Chile, Europe laying the foundations for green hydrogen exports

Chile is seen as the country that is most advanced along the green hydrogen highway in Latin America.

In terms of national plans, the nation already has a green hydrogen strategy, published in 2020, and officials are now working on an accompanying roadmap. A pilot production plant is under construction, small-scale testing units are operational, and developers are advancing a portfolio of early-phase projects, some with financial support via State development agency Corfo. 

Under its green hydrogen strategy, Chile aims to have the lowest levelized cost of green hydrogen production and become a leading exporter of green hydrogen and derivatives by 2030. There is still a long way to go and various hurdles to clear, both in Chile and elsewhere, as work continues on creating local demand, securing financing, liaising with communities and laying the foundations of trade in the sector. 

To discuss this area of hydrogen exports in particular, BNamericas speaks with Marcelo Villagrán, trade commissioner at the Chilean embassy in The Netherlands, in this interview via email. As part of logistical coordination work, Chile has entered into green hydrogen MOUs with several European ports, which Villagrán discusses. 

The trade commissioner is participating in the World Hydrogen Congress 2022 industry event, being held in Rotterdam this week by British event organizer Green Power Conferences.

BNamericas: Marcelo, you are a Chilean trade commissioner based in The Netherlands. With regard to green hydrogen, what does your role involve/what is your remit?

Villagrán: I’m leading the Chilean green hydrogen internationalization strategy in Europe to coordinate ProChile’s commercial office network in the main markets. ProChile is the Chilean government’s export promotion agency that connects Chilean exporters with international demand through its network of 56 commercial offices worldwide and 16 regional offices in Chile, one in each region. Thanks to this network, we can connect with the different ecosystems and represent our country to identify commercial opportunities and coordinate the efforts of the different ministries and agencies of the Chilean government. 

This is why we organize, together with our embassies, visits of ministers or other authorities to Europe; we represent our country at important international hydrogen forums; and we have also been required by companies and international organizations to support them on their visits to Chile. We work mainly as a bridge to connect and build strong relationships.   

BNamericas: Chile has signed MOUs with several port authorities in Europe. What are the central objectives of these MOUs and what is the state of play now, that is to say, what is happening with regard to these agreements? 

Villagrán: Chile is positioning itself in the world as a future green hydrogen paradise because of our renewable energy potential that amounts to 80 times the current installed capacity of the country and the maturity of our renewable energy industry. Chile is the best country in Latin America for doing business and you can already find in our country all the main international companies, which are key in the development of clean hydrogen projects worldwide. 

This is why it is so important for the country to secure green corridors and to connect with the main industrial ports worldwide. They will be our gateway to reach the different markets and we need to align with them on technical and regulatory aspects to make these exports possible. 

The main objectives of these MOUs are to promote business and study initiatives jointly with countries that position themselves as hydrogen importers, to exchange experience and formulate initiatives to collaborate and promote green hydrogen projects in Chile through bilateral and multilateral agreements, and to establish an international certification system of origin and carbon footprint of hydrogen. 

Chile is working closely with those partners and this is why we already received, in January, delegations from the Port of Rotterdam and the Port of Antwerp-Bruges, and in August from the Port of Hamburg. A second visit to Chile of Port of Antwerp-Bruges is organized for next week and the Port of Rotterdam, together with 15 other Dutch companies, will visit Chile the week of November 7. There's a lot going on regarding these collaborations and I’m pretty sure that these relationships will continue to grow and lead to further cooperation in the future. 

BNamericas: Have you noticed any trends in terms of the types of projects European investors are interested in developing in Chile, for example, green hydrogen, green ammonia, e-methanol? 

Villagrán: There is no mystery that most hydrogen export projects in Chile have chosen ammonia or methanol as the main carriers to transport green energy abroad. This is mainly due to the current technology level of readiness in ship transport and has been reported in different studies. 

The potential long-term winner, post-2030, is expected to be LH2 [liquid hydrogen]. Ammonia and methanol show a higher maturity and fewer technical challenges at the moment, but we agree and expect to accelerate the process to transport hydrogen and achieve higher efficiencies.

Another important situation to highlight is that Chile is also growing the development of projects for internal consumption. This will be essential to generate internal demand that will allow the country to achieve its decarbonization goals, but also the national necessary growth of the hydrogen industry throughout its whole value chain. Due to the size of the projects and the lower investment requirements, we expect them to move forward more quickly than the large ones. 

BNamericas: On a similar note, are there associated projects planned for Chile by European investors, apart from those already disclosed publicly? If so, what details can you share with us? 

Villagrán: There are plenty of them. In Chile we have already more than 60 projects and almost all of them with pre-feasibility studies. We're working on generating a digital platform to make them more accessible, but they're all public and at different stages of development. 

Some of the main European companies are part of them and that's not a surprise, because they've been working in Chile for a while. Hydrogen is generating new opportunities and new players are now starting to work in Chile, but for European companies the Chilean market is well known.  

BNamericas: As things stand, do you have any rough estimates as to when Chile may start exporting green hydrogen and its derivatives, and what are the main hurdles that need clearing? 

Villagrán: This is really the main question that all the potential export countries now have, and we're working really hard to accelerate the process. You can be an optimist or pessimist on that, but one thing is totally clear, we're not alone on this journey. The planet needs clean energy as soon as possible, and the pandemic, war and economic crises show us that we won’t have an excuse this time. This process started really fast and is now going faster than before and if we want to be part of the solution, we need to maintain the pace in this race. 

The challenges that we have are the same that other countries have. I know it won't be easy but, believe me, it will be worth it, and we will have a lot of fun during the process. The Haru Oni pilot project in Magallanes province will start operations at the end of this year and plans to produce around 750,000 liters of e-methanol a year initially and part of the e-methanol will be converted to e-gasoline (130,000 liters a year). But our main target is 2030 and to achieve this goal we obviously need to attract more investment, but also find a new way of developing projects internally, with a more inclusive overview and a close relationship with communities and territories to improve our ESG [environmental, social and governance] performance. 

BNamericas: In Chile, what’s the state of play in terms of green hydrogen legislation? Is there an associated investment-promotion bill on the drawing board and is the energy ministry still planning to produce a green hydrogen roadmap, as then-energy minister Huepe said earlier this year? 

Villagrán: The green hydrogen roadmap is in development and the government is working collaboratively within the new committee for the development of the green hydrogen industry. Several working groups are discussing the different challenges that the country needs to face and in building a new model of sustainable development for Chile. 

We're talking about a new industry, but also about a clean one, that gives us the possibility of promoting a better understanding of projects and their impacts on communities. Our ministries and agencies are also working hard to find the best way to support and stimulate projects financially. 

We need investors, but we also need to provide them with the best conditions to participate in this kind of project. I can say with conviction that we're working on the right path and we have the support of international institutions and companies to achieve the best result on this.  

BNamericas: Finally, you will be participating in the World Hydrogen Congress this month. What do you plan to discuss/present? 

Villagrán: I’m really happy to be part of this important event and to represent my country before major world key players in this industry. My message is clear: we're prepared to deliver what the planet needs from us, but to achieve this goal we need to work together. Climate change won’t wait and countries like Chile are key for the energy transition. 

We will do our best to achieve what is expected, but to do so, we also need collaboration and willingness from different actors, and most of them will be present at this event.  

To produce 1Mt of green hydrogen, around 10GW of electrolyzers is required and the ambition of the REPowerEU plan [a plan for saving energy, producing clean energy and diver­si­fying European energy supplies] is to produce 10Mt and import 10Mt of renewable hydrogen in the EU by 2030. In 2030 about 4Mt will be imported into Rotterdam, and part of that amount will come from Chile. The challenge is huge, but we're really confident and believe in what we're capable of. 

Finally, I will inform the participants about the Dutch H2 Trade Mission to Chile from November 7-11, 2022, organized by the Netherlands Enterprise Agency, or RVO, in close cooperation with the Chilean energy ministry and ProChile. Representatives from Dutch companies including Port of Rotterdam, Port of Amsterdam, but also consultants and storage and transportation providers, will visit Chile for one week to meet key actors of this flourishing Chilean green hydrogen ecosystem.