Green Hydrogen: How Do You Take Advantage Of The Opportunity?

On the year 2020, the Chilean Ministry of Energy published the ‘National Strategy of Green Hydrogen,’ which defined the first guidelines of public politics aimed at promoting this policy in the country. The strategy established three objectives: (i) to produce the least expensive Green Hydrogen on earth by 2030, (ii) To be among the three largest exporters by 2024 and (iii) To have 5 GW of electrolysis capacity under development by 2025.

By the end of 2023, the Ministry went deeper with the strategy through what was named the ‘Action Plan for Green Hydrogen 2023-2030.’ Its objective was to define the itinerary for deploying the green hydrogen industry and its derived products. The plan has just completed the citizen consultation process and aims to achieve a broad national consensus about the development of the industry.

In parallel to these definitions, at the date of publication of this letter, the private sector has been working intensively on different developments in the north and far south of the country. However, to date, only five initiatives have been submitted to the environmental assessment system.

These projects aim to obtain the desired authorization or environmental license, a prerequisite to building and operating any relevant investment project in Chile and worldwide. According to the public background of these projects, the declared production is well below of achieving the goal declared for 2025.

Furthermore, these projects must still overcome a series of requirements and comments from the community and the environmental authority itself, which translates into months and sometimes years of bureaucracy and environmental processing. Only once this procedure has been completed will the initiatives be able to begin with the construction and operation stages.

Finally, the public and private sectors have established alliances not only at the local level but have sought alliances with other countries and foreign institutions, which come together in the so-called ‘LAC Green Hydrogen Action’ that brings together countries of Latin America and the Caribbean. Chile is also in a declared process of energy transition with a view of achieving the country´s commitment to carbon neutrality by 2050.

In this context, the massive incorporation of renewable energies, the exit from coal and the inclusion of Green Hydrogen Will be key elements of the process. The experiences published in studies that address the energetic transition conclude that Green Hydrogen can be a fundamental piece, but for achieving this, it is essential that the planning and land use management instruments do not limit the installation of industrial projects.

“Chile is also in a declared process of energy transition with a view of achieving the country´s commitment to carbon neutrality by 2050”

A study commissioned by the Economic Commission for Latin America and the Caribbean (CEPAL) confirms that it is ‘critical to adjust the perceptions associated to the environmental and social impacts of new industrial projects so that projects that contribute to the energy transition that is not polluting can be developed.’

This criticality is increased when considering that green hydrogen production requires typically industrial annexed facilities, such as desalination plants, port constructions and linear installations such as electricity transmission lines, pipelines, extensive solar and wind farms, BESS, among others, types of projects that historically -and dependent of their location- have generated varying degrees of socialenvironmental conflicts.

Thus, adequate regulation of the use of the territory must facilitate the achievement of sustainable development objectives, which, on the one hand, allows and helps the energy transition in areas where there is currently industrial development (brownfield) but, on the other side also encourages it in new areas where these types of industrial initiatives do not exist yet (greenfield).

Therefore, the challenge of executing large-scale industrial projects with the least socio-environmental conflicts and in areas where territorial planning allows it is the greatest challenge to reach a truly mature Green Hydrogen industry, which will allow us to achieve the imposed goal of reaching carbon neutrality in Chile by 2050.

How to achieve this? Is there a formula to successfully and quickly overcome the difficulties that environmental licensing processes generate? Will the public policy objectives defined by the Chilean State be met? Should we adjust expectations of support initiatives more decisively in order to meet the deadlines and the objectives set?

The answer, to be sure, is not simple. However, there is accumulated experience in Chile of more than twenty years of operation by the Environmental Impact Assessment System (SEIA) and even more years of similar systems worldwide, allowing us to extract certain criteria and general guidelines.

Time will tell if, in the end, we were successful in transforming Chile into a powerhouse in the Green Hydrogen industry and if we took advantage of the unique opportunity that we have as a nation, but at least it seems to be clear that in the context of the climatic emergency, we should redouble our public and private efforts to advance more decisively in supporting the development of this national industry.