For several decades now, Chile has positioned itself at the forefront of the global energy transition. With optimal solar conditions in the North and strong winds in the South, the country has been heralded as a potential green energy superpower. Back in 2020, when Chile released its first Green Hydrogen National Strategy, the potential on paper was high and so were the expectations. The country had set three targets:

• build 5 GW of electrolysis capacity by 2025
• produce the world’s cheapest green hydrogen by 2030
• rank among the top three global exporters by 2040

This ambitious plan coincided with forecasts that green hydrogen (H2V) could reach a scale comparable to that of Chile’s copper mining industry, attracting more than $200 billion in investment and creating 100,000 jobs over the course of two decades. However, six years later, those ambitions have been scaled back, the government has had to revise its national strategy several times, and various mega projects have been put on hold.

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Chile: A Natural Superpower on Paper

Chile’s enthusiasm for its green hydrogen potential was justified. Green hydrogen is produced by electrolysis powered exclusively by clean electricity, which requires significant renewable energy production capacity. Many opportunities exist in Chile, particularly in two high-potential regions: northern Antofagasta, which enjoys some of the most intense solar radiation on the planet, and southern Magallanes, where winds are exceptional. In 2020, the Ministry of Energy estimated that Magallanes alone could contribute 13% to global green hydrogen production. Encouraged by these figures, many developers expressed interest, and nearly 80 projects have been announced for completion by 2025 in these two regions.

Becoming a major producer of green hydrogen is one of the cornerstones of Chile’s energy transition. The country aims to achieve carbon neutrality by 2050 and to close all its coal-fired power plants by 2040. This transition is already well underway, with renewable energies (solar, wind and hydro) representing approximately 70% of the country’s electricity production.

Reality Check: Too Much Too Fast?

Today, the global development of green hydrogen is hampered by high production costs. The current cost of producing green hydrogen is around $4.50/kg, far from the target of less than $1.50/kg that would allow it to compete with conventional fossil fuels. Furthermore, the international transport of liquid hydrogen is highly inefficient and expensive due to its low density. Consequently, potential buyers are hesitant to commit, waiting for the infrastructure to be operational and the price to be competitive.

This explains why Chile’s initial target, set in 2020, of achieving 5 GW of electrolysis capacity by 2025, has not been met. High investment costs, technological constraints, and a lack of infrastructure have led critics to describe the initial enthusiasm as exaggerated, characterized more by rhetoric than by operational reality. For some, the country went too fast.

This reality check has triggered a series of major project cancellations and delays:

• AES ANDES — a subsidiary of American multinational AES Corporation — withdrew its $10-billion INNA green hydrogen and ammonia project to focus on other renewables.
• French electricity company EDF canceled its major “Energia Verde Austral” project in southern Chile.
• Spanish developer IGNIS has scaled back and paused a 4 GW complex, citing low international demand.
• French company TOTAL ENERGIES, withdrew from a mega project in Magallanes, causing the suspension of activities for local association H2V Magallanes.
• Domestic off-taker ENAEX delayed its final investment decision on the 2 GW HyEx project with Engie, citing uncompetitive local conditions.

By December 2025, 83 green hydrogen projects were still in developing phase in Chile and 17 of them were operational.

Chile is not the only country where green hydrogen ambitions have been revised down in the past couple of years. Developers have canceled projects in Spain, Morocco, Germany and Australia among other countries. In the European Union, it is expected only a fifth of hydrogen projects currently underway should be online by 2030.

Recalibrating Ambitions Inward

Rather than abandoning the sector, Chile is undertaking a pragmatic reorientation. Its updated green hydrogen strategy now prioritizes stimulating domestic demand and creating regional hubs over immediate exports. The revised targets aim for a realistic level of 100,000 to 200,000 tons per year for domestic demand by 2035 and 300,000 to 700,000 tons per year for exports.

This readjustment clearly prioritizes local consumption, targeting specific high-value-added industrial applications. It naturally fosters the development of a green hydrogen hub in northern Chile, where the mining sector is already a direct buyer. This approach aligns with that advocated by industry experts: rather than adopting a uniform national strategy, green hydrogen should be promoted on a case-by-case basis, where it is relevant and where demand is sufficient.

In this context, the Chilean mining sector has demonstrated its capacity to drive major transformations. In recent years, the mining industry has invested in automation, digitalization, electrification, and now, in the adoption of AI. Tomorrow, it could be at the forefront of adopting green hydrogen as a stable energy source for the development of zero-emission mining logistics.

Other projects exist such as SynFuels Biobío pilot project: a joint venture supported by Corfo1 and bringing together forestry giant Arauco with Copec and Abastible. The goal is to capture biogenic CO2 from pulp production and combine it with green hydrogen to produce synthetic fuels, utilising existing infrastructure to avoid transport costs.

The shift towards domestic demand is a key turning point in the national green hydrogen strategy. By favoring the development of projects for existing buyers and abandoning (for the time being) export ambitions, this creates a geographical imbalance: the industry is expected to develop more in the North and less in the South where the planned projects were mainly intended for export.

Environmental Friction in the Deep South

Beyond economic considerations, large-scale projects have caused environmental and social tensions, especially in Magallanes. Although green hydrogen and ammonia are presented as opportunities to boost the local economy, the scale of the announced mega-projects poses certain challenges.

For example, HNH Energy’s $11 billion project — although recently approved by environmental authorities — involves the installation of 194 huge wind turbines that overlap with the nesting areas of the red-billed canquén, an endangered species. In the same area, the municipality of San Gregorio rejected the feasibility study for TEC’s H2 Magallanes project, valued at $16 billion, warning that Pali Aike National Park would be “trapped” within an industrial corridor.

Water scarcity also makes desalination necessary, raising concerns that discharges of hot, concentrated brine could damage kelp forests, local fisheries and migratory marine mammals, such as dolphins and humpback whales. Local citizens are worried that Magallanes could become an industrial “sacrifice zone”, where developers intervene in isolated communities to build consensus.

From “Hyvolution” to “Energyvolution”

A powerful symbol of the sector recalibration was illustrated at the Hyvolution Chile 2026 trade show last week as GL Events Director Francisco Sotomayor announced that in 2027 the event will be renamed “Energyvolution”. This shift, he argued, recognizes that the energy transition cannot be approached in a fragmented way; hydrogen must be integrated into a broader, interconnected ecosystem encompassing solar and wind power, storage, and transportation. It also signals that the potential of green hydrogen has yet to be fully realized.

Vivianne Blanlot, President of the Hyvolution Congress, highlighted the growth of the hydrogen industry in Chile, which now enables the country to have “a more mature conversation” on the subject:

At a national level, we have the potential, but there is still some way to go in terms of precisely defining areas of competition, actual demand and the structuring of business models with a solid chance of coming to fruition. The question is not whether green hydrogen will play a role in the energy transition. It will. The crucial question is in which applications it offers the greatest benefits and is therefore most competitive.

Hyvolution Chile 2026 provided some examples of how this recalibrated strategy could unfold, with more concrete and local applications. The event featured the PH2EV, the first Chilean-made hydrogen delivery truck that will be used by beverages company CCU. A commercial agreement was signed by Corfo and several major Chilean companies for the promotion of green hydrogen in their respective production processes. A Memorandum of Understanding was also signed by Marval and H2 Green Mining to develop and structure zero-emission mining logistics.

The Road Ahead

Although the ambitions have been recalibrated, green hydrogen remains a source of opportunities for the country. One of the most relevant is green ammonia, a direct derivative of green hydrogen obtained by combining hydrogen with atmospheric nitrogen. Chile has a leading local market in its mining industry, a major consumer of ammonium nitrate for its explosives, as exemplified by the HyEx project led by Engie and Enaex. By serving as an ideal vehicle for exporting renewable energy and directly supplying the mining sector, green ammonia is emerging as a relevant and pragmatic opportunity for Chile.

Opportunities also exist in logistics. A recent study conducted by two universities shows that the intensive use of hydrogen-powered lorries on long-distance routes can make them highly competitive compared to diesel. Furthermore, in Magallanes, the focus has turned to human capital as the University of Magallanes (UMAG) and the State Regional Technical Training Centre have launched specialised study programmes to train local technicians in the operation of electrolysers and fuel cells.

The green hydrogen sector in Chile is neither an immediate goldmine nor a complete mirage. It is a marathon with considerable stakes that implies structural changes at the global and national levels. The country is transforming its ambitious vision into a more pragmatic roadmap. Despite this setback, Chile’s commitment to long-term decarbonization remains intact, thanks to a certain degree of political stability; even under the conservative government of José Antonio Kast, the $2.8 billion tax credit for green hydrogen should be maintained2.

The future of green hydrogen projects in Chile in the coming years will also be determined by policy support. The government released a few months ago the Ruta Energética, a necessary roadmap for the development of electricity and renewables in the country. A context of sustained economic growth and investment dynamism will also be essential to transform ambitions on paper into very real projects.