to the world in the form of green liquidhydrogen, green ammonia and clean synthetic
fuels.
Traditionally, Chile lacked fossil fuels and wasforced to import the energy it required. Now,
the coming of age of the tiniest atom will allow
us to drive deep decarbonization in our own
country and throughout the world. This
Strategy is the first step for Chile in embracing
this promise and fulfilling its new potential.

NATIONAL GREEN HYDROGEN STRATEGY| 2

LETTER FROM THE
ADVISORY BOARD“

This National
Green Hydrogen
Strategy marks anessential starting
point for a
profoundtransformation of
the country's
productive
identity.

“

Ricardo
Lagos
Former President of the
Republic

Our country is committed to reducing its
greenhouse gas emissions to help slow
down global climate change, moving
towards sustainable development. It is in
Chile's wealth of clean energies that we
see an engine to decarbonize the country's
activities, diversify its energy matrix andgenerate new industries for local
development. Chile can transition from acountry that grows by extracting nonrenewable resources, to one that
produces the clean and renewable fuelsthat the world requires to avoid climatechange.
Chile has a unique opportunity to develop
a competitive green hydrogen industry
that, from electricity produced with lowcost renewable resources, forms anenergy source for local use andexportation, and promotes a sustainableeconomy around it.
This opportunity can have a great impact
on our country’s brand, adding a green
value to the products created in Chile,
reducingthecarbonfootprintinVivianne
Blanlot
Former Executive Secretary of the
National Energy Commission andFormer Minister of National Defense

MarceloMena
Former Minister of theEnvironment and academictransportation and offering our renewableenergy to those that need it. A concrete
opportunity, for example, would be to
become the world's leading producer ofgreen
copper.
This
presents
theopportunity to generate spaces forinnovation, promote growth and local
employment, as well as create newcompanies with local and global impact.
The great challenge of these coming years
will be to realize these opportunities
through concrete actions. We see that thisNational Green Hydrogen Strategy marks
an essential starting point for a profoundtransformation of the country's productive
identity. But it is also essential, because it
positions Chile as a global leader andgenerates
public-private
coordination
around clear objectives that guide action.
We must promote the use of this energy
within Chile, displacing the consumptionof fossil fuels in the mining, transport andagricultural sectors, in order to offer
products that are low in emissions.

GonzaloMuñoz
High-Level Champion COP25,
cofounder SistemaB andentrepeneur

To this end, clear and transparent
regulatory signals which level the playing
field with dirtier fuels are essential. In
addition, clear signals regarding financial
support, as well as coordination andleadership from the Executive to attract
local and international companies are key.
In close collaboration, we must also
facilitate the development of an exportindustry for hydrogen and its derivatives,
which will allow us to achieve economies
of scale that will make us competitive.
Thus, Chile will become an exporter ofrenewable energy to the world, through its
energy 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 lay
the foundations for what will be a new
industry for Chile, whose success willbring benefits to both the country and theplanet.

Klaus
SchmidtHebbel
Former Chief Economist of
the OECD, academic andconsultant

Jeannette vonWolfersdorffFounder of the Observatory
for Fiscal Spending in Chileand economist

NATIONAL GREEN HYDROGEN STRATEGY | 3

The path to a participatory strategy
Technical roundtables

Citizen workshops

Roundtables 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

Interactive workshops were carried out withrepresentatives from NGOs and citizen
associations.
Local
concerns
andperceptions regarding the role of the State ingreen hydrogen development were raised.
3 sessions in August 2020

Participants: 66 organizations.

Participants: 90 representatives.

Interinstitutional roundtable

Advisory Board

Public Consultation

Discussion roundtables took place between key
public stakeholders to refine a diagnosis, propose
objectives, and construct a common vision for thedevelopment of green hydrogen in Chile.

A board was formed with experienced public
policy and climate action experts to advise the
Ministry of Energy on high-level strategic issues
regarding green hydrogen public policy making.

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.

4 sessions between May and August 2020
Members: Former President Ricardo Lagos,
Vivianne Blanlot, Marcelo Mena, Gonzalo Muñoz,
Klaus Schmidt-Hebbel, Jeannette vonWolfersdorff.

This document iscurrently under public
consultation. To
participate, please visit
the Ministry of Energy’s
website atenergía.gob.cl.

NATIONAL GREEN HYDROGEN STRATEGY | 4

Bolero solar photovoltaic plant, Antofagasta Region

1

Time for action
The simplest molecule to confront
the most complex challenge

Science has warned that the world will experience a climate crisis
without precedent in history, caused by human action, unlesstransformative actions are undertaken on a global scale.

Global warming referenced to 1850-1900 (°C)
Source: IPCC. (2019). Special Report: Global Warming of 1.5°C.

Estimated andprobableanthropogenic
warming

Chile is committed to climate action in a decisive and ambitious
manner. 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 begin
parliamentary discussion on a Climate Change Bill. Fulfilling theseobjectives will require transformative actions in Chile’s society andeconomy.

Energy production and utilization are at thecenter of the challenge we face
The way in which energy is produced and used throughout the world
will change radically. Three quarters of global greenhouse gas
emissions are associated with the energy sector, principally driven by
fossil fuel use. Chile has already set itself on a path to energy
efficiency and electrification using renewable energy. However,complementary solutions are needed to decarbonize economic sectors
and applications in which direct electrification or other solutions are
not cost-efficient, reliable, accessible, or safe.

Global CO2eq emissions reachnet zero in 2055
Global CO2eq emissions reachnet zero in 2040
Non-CO2 radiative forcing is
not reduced after 2030

Scenarios

We are facing a climate crisis

Global greenhouse gas emissions by sector

Source: Ritchie, H. (2020). Published in ourworldindata.org with data from
Climate Watch and the World Resources Institute.

Agriculture,
forestry, andland use

7.2%
Iron and steel

11.9%
Land
transportation

18.4%

Waste

5.2%

Industry

5.2%

24.9%
Others

3.6% Chemicals andpetrochemicals

Energy73.2%

10.9%
Residential
6.6%
Commercial

NATIONAL GREEN HYDROGEN STRATEGY | 6

The power of green hydrogen
An industrial gas used widely formore than a century, elementalhydrogen (H2) can be produced today
from water with increasing scale andefficiency.
In
greenhydrogenproduction, water can be separated
into its constituents, hydrogen andoxygen, using renewable power.

CO2
Fossil fuels

Grey hydrogen

H2

O2
H2

Renewable
power
Water

Green hydrogen
Historically,
it
has
been
produced from fossil fuels inprocesses that emit greenhousegases. It has mostly been used inchemical industries and for therefining processes of crude oil.

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

Heating andcoolingRenewable
power

Turbines,
engines, fuel
cells

Green
hydrogenSubstitute forgrey hydrogen

Electrolysis
Fuel cells,
dual combustion

It is a means forusing theinexhaustible
renewable energy
found in various
forms on the planet.

It functions as anenergy carrier thatemits no greenhousegases when used.

It can replace theuse of fuels in the
production ofelectricity, heat, andmultiple materials.

Boilers
and gasgrids

Substitute forgrey hydrogen

Transportation

Other
industries

Substitutefor coke

Chemicalindustry

Steel

Ammonia andgreen fertilizers

Petrochemica
l industry

Green synthetic fuels

Agriculture

NATIONAL GREEN HYDROGEN STRATEGY | 7

The time for hydrogen has arrived
After several decades of waiting for the potential of hydrogen as
an energy carrier, this element is now ready to assume a leadingrole in the global energy and economic transition.
Countries representing almost 90% of global GDP have policies or
initiatives for public support of hydrogen

22

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

8

Source: LBST. (2020). International Hydrogen Strategies. Prepared for WEC Germany.

2

4

3

3

Power generationand storage

6

Transportation

3

Heating andresidential uses

5

Industry3

New uses

3
2015

2020

2030

2040

Existing uses

2050

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 global
market for green hydrogen and its derivatives.

18%
Final energy
National strategy available

Preliminary discussions

National strategy under preparation

No relevant activities

Pilot and demonstrative project support

Not evaluateddemandHydrogen Council, 2017.

2.5
TUSD
Total hydrogenmarket300BUSD 80%
ExportmarketElectrolyzer
cost reduction

Strategy& (PwC), 2020.

NATIONAL GREEN HYDROGEN STRATEGY | 8

Punta Sierra wind power plant, Coquimbo Region

2

An opportunity
for Chile

Clean energy for a
global transition

A country rich in the energiesof the future

Levelized cost of renewable electricity(USD/MWh)40

Source: McKinsey & Company.

Center35(Solar photovoltaic,
Metropolitan Region)

30

509 +
GW

Concentrated
solar power

1180+
GW

Solar
photovoltaic

191 +
GW

On-shore
wind

6

GW
Run of riverhydro1.800+ GW

South

25

(On-shore wind,
Magallanes Region)

20
15

North

10

(Solar photovoltaic,
Antofagasta Region)

5

0
2020

25

30

35

40

45

2050

of renewable energy potential
amounts to 70 times current installed capacity

The most powerful solar radiation on the planet is found in Chile’s North.

The solar and wind power sectors are quickly maturing.
In the past 6 years, Chile has increased the generation
capacity 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 as
in energy storage and transmission infrastructure, is aclear indicator of a decisive transition to a moresustainable power system.

Solar generation in the central part of Chile is already more competitive
than fossil-powered electricity generation.

Capacity factors of 35% can be achieved in monofacial solar photovoltaic plants
with 1-axis tracking.

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 onland as off-shore.
120-meter-high wind turbines are able to achieve capacity factors of over 60% onshore, equivalent to off-shore performance in other countries.
NATIONAL GREEN HYDROGEN STRATEGY | 10

The cheapest green hydrogen on the planet
Levelized cost of green hydrogen(USD/kg H2)

Reductions in electrolyzer and renewable power
costs will lead to highly competitive greenhydrogen production for domestic use and export.

Source: McKinsey & Company.

2.5

The increasing availability of green financing, strong corporate
commitments 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 inChile.

2.6

2.0

Center

2.0
1.5

North
South

1.8
1.7

1.0

1.4
1.3

1.5
1.3

1.1

1.1
1.0

1.1
0.9

0.8

40

45

2050

0.5

0
2020

25

30

2.6

1.2

35

1.2

1.1

2.2

1.0

Potential for a 160 Mton yearly greenhydrogen production*

1.4

2.1

1.8 1.7

1.3

Chile Middle Aus- China
East tralia

EU

USA

Green hydrogen produced in the Atacama
Desert and in the Magallanes Region willachieve the lowest levelized cost of
production* on the planet by 2030.
The quality and abundance of therenewable resources found in theseregions will enable a large-scalecompetitive production.
*Does not consider compression, transport, and distribution
costs, which vary according to the end-use of hydrogen.

Source: McKinsey & Company.

*Source: International Energy Agency.

NATIONAL GREEN HYDROGEN STRATEGY | 11

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)
Source: McKinsey & Company.

CAGR
+15%

Domestic applications
Exports

16

33
28
23

8

7

5

5

Associatedrenewable
capacity(GW)
Cumulativenecessaryinvestment(MUSD)

11

9

16

19

24

1

2
3

2025

2030

2035

2040

2045

2050

5-8

40

145

200

250

300

8

45

150

220

270

330

The competitiveness of Chilein renewable energy
production and the global
need for clean energy carriers
will open the door to thecreation of an economic
sector that could rival the sizeof the Chilean mining sector.

If timely and effective action is taken,
the use of green hydrogen in domestic
applications will generate an industry
prepared to compete in international
export markets. Investment in greenhydrogen will lead to significant
national capabilities and to the creationof dynamic economic ecosystems
throughout the country.

NATIONAL GREEN HYDROGEN STRATEGY | 12

This opportunity will unveil in 3 distinct waves

The start of export activities and extended local
uses will be seen before the decade is over.
A clear opportunity for green ammonia exports
exists in the medium-term, as well as for the firsthydrogen exports. A more competitive productionof green hydrogen will also replace an increasing
share 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. Export
markets will continue to grow as other nations
take action to deeply decarbonize theireconomies.

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

Source: McKinsey & Company.

Uncertainty level in technological development
Low
High

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

Domestic

Wave 3

Hydrogenexports*

Wave 2
Wave 1

2023

International
Ammonia fordomestic
shipping

Mining haul
trucks (CAEX)

Synfuel andgreen methanol
opportunities
increase in 2035+

SUV
Long-range
buses
Heavy-duty
trucksMedium-sizedtrucksBlending into
gas grids

0,5 Mton ofequivalent H2

Ammonia
Oil refineries

Ammonia
exports

2028
Estimated break-even year

5 Mton ofequivalent H22033*: Includes green methanol andsynthetic fuel exports.
NATIONAL GREEN HYDROGEN STRATEGY | 13

A new productive identity
for Chile
Chile 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 world
needs to abate emissions.
A once-in-a-century opportunity

The renewable energy potential of our country allows for the
production of green copper, clean energy carriers, and otherexports with low carbon footprint to abate up greenhouse gas
emissions around the world. In Chile, up to 25% of carbon
emissions could be efficiently mitigated with the use of greenhydrogen by 2050.

We will act in a decisive and effective manner to create
an industry that shall be a hub for growth anddevelopment in our country
If even only a fraction of the full potential for green hydrogen is
deployed in Chile, large amounts of investment will generate
growth and local value in our regions, as well as creating up to
100.000 new sophisticated and satisfactory jobs, during the next
few decades.

Mural in Providencia, Metropolitan Region
NATIONAL GREEN HYDROGEN STRATEGY | 14

Desert plateau, Antofagasta Region

3

Our Strategy

Ambitions for clean industry

Port of San Antonio, Valparaíso Region

We will accelerate investment indomestic applications to become arelevant player in export markets
Clean technologies need more than economic breakeven
Green 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 momentum
An efficient and effective entrance into export markets requires first building
local 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 capture
The global hydrogen market will require long-term, locked in contracts to
reduce the large investment risks on supply and demand sides. Chile’s
competitors are already moving to lock in these contracts with future
importers.
Establishing reliable long-term relations and contracts with importing
countries, 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.

2020

Lay
the foundations

2025
Domestic ramp up
and export preparation

2030
Leverage scale
to expand globally

NATIONAL GREEN HYDROGEN STRATEGY | 16

Wave I: 2020-2025
Domestic ramp up and export preparation
We will accelerate thedeployment of greenhydrogen in 6 prioritized
applications to build
local supply chains andacquire experience.
Public action will kickstart the
local hydrogen industry by
incentivizing production andcreate a tangible demand forthis clean element and its
derivatives. Uses with theearliest economic breakeven
andlargestconcentrated
demand will be targeted first.
These actions will generateknow-how, develop talent,
deploy infrastructure, andattract financing. In doing so,
the country will be better
positioned to tap into export
markets.

Application
1

Oil refineries

2Ammonia

3

Mining haul trucks(CAEX)

4

Heavy-duty trucking

5Long-range buses

6

Blending into gas
grids (up to 20%)

Total potential
market1(BUSD by 2050)

2025

2030

2035

2040

0.2
0.5
1.6
2.0
0.8
0.3
Targeted breakeven throughaction and start of piloting.

Estimated breakeven
without additional action.

Potential adoption curveto achieve 100%.

1. Annual sales. Considers the full transition to hydrogen of the energy demand in each application.

Source: Based in analyses from McKinsey & Company.

NATIONAL GREEN HYDROGEN STRATEGY | 17

Waves II & III: 2025-2030 & 2030 onwards
Capitalizing on export markets and leveraging scale to expand
Wave II: We will leverage ourdomestic base to scale into a
key player in export markets.
An industry of green ammonia
production and exportation will be put
in place through support for GW-scaleconsortiums. Offtake and investmentcommitments for ammonia andhydrogen exports will be secured.

Wave III: We will exploit
synergies and economies ofscale to expand as a global
supplier of clean fuels.

Ascountries
takeactiontodecarbonize their economies and newtechnologies are developed, theexport markets for clean fuels will
scale
and
diversify,
opening
opportunities for further growth.
Future applications for ammonia inshipping and synfuels in aviation arepromising opportunities for additional
scale-up.

Estimated market size for Chilean exports(BUSD)
EuropeSource: McKinsey & Company.

Total size

1

0.4

Green ammonia
exports

2.5

China

11
4

Japan/Korea

USA

LATAM

16

19

24

5

5

5

2040

2045

2050

2

0.4
2025

2030

2035

19
14
11

2 Green hydrogen
exports

7

0

0.5

2025

2030

2035

2040

2045

2050

NATIONAL GREEN HYDROGEN STRATEGY | 18

Our ambition

5

BUSD

5

GW

200

kton/year

Top
Production in at
destination forleast 2green hydrogenhydrogeninvestment invalleys in Chile
Electrolysis
LATAM
capacity operating

Leaders inexport ofgreenhydrogen andderivatives

2.5

BUSD/year

The cheapest
green hydrogenon the planet<1.5

USD/kgLeaders in
production ofgreenhydrogen via
electrolysis

25
GW

and under
development

NATIONAL GREEN HYDROGEN STRATEGY | 19

4
Pillars

Propping up our actions

Torres del Paine, Magallanes Region

Mission-oriented
policyBalanced use ofresources and land

New economy based onclean exports

Efficient pathway to a
net-zero country

Pillarsfor our action
These pillars provide a frameworkfor private and public action to
deploy impactful efforts for thedevelopment of green hydrogen in
Chile.

Green hydrogen as acatalyst for local
growthOpenness to theworld

NATIONAL GREEN HYDROGEN STRATEGY | 21

Mission-oriented
policyBalanced use ofresources and land

New economy based onclean exports

The State shall be a facilitator, coordinator, andpromoter of the mission to establish a new
industry through multisectoral efforts.

Green hydrogen industrial development shall becoherent with its socioenvironmental context,
incorporating best practices and dialogue.

Green hydrogen clears the way for a new
Chilean export economy based on clean energy
carriers and products of low carbon footprint.

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

Chilean institutions will safeguard the safety ofthe public and our environment, as well as
establish a dialogue with local communities.
Respect and coherence with territorial planning
instruments will also contribute towards a fairenergy and economic transition. Institutions shallstrive to achieve an industrial growth that
improves the living standard of citizens;
overseeing the responsible use of water resources
and promoting concepts of circular economy.

To achieve the decarbonization of the global
economy, the world requires green minerals, food,
raw materials, and manufactured goods. Chile will
excel in fulfilling these needs with a clean andcompetitive export sector based both on greenhydrogen and its derivatives, as well as on the
production of low carbon goods. Just as over a
century ago Chilean saltpeter was at the core of
the world’s food supply, today its green ammonia
will enable low carbon fertilizer production for amodern agriculture. And, for the first time in its
history, Chile will become a net exporter of energy
to the world.

Proactive State: Drive and coordinate joint
action by various sectors, providing clear signals
to private initiatives, as well as promoting local
value creation and capture.

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

Exporting vocation: Chile remains committed toan open economy. In the future, it will supply
clean products to a global energy transition,from green minerals to carbon-neutral synthetic
fuels.
NATIONAL GREEN HYDROGEN STRATEGY | 22

Efficient pathway to a netzero country

Green hydrogen as acatalyst for local growthOpenness to theworld

Our country is committed to a transition
towards a net-zero economy, in which greenhydrogen will play a fundamental role.

The industry and projects created around thisclean fuel will generate local hubs forinvestment, innovation, and economic activity.

Only through international collaboration will the
global green hydrogen economy be developed at
the speed that climate action requires.

An efficient transition from fossil fuels to clean
energy systems requires the use of greenhydrogen and its derivatives, such as methanol,ammonia, and synthetic fuels, in sectors such as
maritime, air, and land transportation, mining,industry, and power. Efforts in Chile will befocused on integrating green hydrogen and its
derivatives in applications in which these abate
emissions in an efficient manner. Other solutions
will be needed to abate sectors and applications
in which hydrogen use is not cost-effective or
feasible.

Public and private stakeholders are collaboratingclosely to develop green hydrogen in Chile. The
State 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 development
will be encouraged, while safeguarding the needs,
desires, and strengths of each territory. Likewise,
the State shall explore and promote applications
for green hydrogen that produce relevant local cobenefits.

Our transparency, solid institutional framework,
non-discriminatory
investment
rules,
andtransparent openness to trade have allowed forinternationally competitive and dynamic economic
sectors to develop in Chile. These samecharacteristics make it an attractive destination
for investing in clean technologies and will be
required to enable a rapid scale-up of the greenhydrogen industry. Its first stages shall be
accelerated by a new paradigm of cooperation
andcompetition,
visiondenominatedas“coopetition”, in which exporting and importing
countries will share experiences and technologies.

Complementarity: Green hydrogen will enable a
net-zero economy alongside other solutions.
Competitive energy efficiency shall be prioritized
whenever it is feasible.

Entorno partícipe:
Los proyectos
lasParticipatoryenvironment:
Projects y andaplicaciones
seintegrarán
armónicamenteaapplications will be harmonically integrated intolosterritorios,
privilegiandolacreacióndeour country, giving preference to the creation ofvalor value
local.and growth.
local

Un goodbuen partner:
socio: Chile
colaborará
ampliamente,A
Chilewill collaborate
widelyinclusocon
futuros
competidores,paraescalarwith public and private international stakeholders
elglobalgreen
del hidrógeno
to mercado
scale up globalhydrogen markets.

NATIONAL GREEN HYDROGEN STRATEGY | 23

Coast in Viña del Mar, Valparaíso Region

5

Action plan
Committed, together

Promotion of domestic

Launch of a funding round of up to 50 MUSD to support greenhydrogen projects

and export markets

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 afunctioning market and the growth of local industry. The funding round will support
companies and national and international consortiums to invest in scalable andreplicable green hydrogen projects in Chile.

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 various
applications persist. The key perceived barriers
to accelerated development are asymmetries of
information, lack of coordination between
supply and demand sides, technological andfinancial risks, as well as cost gaps in relation
to fossil-powered solutions. Initiatives that
support 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 economies
of scope.

Establishment of a public-private roundtable, to discuss thepath towards a carbon price and taxes that better reflect theexternalities of fossil fuels used in Chile.

A roadmap towards adequate mechanisms, prices, timings, and graduality regarding
the internalization of social costs incurred when using fossil fuels will be
constructed through dialogue between key and varied stakeholders. Proper pricing ofemissions originating from hydrocarbon use will level the field for competition
between conventional fuels and new energy carriers. Recent international studies
and recommendations shall be strongly considered, such as those by the IMF andthe OECD, 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 agreementsthat Chile is a part of will be leveraged to mobilize human and material resourcesthat accelerate the development of green hydrogen in the country. International
platforms and diplomatic relations with 171 States will be key to unlocking thepotential for green hydrogen locally and globally.

Welder in La Pintana, Metropolitan Region

NATIONAL GREEN HYDROGEN STRATEGY | 25

Standards, safety,
and piloting
Regulation is a cornerstone upon which allindustries are built upon. Early definitions
regarding standards and oversight activities will
safeguard the safety of operators, users, thepublic,theenvironment,
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 reduced
risk. Regulatory mechanisms that allow for pilot
projects and for dedicated authorizations for
projects whose regulation is still not available,
are also necessary.

Chuquicamata copper mine, Antofagasta Region

Bridging of regulatory and standards gaps throughout thehydrogen value chain to ensure safety and give certainty toinvestors.

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 safer
development of domestic applications and export industry. Regulation will be
developed in coordination with the private sector, promoting international
standardization and harmonization.

Establishment of a task force to accompany developers inpermitting and piloting processes for green hydrogen projects
and derivatives.

Coordinated of public services through an agile framework to enable smooth piloting
and development of hydrogen projects and new applications, especially in themining, transportation, and energy sectors. These actions will reduce uncertainty for
private initiatives, generate learning, solve market coordination failures, and insure asafe introduction of new fuels and processes.

Review of natural gas regulation and infrastructure topromote the introduction of green hydrogen quotas.

The physical capability of existing natural gas infrastructure to safely incorporate
blending of hydrogen will be studied. International experience will also be
considered when discussing a gradual mechanism for green hydrogen quotas in gas
grids. Such a regulatory mechanism would create a stable and large-scale demandfor domestic production of this clean fuel, would further utilize existing
infrastructure, and would complement natural gas in the energy transition to asustainable energy system.
NATIONAL GREEN HYDROGEN STRATEGY | 26

Social and local
development
Sustainable development of this new industry
will take into consideration development
throughout the country. The interests, activities,groups, collective visions, needs, and strengths
present in each region shall be considered whendeveloping
projects.
If
thistransversal
development is achieved, then the greenhydrogen potential of Chile will truly enableorganic and decentralized growth. Early andtransparent dialogue between the various
stakeholders in each initiative is a condition forsuccess in this regard, in addition to the
exploration of the multiple existing alternatives
for value sharing between private initiative andlocal communities. Further, studying new
potential uses for green hydrogen to reduce
pollution and generate synergies in various
regions could lead to a more efficient andcoherent development of new infrastructure andlocal policies.
San Pedro de Atacama, Antofagasta Region

Creation of early and transparent participatory mechanisms
between communities and projects.

Dialogue between hydrogen project developers and neighboring communities will
be 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 practices
regarding territorial and communal interests.

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

Assessment of opportunities and challenges offered bygreen 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. These
instruments will be re-assessed in light of the new possibilities that greenhydrogen unlocks, in order to facilitate a coherent and rational integration of these
activities in our regions and their use of land and natural resources. Potential
synergies and challenges with other human activities and requirements, such asuse of water resources, shall be specifically considered.
NATIONAL GREEN HYDROGEN STRATEGY | 27

Capacity building andinnovation
Local technicians and specialists with adequate
knowledge and skills will consolidate a nationalhydrogen ecosystem. Strong local capacities will
give way to new businesses, technicalinnovations, and productive employment. The
State, in its strategic role, will promote
educational,
research,development,
andinnovation activities associated to greenhydrogen. Special emphasis will be given to
applications of national interest that contributeto the objectives laid out in this Strategy.
Navigating the learning and development curvesof this new sector will generate new knowledge
that can spur unique local competitive
advantages. A sophistication of the local supply
side of goods and services will ensue, as well as
the 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 anew, 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 forsophisticated, satisfactory, and good quality work positions.

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 new
required knowledge for an accelerated deployment of green hydrogen will beelaborated. This work shall include collaboration with the awardee of the Clean
Technologies 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 a
dynamic, challenging, and technologically advanced sector.

A work group with public companies will be created toaccelerate 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 strengthened
through this action, in a world that demands an increasing share of clean products
and energy carriers.

ESO Telescope in Cerro Paranal, Atacama Region

NATIONAL GREEN HYDROGEN STRATEGY | 28

Ministry of Energy
Division for
Fuels and New Energy Carriers

Governance

National Council
for Green
HydrogenWill be responsible for monitoring this Strategy, coordinating
the execution of its action plan, and carrying out an updateprocess every 3 years.
Will coordinate throughNational
task force

Public-private
dialogue platform

International
task force

Accelerate thedeployment ofhydrogen projects andapplications

Connect industry,
academia, civilsociety, andinternational partners

Attract investment
and support
formation of GWscale consortiums

Nahuelbuta National Park, Araucanía Region

NATIONAL GREEN HYDROGEN STRATEGY | 29

Promotion of domestic
and export markets

Standards, safety,
and piloting

Social and local
development

Capacity building
and innovation

Set 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 ofhydrogen in these sectors.

Modify Law DFL 1 from 1979 and Law DL
2.224 to define hydrogen as anenergy carrier and, thus, allow for bylaws to be emitted to regulate safetyissues along its value chain.

Communicate knowledge of greenhydrogen to the general public with afocus on environmental and safety
opportunities and challenges togenerate increasing trust in its use.

Prepare diverse groups of public
servants, such as regulators,
evaluators, overseers, and others, on
the implications of green hydrogendevelopment on their fields of action.

Communicate about the request
process for dedicated authorizations
from the Superintendency forElectricity and Fuels, as well as
communicate procedures andconditions to carry out piloting invarious applications.

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

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

Review land use regulations
applicable to the green hydrogenvalue chain and review associatedpermitting processes to identify andreduce potential barriers to its
development.

Horizontally communicate throughindustry and academia the results
and lessons learned in publicly
funded R&D initiatives, such astechnological development
consortiums.

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

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

Promote studies and coordination initiatives
jointly with countries that declare themselves
as net hydrogen importers to promotecommercial initiatives for export-import.
Exchange experiences and formulate
collaborative initiatives to bolster the
deployment of green hydrogen production
and use in Chile through bilateral andmultilateral agreements.
Study and promote the establishment ofinternational certification systems for carbon
footprint and guarantees of origin of greenhydrogen.
Analyze, hold, and lease public lands whichdisplay adequate conditions for competitive
development of green hydrogen and its
derivatives.

Review and update power market
regulation to effectively allow theparticipation of hydrogentechnologies in the provision ofvarious services, including energy,
capacity, and ancillary services.

NATIONAL GREEN HYDROGEN STRATEGY | 30

National Green Hydrogen
Strategy