South Korea hungry for hydrogen as expert urges strategy alignment with Chile

South Korea wants to start importing green ammonia from 2025, but Chile – working to become a major global exporter – will likely need more time to bring large-scale production online.

The Asian nation has recently beefed up its hydrogen plans and is looking to employ hydrogen and its derivatives in the transport, power generation and industrial sectors.

Like many Asian and European countries, South Korea will need to purchase overseas to help cover demand.

“We need to import green hydrogen in the form of green ammonia, beginning in 2025, according to our roadmap and plan,” said Younkyoo Kim, director of the energy and environment institute at South Korea’s Hanyang university.

“This is a little bit different in terms of timing of production from the Chilean side. We need to import earlier than the production schedule; that’s the problem we have found.”

Chile is among potential global suppliers blinking on South Korea’s radar, Kim told a hydrogen event hosted by Fundación Chilena del Pacífico, an organization tasked with supporting Chile’s economic insertion in the Pacific basin.

Under Chile’s national hydrogen strategy, the country aims to be producing 200,000t/y by end-2025. A 1,600t/y project, aimed at the domestic market in its first phase, recently entered the environmental review system, becoming the first of its kind seeking the green light in Chile. 

Experts say the country must accelerate plans to ensure projects secure electrolyzers before a projected global output bottleneck materializes.

Kim, who conducted hydrogen research in Latin America for electricity utility Korea Electric Power Corporation and met with energy minister Diego Pardow this year, said timing was the “number one priority” of his country, which is looking to start by importing at least 5Mt. 

By 2050, hydrogen consumption in South Korea is projected to reach 27Mt, with power generation accounting for around half. 

“What we need is green [hydrogen],” Kim said. “When it comes to green, we need to import, and that’s how Chile and Korea are bound together.”

Kim said Chile had a “very good hydrogen plan” and was likely to achieve its ambition of becoming the leading global hydrogen exporter, adding that the two nations should align their hydrogen strategies. 

Other priorities for South Korea, he said, are signing long-term offtake agreements, potentially with equity stakes, and addressing the issue of standards adoption.

Meanwhile, Chilean energy minister Diego Pardow, alluding to state subsidy schemes announced elsewhere, said in a presentation during the event: “Other markets are developing initiatives for their internal development, which could be attractive initially but could contravene international trade rules.” He added that quality certification work was among the government’s hydrogen priorities. 

Pardow, in response to a question from BNamericas, said Chile’s green hydrogen roadmap, which complements an existing national hydrogen strategy, was due to go out to public consultation next quarter. 

In Chile’s favor is a state policy push, stable operating environment, and abundant solar and wind resources.

APEC DEMAND 

Under a carbon neutrality scenario, APEC hydrogen demand corresponding to new uses of the fuel is forecast to hit 9Mt by 2030 and 74Mt by 2050, according to an APEC energy study. Chief offtakers are transport and industry. 

In terms of supply to APEC, electrolysis is expected to yield over 1.1Mt by 2030, with blue hydrogen, for cost reasons, accounting for the bulk of the balance. But from the 2030s, as green hydrogen becomes more competitive, supply from electrolysis processes is forecast to grow apace, reaching 55.7Mt by 2050. 

To accomplish this, a minimum of 9GW of electrolysis capacity must be installed by 2030, with the 2050 goal 403GW.

“Hydrogen is an important issue in APEC, and we have leaders, Chile among them,” Manuel Heredia, a researcher from the Asia Pacific Energy Research Center, told the Fundación Chilena del Pacífico event. 

A regional economic forum, APEC comprises 21 member nations, including Chile, Mexico, Peru, South Korea, China, Japan and the US.

GLOBAL DEMAND

Globally, hydrogen demand is expected to climb to 200Mt by 2030, with 25% of global hydrogen demand traded internationally by 2050. Around 94Mt of hydrogen was produced in 2021, over 80% from coal and natural gas, according to the IEA. 

Pure hydrogen is expected to remain within the regions where it is produced, while derivatives are forecast to be traded worldwide.

According to 2022 IEA estimates based on projects under development, by 2030 some 12Mt/y of low-carbon hydrogen exports are forecast, led by Latin America with just over 3Mt/y, shouldered by Chile, Brazil and Argentina.

CHILE

Chile has a multibillion-dollar pipeline of green hydrogen projects in the development phase and plans to repurpose logistics infrastructure in wind-rich southern region Magallanes, where around 30GW of green ammonia and e-fuels projects are planned. Chile’s sundrenched north is also home to multiple projects and has existing logistics infrastructure.

Chile could attract US$155bn in green hydrogen outlay in 2025-30, with some US$45bn targeting Magallanes, state development agency Corfo said recently. 

Officials in the South American nation are working on various fronts including territorial planning and project permitting reform – deemed a major hurdle that needs clearing – and hydrogen certification. The first export-scale projects will likely start entering production in the second half of the decade. 

A demonstration e-fuels plant, Haru Oni, began operating in Magallanes last year.