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EU pledges €‎225m for Chile’s green hydrogen sector amid charm offensive with potential Latin American exporters

‘We need friends that are producers of green hydrogen’, says European Commission president in Santiago, following H2 agreements in Brazil and Argentina

European Commission President Ursula von der Leyen shaking hands with Chilean President Gabriel Boric in Santiago yesterday.
European Commission President Ursula von der Leyen shaking hands with Chilean President Gabriel Boric in Santiago yesterday.Photo: Agencia Makro/Getty
  • Polly Martin

The EU has launched two programmes worth a total of €‎225m ($243m) that will be spent on building up Chile’s green hydrogen industry, setting the stage for exports to Europe.

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European Commission President Ursula von der Leyen announced the “Team Europe Renewable Hydrogen Fund in Chile”, while on a visit to the country’s capital Santiago on Wednesday.

Chile will receive loans of €100m each from the bloc’s lending arm the European Investment Bank (EIB) and German state-owned bank KfW, which will go into the country’s $728m green H2 fund that is due to open next year. The EU will top this up with a €16.5m grant through its Latin America and Caribbean Investment Facility.

The Chilean government’s hydrogen fund, which will be run by its national development agency Corfo, is also backed by $400m from the International Development Bank and $150m from the World Bank.

In addition, the EU has promised a further €8m as part of a technical assistance project to facilitate knowledge transfer, technology development and impact assessments — half of which will cover from European coffers, with the other 50% coming from Germany’s Federal Ministry of Economics and Climate Protection.

European Commission President Ursula von der Leyen described this funding for Chilean hydrogen at a press conference yesterday as “a great step forward” given the “skyrocketing” global demand for H2.

“We need friends that are the producers of this green hydrogen. And for us, Chile, our friend, this is one of the most important projects that we can embark on together,” she said, adding that the fund will “boost your exports of renewable hydrogen to the world but of course also to partners, like the European Union”.

Given the EU has pledged to import half of its targeted 20 million tonnes of green H2 demand by 2030, the bloc is ramping up its overtures to potential exporters.
Chile is an obvious candidate for potential supply to Europe, given it is expected to leverage strong wind and solar resources to become one of the top ten producers of green H2 by 2030. Research firm Rystad Energy estimates that the country will produce around 1.4 million tonnes by that year.
And earlier this week, as part of a tour of South America, von der Leyen pledged billions of euros for renewable hydrogen development in Brazil and Argentina through the Global Gateway fund, although, unlike Chile, details on how exactly this finance will flow into these countries’ sectors are yet to be disclosed.
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ChileSouth AmericaEUEuropean CommissionLatin America
Published 15 June 2023, 12:12Updated 15 June 2023, 12:12