Chile moves forward with US $2.8bn green Hydrogen tax credit scheme

Chile’s finance committee has adopted amendments to the draft law promoting green hydrogen, meaning the bill now moves to the full chamber before passing to the senate.

Key details include:

• A new tax-credit scheme totalling up to US $2.8 billion, to be allocated via six annual tenders between 2025 and 2030 (starting with about US $700 million in 2025, declining to about US $300 million in 2029-30).
• The tax credit will be redeemable by buyers of green hydrogen (and derivatives) against corporate income tax — lowering offtake cost and stimulating demand for domestic production.
• For projects in the southern Magallanes & Chilean Antarctica region a special tax regime will apply: including corporate-tax exemption, VAT relief on imported equipment, and access to the credit scheme.
• Conditions have been tightened: the revised draft delays the payment of a 1 % social-contribution fee from the permit stage to the construction-start stage, and includes revocation or penalty criteria if production delays exceed six months without permit cause, or actual output falls by more than 20 % below declared volumes without justification.

What this means for the hydrogen ecosystem:

This move signals Chile’s intent to secure a stronger position in the global green-hydrogen value chain by creating both demand-pull (via tax credits to buyers) and supply-push (via incentives for local producers).

For developers, offtakers and investors it clarifies that Chile is aligning policy to mobilise commercial-scale projects — not just pilot schemes.

For international stakeholders this opens a new Latin-American hub for green-H₂ exports and derivatives, backed by fiscal certainty.

However, final approval through the full chamber and senate is still required — meaning some investor risk remains until the law is fully enacted.

Based on reporting by Argus Media: “Chile adopts amendments to green H₂ tax credit scheme”.