EU-Chile Trade Agreement Focusing on Hydrogen and Renewable Electricity Awaits Council Authorization

By July 5, 2023 2   min read  (338 words)

July 5, 2023 |

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Charging up a greener future, one agreement at a time.

The European Commission (EC) is progressing towards the ratification of the Advanced Framework Agreement (AFA) and Interim Trade Agreement (iTA) with Chile, marking a significant upgrade to their existing bilateral relationship. The modernized agreements aim to enhance political dialogue, intensify cooperation, and bolster trade and investment, with a notable emphasis on green hydrogen.

These modernized agreements, developed as part of the European Economic Security Strategy, will solidify trade relations between the EU and Latin America’s fifth-largest economy. It is estimated that nearly 100% of EU exports will benefit from tariff-free conditions, potentially boosting EU exports to Chile by up to €4.5 billion.

One of the key features of the new agreement is the accentuated focus on hydrogen trade. According to the agreement, hydrogen will freely cross borders, thereby ensuring non-discriminatory access to Chile’s burgeoning hydrogen market. EU companies will be able to invest in renewable electricity or hydrogen production capacity and will have equal access to electricity grids.

To streamline hydrogen trade, the EU and Chile will work towards the harmonization of certification schemes for renewable fuels, address trade barriers for hydrogen, and promote hydrogen production. This strategic cooperation in hydrogen will undoubtedly fuel the EU’s transition to a greener economy.

In addition to the focus on hydrogen, the agreement provides the EU with sustainable access to Chile’s raw materials, such as lithium, which are vital for realizing the Green Deal ambitions. The agreement ensures that environmental impact assessments are carried out for any raw materials project with potential environmental impacts. It also promotes responsible mining practices and the sustainability of raw materials value chains.

The agreements with Chile also incorporate strong commitments to human rights, sustainability, and innovation, while extending political dialogue on international peace, justice, and security. There is an ambitious chapter on Trade and Sustainable Development, confirming both Parties’ commitment to International Labour Organization standards and the Paris Agreement.


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