Chile on European hunt for investors in green technology

PARIS: Chile is embarking on a European hunt for investors in solar, wind and green hydrogen technologies as it looks to decarbonize copper mines and other industries reliant on fossil fuels. Marcos Kulka, CEO of H2Chile, a hydrogen association of 102 public and private companies, travelled to Europe to outline his government’s energy strategy amid renegotiations of an EU-Chile trade and investment deal.

Kulka told AFP that, “given the resources it has”, Chile can become carbon neutral by 2040 - 10 years earlier than the global net-zero target set in the Paris Agreement on climate change.

Speaking on the sidelines of the Hyvolution energy trade show in Paris this month, Kulka said 24 percent of the reduction in emissions in Chile will come from hydrogen and its derivatives. Hydrogen, which emits only water vapor when consumed, is touted for potential use in high-polluting heavy industries such as steel, metals, cement, and chemicals, as well as in shipping and transport.

But producing it at mass scale is a major challenge, as costs remain high and the infrastructure is lacking so far. It is considered a “green” fuel when it is produced by using electricity generated by renewable energy to split water molecules. Hydrogen can also be made through a more controversial method using natural gas, so-called “blue hydrogen” which needs to be paired with carbon capture equipment to be considered climate-friendly. The International Energy Agency said last month that only seven percent of projects announced worldwide to use renewables to produce hydrogen this decade are expected to come online by 2030. But Kulka said Chile “could become one of the cheapest hydrogen producers in the world”.

The country plans to shut down its coal-fired plants by 2040 and replace them with renewable energy sources which will themselves be deployed to produce green hydrogen. Chile is the world’s top exporter of copper, a crucial metal for the energy transition as it conducts electricity. But the mines are also emitters of greenhouse gases as their operations rely on fossil fuels. To reduce copper’s carbon footprint, the country can count on solar power near copper mining areas in the north and wind in the south, Kulka said. He said Chile needs $60 billion in investment by 2050 for its green hydrogen plans.

The low cost of renewable energy has drawn interest from Austria Energy, French energy giants Engie, TotalEnergies and EDF, and a clutch of German, Dutch and Norwegian companies that want to import green hydrogen in Europe. For now, however, Chile’s installed green hydrogen capacity remains low at barely two megawatts, with a goal to reach 25 gigawatts by 2030, Kulka said. Current global installed capacity stands at 1.1 GW, according to the Hydrogen Council.