Chile's Ministry of Energy will soon present a new bill to promote demand for green hydrogen (H2V), with the aim of accelerating the development of this industry in the country and facilitating investment decisions for both producers and industrial consumers. "We are beginning the pre-legislative work for a new bill to promote demand."
“We hope to present it as soon as possible for approval, hopefully during this legislative session,” confirmed Chile’s Minister of Energy, Diego Pardow . The proposal is designed as part of the Green Hydrogen Action Plan , aligned with the consensus reached in the sector.
The project's central mechanism will be the creation of a pool of tax credits allocated to the First Category Tax (IDPC) , aimed at companies domiciled in Chile that use green hydrogen and its derivatives. The total amount available for these credits will be USD 2.8 billion, distributed through an inter-ministerial committee comprised of representatives from the Ministries of Finance, Energy, and Economy. A first incentive package of USD 700 million is expected by 2025, with a unit cost cap of USD 5 per kg/H2V .
The amount will gradually decrease until it reaches USD 300 million in 2030 , along with an adjustment to the H2V cost cap. In addition, the creation of a complementary transitional fund , managed by Corfo and/or the Treasury, is being considered to finance measures beyond the tax incentive, with the aim of fostering the development of the H2V industry nationwide. One of the project's strategic components will be its territorial impact, with a special emphasis on the Magallanes region, which is emerging as a key hub for green hydrogen production. "We are discussing and analyzing other aspects related to territorial incentives, particularly in the Magallanes area, and how industries developing in these regions can anticipate their contributions to the development fund," explained Pardow. Why? The government considers green hydrogen not only as an energy carrier but also as a tool to reindustrialize certain areas of the country and strengthen production chains. In turn, the plan aims to decarbonize the energy consumption of local industry, facilitating compliance with Chile's climate commitments and positioning the country as a regional leader in the energy transition.
Of those projects, nine correspond to the energy sector.
However, to date, only six have been approved by the entity.These ventures encompass initiatives from companies such as
INNA Soluciones Renovables, Transmisora Tal Tal, HIF Chile, Engie, ENAEX, and GNL Quintero . The approved investments total approximately USD 954 million and include the installation of 512 MW of photovoltaic capacity, 353.4 MW of wind power, and 36 MW of electrolyzers , with an estimated production capacity of 5,030 tons of green hydrogen per year.