2. We are facing a climate crisis
MINISTERIO DE ENERGÍA | 2
Energy production and use are at the heart of the challenge
Global warming referenced to 1850-1900 (°C)
Estimated and
probable
anthropogenic
warming
Global CO2eq emissions reach
net zero in 2055
Global CO2eq emissions reach
net zero in 2040
Non-CO2 radiative forcing is
not reduced after 2030
Scenarios
Source: IPCC. (2019). Special Report: Global Warming of 1.5°C.
Global greenhouse gas emissions by sector
Source: Ritchie, H. (2020). Published in ourworldindata.org with data from Climate
Watch and the World Resources Institute.
Energy
73.2%
Industry 5.2%
Agriculture,
forestry, and land
use
18.4%
Waste 5.2%
Iron and steel
7.2%
Others
24.9%
Commercial
6.6%
Residential
10.9%
Land transportation
11.9%
Chemicals and
petrochemicals
3.6%
3. Countries such as Chile can tap into local resources to quickly decarbonize
MINISTERIO DE ENERGÍA | 3
Concentrated solar
power
Solar photovoltaic
On-shore wind Run-of-river
6
GW
509
GW
118
0
GW
19
1
GW
+ +
+
1800+ GW
4. The cheapest green hydrogen on the planet
MINISTERIO DE ENERGÍA | 4
will unlock cost-effective emissions reductions…
Levelized cost of production by 2030
(USD/kg H2)
*Does not consider conditioning, transport, storage nor distribution costs.
1,3
1,4
Middle
East
Chile USA
Australia EU
1,8
1,7
2,2
2,6
2,1
China
Source: McKinsey & Company.
Levelized cost of green hydrogen
(USD/kg H2)
Potential for a 160 Mton yearly green
hydrogen production*
Center
North
South
1.0
0
0.5
2.0
1.5
2.5
30 45
35
2020 40
25 2050
*Source: International Energy Agency.
Source: McKinsey & Company.
1.1
1.2
1.3
1.5
1.8
2.6
2.0
1.7 1.4
1.3
1.2
1.1 1.1
1.0
1.1
0.9
1.0
0.8
5. …and enable the large-scale export of green products
MINISTERIO DE ENERGÍA | 5
Cost of liquid H2 at port of destination, 2030
(USD/kg H2)
(Source: McKinsey & Co)
Chile to
Korea/Japan
Chile to
US
Australia to
Korea/Japan
Russia to EU
Norway to EU
Middle East to US
Middle East to EU
Distribution
Production
1.0
1.7
1.2
1.3 2.0
0.9
2.7 2.5
Shipping
Liquefaction
0.6
0.6
2.2
1.3
Renewable energy carriers
being considered by
developers and investors
Liquid hydrogen
Green copper and other green
exports
Green ammonia
Green methanol / eFuels
LH2
Cu
NH3
CH3OH
6. NATIONAL GREEN HYDROGEN STRATEGY | 12
Projection of Chilean markets for green hydrogen and its derivatives
(BUSD)
3
11
16
19
24
5
7
8
9
2
1
5
16
23
28
33
CAGR
+15%
Associated
renewable
capacity (GW)
2045
2025 2030 2035 2040 2050
5-8 40 145 200 300
250
Source: McKinsey & Company.
Domestic applications
Exports & maritime fuels
Cumulative
necessary
investment
(BUSD)
8 45 150 220 330
270
Clean industry of the scale of our mining sector
A unique opportunity
7. NATIONAL GREEN HYDROGEN STRATEGY | 19
Our ambition
2.5
BUSD/year
25
GW
<1.5
USD/kg
Top
destination for
green hydrogen
investment in
LATAM
Electrolysis capacity
operating and under
development
Production in at
least 2 hydrogen
valleys in Chile
5
BUSD
200
kton/year
5
GW
The cheapest green
hydrogen on the
planet
Leaders in
export of green
hydrogen and
derivatives
Leaders in
production of
green hydrogen
via electrolysis
8. MINISTERIO DE ENERGÍA | 8
We are currently working on 4 priority areas to execute our Green
Hydrogen National Strategy
Regulation and permits
1
Transparent, harmonized standards will enable early projects to supply shipping and others
Financing and incentives
2
The focus on supply-side support will spill over to applications such as shipping
Domestic market and international partnerships
3
Unlocking mining sector and overseas demand will leverage clean maritime fuels demand
Local value
4
Developing infrastructure and capabilities will accelerate the fuel transition in various sectors
9. NATIONAL GREEN HYDROGEN STRATEGY | 12
Some projects already coming to the public light
Source: Siemens Energy
Developer
Key Partners
Location
Magallanes
region
+ Grant of 8 MEUR from
German government
Haru Oni Plant
Export to Germany
11. Wave I: 2020-2025
Domestic ramp up and export preparation
NATIONAL GREEN HYDROGEN STRATEGY | 17
1. Annual sales. Considers the full transition to hydrogen of the energy demand in each application.
Source: Based in analyses from McKinsey & Company.
Oil refineries
Ammonia
Mining haul trucks
(CAEX)
Heavy-duty trucking
Long-range buses
Blending into gas
grids (up to 20%)
Application
1
2
3
4
5
6
Total potential
market1
(BUSD by 2050)
2025 2030 2035 2040
2.0
Potential adoption curve
to achieve 100%.
Targeted breakeven through
action and start of piloting.
Estimated breakeven without
additional action.
We will accelerate the
deployment of green
hydrogen in 6
prioritized
applications to build
local supply chains
and acquire
experience. 0.8
1.6
0.5
0.2
0.3
12. Waves II & III: 2025-2030 & 2030+
MINISTERIO DE ENERGÍA | 12
Scaling up to capture global markets
Source: McKinsey & Company.
Estimated market size for Chilean exports
(BUSD)
Europe USA
Japan/Korea
China LATAM
2040
2025 2035
2030 2045 2050
2040
2025 2035
2030 2045 2050
Green
ammonia
exports
1
Green
hydrogen and
e-fuel exports
2
0.4 2.5 11 16 19 24
Total size
0.4
2
4
5 5 5
0 0.5
7
11
14
19
13. Regulation and permits
MINISTERIO DE ENERGÍA | 13
3 key initiatives in
progress
Next steps
Objectives
• Reduce uncertainty in the
market to accelerate and
facilitate the execution of
green hydrogen projects
• Reduce the complexity
associated with new project
development
• Define economic and taxation
instruments to accelerate an energy
transition, aiming to carbon neutrality
• Develop a green hydrogen by-law for
key applications, to enable quick and
effective development of projects
• Define a Green Hydrogen Legislation to
promote demand
• Evaluate other relevant
existing gaps in
regulation and permits
inhibiting quick and
effective project
execution, assessing
existing best practices
1
Transparent, harmonized standards will enable early projects to supply shipping and others
14. Financing and incentives
MINISTERIO DE ENERGÍA | 14
3 key initiatives in
progress
Next steps
Objectives
• Close cost gaps , fostering
scalability locally
• Develop incentives to
promote development of early
stage projects
• Attract bilateral financing and
development banking, with major focus
on grants and concessional debt that will
enable boosting of green hydrogen
projects
• Launch a 50 MUSD funding round to
support developers of scalable green
hydrogen projects
• Establish certification of origin in order
to validate internationally quality of
Chilean hydrogen exports
• Establish additional
initiatives to reduce
financing cost for green
hydrogen projects
2
The focus on supply-side support will spill over to applications such as shipping
15. Domestic market and international partnerships
MINISTERIO DE ENERGÍA | 15
3 key initiatives in
progress
Next steps
Objectives
• Accelerate internal demand
to achieve decarbonization
and start the development of a
green hydrogen market
• Capture external demand
fast to position Chile as a
competitive supplier
• Generate a public-private agreement
for hydrogen usage in the mining
industry, defining concrete green
hydrogen applications
• Develop a transition plan with ENAP
to enable green hydrogen utilization in
refineries, leveraging existing capacity
and infrastructure
• Sign offtake agreements with key
markets: European Union, Asia and
North America
• Define additional support
mechanisms to foster exports
and aim to become a top 3
exporter of green hydrogen
by 2040
• Attract Consortiums
bringing international
demand, that will foster
vertical integration across
green hydrogen production in
Chile
3
Unlocking mining sector and overseas demand will leverage clean maritime fuels demand
16. Local value
MINISTERIO DE ENERGÍA | 16
3 key initiatives in
progress
Next steps
Objectives
• Prepare local territories with
productive potential in order
to enhance value capture,
focusing on capturing value
throughout the entire value
chain of green hydrogen
production
• Define infrastructure needs to
establish key green hydrogen hubs
(e.g. export terminals, desalination
plants, electric transmission sites)
• Define gaps for large-scale
development of manufacturing
capacity
• Foster green hydrogen applications
in remote geographies and isolated
areas
• Define value capture
initiatives for local suppliers
alongside the productive value
chain
4
Developing infrastructure and capabilities will accelerate the fuel transition in various sectors
