Chile approves new Engie, Enaex green hydrogen project

Authorities have approved Chile's second green hydrogen project -- one that aims to reduce emissions generated by the country's giant mining industry.

Under the $97 million pilot project, energy firm Engie will build a 26 MW electrolysis plant, which will supply the gas to a plant operated by explosives producer Enaex to convert it into ammonia.

Enaex will use this green ammonia to replace some of the ammonia it imports for its explosives plant.

Operations are due to begin in 2025.

By producing emissions free explosives, the companies aim to reduce the carbon footprint of Chile's mining sector, which produces more than a quarter of the world's copper. The pilot plant alone will reduce emission by about 30,000 mt of CO2 annually -- the equivalent to electrifying 11 mine trucks.

The companies aim to scale up the operation to reach 2,000 MW by the end of the decade.

"The obtention of this license marks a milestone in the project's development and is an important signal for the enormous potential that exists in northern Chile for green hydrogen production," said Engie Chile CEO Axel Leveque.

Under a national strategy launched in 2020, Chile has set itself the ambitious target of becoming a top three producer of the fuel by 2040. Most of the projects unveiled so far have been located in the country's far south to exploit its huge potential for wind energy.

HIF Global has already begun construction of a pilot plant in southern Chile to produce e-fuels from green hydrogen that could enter production in 2024.

Earlier in April, the company announced a capital increase of $260 million attracting investments from carmaker Porsche, oil services company Baker Hughes and private equity firm EIG Global Energy Partners.