Investors Lining Up for Hydrogen Subsidies in Chile
(Bloomberg) -- Chile plans to begin a competitive process within a month to award $50 million in subsidies for green-hydrogen projects as the biggest copper-producing nation strives to become carbon neutral.
The Energy and Mining Ministry has identified about 40 projects in industries including mining and infrastructure and has received considerable interest from local and overseas groups, said Energy Minister Juan Carlos Jobet. Funds would be awarded later in the year.
“We’ve seen a lot of traction in green hydrogen,” Jobet said in an interview Wednesday. “The main purpose there is to scale up production, to reduce the cost of electrolysis, which is the biggest challenge there.”
Green hydrogen -- produced by stripping the gas from water using electrolyzers powered by wind and solar -- is seen as key to eliminating carbon emissions from the industrial sector. Ramping up Chilean production would help the country meet its target of becoming carbon neutral by 2050 and help mining companies make the switch to cleaner fuel at a time of rising scrutiny by investors. Chile boasts plenty of solar capacity in its northern desert and wind in the south.
Prospective investors include local energy producers and overseas suppliers of hydrogen made from fossil fuels looking to get a foothold in a country that will play a key role in green hydrogen in the future, Jobet said.
Anglo American Plc said it plans to start a pilot fuel-cell plant at one of its Chilean mines, while Antofagasta Plc is among producers considering changing to hydrogen-powered trucks. Other companies are looking to use hydrogen in boilers and trains, Jobet said.
The Energy and Mining Ministry is also setting up a technical advisory team with the Finance Ministry to lay out a path toward higher carbon prices that would allow green hydrogen to better compete with fossil fuels, he said.
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