TotalEnergies H2 dropped its USD $16 billion green hydrogen and ammonia project in Chile on Thursday ending a historic environmental evaluation process.
The USD $16 billion project also represented the largest investment under the government of President José Antonio Kast, according to data from the System of Environmental Evaluation.
The Ministry of Energy had previously identified the initiative as the largest investment ever entered into Chile’s System of Environmental Evaluation. Antoine Liane, general manager of TotalEnergies H2 in Chile, submitted a letter to the regional Environmental Evaluation Service to withdraw the proposal.
The Servicio de Evaluación Ambiental declared the initiative officially withdrawn on Friday, dealing a heavy blow to the fledgling green hydrogen industry and the investment figures boasted by the System of Environmental Evaluation.
“[L]amentablemente hemos concluido que las condiciones de mercado y la demanda por moléculas verdes no han evolucionado lo suficiente como para asegurar contratos de compraventa de largo plazo en condiciones económicamente viables,” said Antoine Liane, general manager of TotalEnergies H2 in Chile, in his letter to the regional Environmental Evaluation Service.
The project, named H2 Magallanes, was originally filed on May 5, 2025. It planned to utilize wind-powered electrolysis, atmospheric nitrogen, and desalinated seawater to produce up to 1.9 million tons of green ammonia annually in the commune of San Gregorio.
TEC H2 MAG SpA stated its willingness to withdraw from the environmental impact assessment procedure through the filing submitted by its representative, Antoine Liane, via a letter dated November 12, 2026, which was accepted by the resolution of the Commission of Evaluation of Magallanes and the Chilean Antarctic and concluded the procedure initiated with the submission of the Environmental Impact Study on May 5, 2025. The initiative contemplated a 25-year lifespan.
Did You Know? The H2 Magallanes initiative was slated to construct more than 600 wind turbines, a maritime terminal, a desalination plant, and five data centers across the Magallanes and Chilean Antarctica region.
Market Pressures Behind the Withdrawal
Liane noted that equipment costs failed to drop as anticipated, rendering production expenses uncompetitive. In September 2025, in an interview with Diario Financiero, Liane acknowledged that “aún siendo muy optimista, hay una probabilidad mayor que el proyecto nunca exista”, according to Antoine Liane.
“[L]os costos de los equipos no han disminuido según lo previsto, lo que ha llevado a que los costos de producción no sean competitivos y que una inversión de la magnitud del proyecto H2 Magallanes resulte económicamente viable,” said Liane.
This market reality follows the February cancellation of AES Andes’ USD $10 billion INNA project in the Antofagasta Region.
Grupos locales y conservacionistas alertaron sobre vacíos de información
Local residents and conservation groups closely monitored the initiative during its extended environmental review.
Local groups such as the Magallanes Hydrogen Citizen Panel repeatedly flagged information gaps and cumulative ecological pressures. They argued that regional development plans must prioritize local biodiversity over speculative economic promises, noting that the outcome confirms warnings raised from the outset about information gaps and real industry uncertainties.
“Reiteramos la importancia de que el desarrollo de Magallanes se construya a partir de información suficiente, participación ciudadana y una mirada de largo plazo, que considere las particularidades de sus territorios y la protección de sus ecosistemas,” said the Magallanes Hydrogen Citizen Panel.
What the H2 Magallanes project cost and promised
What was the total estimated investment for the H2 Magallanes project?
The project represented an estimated investment of US$16 billion, making it the largest investment ever entered into Chile’s System of Environmental Evaluation.
Where was the green ammonia plant supposed to be built?
The facility was planned for the commune of San Gregorio in the Región de Magallanes y de la Antártica Chilena.
How many jobs was the project expected to create?
Construction was projected to generate an average of 6,000 jobs with a peak of 10,000 workers, while ongoing operations would employ around 700 people on average, reaching a ceiling of 1,000.
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