The future of green hydrogen in Magallanes (Chile) is reoriented towards smaller-scale projects and local consumption in the face of the difficulties of the international market.

 

The measure responds to the complex scenario that this industry is going through worldwide, where postponed projects are accumulating, demand expectations are falling and growing obstacles to obtain financing and buyers.

 

The program had been officially launched in September 2025, with a projected execution over three years and a total financing of six billion pesos by Corfo.

 

To date, only two billion pesos had been transferred corresponding to its first stage, with which it should close operations on December 31 of this year. The initiative was coordinated by Fundación Chile together with the Finnish research center VTT Research, as well as universities, companies and institutions linked to the energy sector.

 

Postponement of projects and financing difficulties

 

Corfo stated that the adjustment is due to a redefinition of the strategy for low-emission hydrogen. The agency's Technological Capabilities Manager, Fernando Hentzschel, explained that the projected demand for technological services associated with the sector fell enough to make it unfeasible to sustain the program within the originally planned deadlines.

 

"Hydrogen production projections have fallen worldwide due to the postponement of large projects due to their high costs, and the difficulty in finding financing and offtakers," he said.

 

In addition to this diagnosis, the International Energy Agency (IEA) adjusted downwards its projection of potential production of low-emission hydrogen for 2030, from 49 million to 37 million tons per year, as a result of the postponement or cancellation of projects and the competitiveness challenges that persist in the sector.

 

Boosting local consumption

 

Faced with this panorama, Hentzschel said that Corfo will redirect its efforts towards smaller-scale initiatives, designed to boost local consumption.

 

"The global trend in the current state of the market aims to encourage smaller-scale renewable hydrogen projects, aimed at local consumption and production and with offtakers and contracts secured," he said.

 

However, Corfo insisted that the early closure is not due to failures in the execution of the work led by Fundación Chile, but only to the turn taken by international market conditions and the need to concentrate public resources on initiatives with a greater impact on employment and economic growth.

 

Other milestones that show the industry's retreat

 

The end of NEMa adds to a series of setbacks that the sector had already been accumulating. AES Andes has withdrawn from building the INNA project in Antofagasta, valued at 10 billion dollars, while the French state-owned EDF has cancelled its Energía Verde Austral (Eva) initiative in Magallanes.

 

Added to this is the decision of TotalEnergies, which asked to postpone until 2026 or 2027 the environmental processing of its regional megaproject – of 16 billion dollars – citing the high number of observations from the Environmental Impact Assessment System (SEIA) and the lack of committed offtakers.

 

At the union level, the H2V Magallanes group also temporarily froze its activities, arguing the "non-existence of a consolidated market."

 

This accumulation of signals coincides with the IEA's cut in projections, which pushed Chile to recalibrate its roadmap and prioritize domestic industrial consumption over massive exports in the short term.

 

Source:   Fuel Cells Works