Chile's potential to become a global green hydrogen leader

Green hydrogen promises to modernize Chile’s mining and transport sectors.

The government launched a national strategy which aims at 5GW of installed electrolysis capacity by 2025, making Chile producer of the world’s most economical green hydrogen by 2030 and a top three exporter by 2040.

The mining sector is an engine to achieve these goals, according to the government plan, since miners could help test and develop green hydrogen-powered machinery and facilitate exports.

To promote Chile's green hydrogen industry, the World Bank approved US$150mn in financing, part of the lender’s US$431mn megaproject, which also involves private and public actors.

BNamericas talks with Paula Ortiz, business and client development leader at engineering and consulting firm Arcadis, about the projects and Chile’s green hydrogen landscape.

BNamericas: How are the overall conditions for green hydrogen development in Chile?

Ortiz: Renewable energies are still on a medium scale and to produce the levels of hydrogen the world requires, larger energy projects are needed. We are talking about 100,000ha for wind and solar farms and processing plants.

A multi-criteria analysis considering engineering and digital tools is also needed to integrate the environmental and social aspects of the place where projects will be built. It is important to consider data from other projects.

Northern [Antofagasta region] and southern [Magallanes region] have the greatest potential to implement large hydrogen projects. They have, for example, adequate power lines, gas pipelines and aqueducts.

BNamericas: How could the mining sector contribute?

Ortiz: Solar panels could be installed in mining areas that are falling into disuse. Anglo American installed panels at its [Las Tórtolas] tailings facility. These are initiatives to consider.

Mining machinery suppliers are making efforts to build dual engines, which can run on diesel and hydrogen and do not depend on a single fuel.

BNamericas: In what state is the mining industry regarding green energy, which is key to green hydrogen production?

Ortiz: Conditions in the north are quite favorable for self-generation, thanks to solar radiation. In addition, a large part of the mining industry already operates desalination plants, which will make it easier to advance with emissions reductions from heavy machinery, trucks or forklifts.

BNamericas: What do you think of the government's green hydrogen strategy?

Ortiz: Chile is one of the few countries that has a strategy in this regard. What is needed is to generate the environment to coordinate projects.

The State provides funds through contests, be it for mining, airports, mobility and other areas. But more is needed to help agents coordinate the large projects that contribute to the diversification of the matrix. Generation, energy, desalinated water, processes, export, accessibility to ports and more must be considered.

BNamericas: Is the green hydrogen legal framework appropriate?

Ortiz: There is a strategy and guidelines for obtaining environmental permits that are essential for projects, but at this time no specific regulations associated with hydrogen exist. 

Rather, adjustments or revisions are being made that will allow, for example, to work on safety issues with [energy regulator] SEC regarding the handling of substances during production. There are also regulations for generation, for solar and wind, and matters related to production processes. But more specific guidelines for large projects are lacking.

BNamericas: What areas are crucial for green hydrogen in Chile?

Ortiz: It would be interesting to see if an airplane could be mobilized with this fuel, since planes generate a lot of emissions, just like maritime transport or other forms of mobility where electrification does not work.

All buses in locations with poor air quality should be converted to hydrogen. In this sense, the mining industry has an opportunity to use hydrogen and reduce emissions.

BNamericas: Have the key hydrogen generation, storage and distribution points already been mapped?

Ortiz: Yes. Talks have started to enable generation, production and export via ports. Representatives of the port of Rotterdam even visited Chile to understand the dynamics. Originally, hydrogen was seen as a whole, but now it is understood as an ecosystem of several parts.

BNamericas: Is Antofagasta or Magallanes better prepared in terms of infrastructure and energy potential?

Ortiz: It’s easy to think Antofagasta region has the advantage, since it has a port system, but adjustments are still needed, such as improving access roads. Thanks to mining, Antofagasta is perhaps better prepared, but the south, specifically Punta Arenas, also has a history of exports and experience in removing and receiving fuel from its port through Enap and Methanex. But adjustments are also required to receive inputs and export hydrogen.

Both have virtues that complement each other. It is important to review access roads, since projects will require a lot of inputs.

BNamericas: What does the US$150mn financing from the World Bank mean?

Ortiz: The World Bank has developed its sustainability line and established standards. A loan from the World Bank increases the importance of the issue at a global level; it will encourage projects and generate more concern about safety.

BNamericas: What does Arcadis' green hydrogen strategy involve?

Ortiz: Our hydrogen committee has a multidisciplinary perspective with areas such as sustainability, engineering, electricity, the environment, permits, social aspects and international standards.

We understand that a large hydrogen project includes several parts, such as power generation, transmission, production, process operation, desalination plants, export, marketing, closing processes, and so on.

The hydrogen industry will be relevant for the mining sector and others that must reduce emissions. We know that trucks and high-tonnage mining machinery cannot be electrified, but perhaps they can switch to hydrogen.