The Chamber of Deputies has approved the Green Hydrogen Industry Promotion Bill, moving it forward to the Senate for further consideration. The bill aims to support the development of Chile’s green hydrogen sector by introducing a temporary tax benefit totaling $2.8 billion. This incentive is designed to boost demand for green hydrogen and its derivatives, such as ammonia and methanol.
The legislation also proposes a special tax framework for producers who establish operations in the Magallanes and Chilean Antarctic region, leveraging local natural advantages for green hydrogen production.
Álvaro García, Minister of Energy and Economy, Development and Tourism, commented on the approval: “This is great news for Chile; the green hydrogen industry has an extraordinarily large potential for development in our country. It also helps decarbonize the country and therefore protects our citizens and climate. We are taking a very important step forward to generate quality jobs throughout the national territory.”
Finance Minister Nicolás Grau added: “With this approval we take another step towards making Chile a world leader in the green hydrogen industry, bringing more employment, more innovation and more investment. It is very important that the National Green Hydrogen Strategy was promoted by President Piñera’s government and continued by President Boric because major productive efforts require continuity and state vision.”
The proposed tax benefit will be allocated through annual tenders among H2V producers. Companies purchasing green hydrogen or its derivatives from these producers can then use these credits against their first category tax liabilities, helping offset higher production costs associated with this energy source.
Additionally, by establishing a uniform tax regime in Magallanes, authorities aim to encourage more companies to set up production facilities in that region.
Following approval in the lower house with 75 votes in favor, 22 against, and 10 abstentions, the bill now moves into its second legislative stage in the Senate.
