Green Hydrogen’s First Test: Namibia, Chile and India’s Industrial Gamble

Hydrogen will not scale as a slogan. It scales only when cost curves meet contract discipline and infrastructure sequencing.

Green hydrogen has entered its first era of accountability. For years, the story was dominated by aspiration: abundant sun and wind would make the molecule cheap, export markets would appear, and heavy industry would switch by force of climate arithmetic. In 2026 the narrative collides with engineering and balance sheets. Hydrogen is not a fuel that arrives at a terminal by decree. It is a manufactured molecule—expensive to make, difficult to move, and unforgiving of weak infrastructure.

The decisive question is narrow and brutal. Can projects deliver a competitive, reliable molecule at scale, under contract, on time? If they can, hydrogen becomes an industrial platform. If they cannot, it remains a high-status pilot sector: politically celebrated, financially stalled.

Three countries illustrate the test with unusual clarity. Namibia must prove it can build an export platform from sparse infrastructure without social backlash. Chile must prove it can convert early-mover status into predictable permits, grid links and port capacity. India must prove that policy ambition can translate into repeatable demand, standardised contracts and a domestic industrial supply chain at scale.

Cost Is a System

Hydrogen economics are often reduced to a single number, as though the molecule has one global price. It does not. It has a cost structure. Four variables dominate: the price of renewable electricity, electrolyser and balance-of-plant capital costs, utilisation (how many productive hours per year the equipment runs), and logistics (conversion, storage, shipping and terminal handling).

The most underappreciated variable is utilisation. Wind and solar are variable. Electrolysers are capital equipment. Low utilisation inflates unit costs and delays payback. Engineering solutions exist—hybrid wind-plus-solar portfolios, firming, storage and curtailment management—but each introduces complexity. This is why hydrogen is rarely cheapest where renewables are simply abundant. It is cheapest where renewables are abundant and system integration is competent.

That competence is an institutional asset. Hydrogen punishes fragmentation. A country can have world-class wind and still lose to a rival with slightly weaker resources but faster permits, clearer grid rules and credible terminals.

Contracts, Not Headlines

Hydrogen does not bank easily on spot markets. The molecule is costly to produce and even costlier to move. Bankability therefore depends on long-term offtake contracts with credible counterparties: fertiliser producers, shipping firms, utilities, steelmakers or traders. The complication is that many buyers are not yet willing to pay the full green premium at scale, especially when fossil alternatives remain cheaper or politically protected.

As a result, the market is bargaining hard. Buyers want delivery guarantees, certification clarity and price formulas that do not leave them permanently overpaying relative to fossil benchmarks. Developers want bankable floors and protection against policy drift. Governments are pulled into the middle, asked to provide stabilisation instruments—auctions, contracts-for-difference, guarantees and regulated demand—without creating a permanent subsidy industry.

In 2026 the first test is therefore a contracting test: whether a repeatable template emerges that allocates risk cleanly, so projects can scale without bespoke political negotiation each time.

Namibia’s Export Platform

Namibia’s hydrogen strategy is best understood as an attempt to build an export platform in the manner of a new commodity—except this commodity must be manufactured. The export vector is often not pure hydrogen, but derivatives such as ammonia, because logistics are more tractable and terminal infrastructure has workable analogues.

Namibia’s binding constraints are not ideological; they are sequencing and legitimacy. Export hydrogen requires a port capable of handling ammonia safely, corridors for heavy equipment, water systems—often desalination—and a credible framework for land use, environmental baselines and benefit-sharing. These are not peripheral issues. They are the conditions under which capital commits.

Namibia’s advantage is clarity of purpose. Its vulnerability is execution risk: sparse infrastructure, long lead times and the need to prove local value capture rather than merely promise it. In hydrogen, perception is not public relations. It is political durability. A platform that becomes a national controversy will not ship molecules on schedule.

Chile’s Permitting Clock

Chile offers a different laboratory: strong renewable potential and early national strategy, but projects constrained by process frictions. Here the binding constraint is not scarcity of resources. It is the predictability of permits, grid access and port readiness.

Large hydrogen projects are multi-agency by design. Environmental approvals, transmission corridors, maritime safety and consultation requirements all intersect. When timelines become uncertain, investors reprice risk. Contractors raise contingency margins. Offtake counterparties hesitate to sign long tenors. Delay becomes a cost multiplier rather than a calendar inconvenience.

Chile’s advantage is institutional capacity relative to many peers and a credibility profile that attracts long-horizon capital. Its vulnerability is that early leadership can be lost through administrative drift. Hydrogen capital is mobile. Investors do not need Chile specifically; they need a jurisdiction where the permitting clock is legible.

India’s Demand Machine

India’s hydrogen story is structurally different. It is not primarily an export narrative. It is a domestic demand narrative: decarbonise fertiliser, refining and heavy industry while building a manufacturing ecosystem for electrolysers and related equipment. In that model, the asset is not coastline alone. It is scale—of demand, procurement and industrial clustering.

India’s binding constraint is contract standardisation. Domestic demand is powerful only if it is organised. Without clear demand signals—mandates, auctions, procurement templates and a credible certification regime—projects remain pilots rather than industries. A market of many small pilots does not deliver cost reduction quickly enough; scale does.

There is also a governance trade-off. Subsidies can accelerate early investment, but can invite rent-seeking if measurement is weak. The sector therefore needs not only incentives, but verification: performance-linked procurement, credible certification and consequences for non-delivery.

The Strategic Choice for the Global South

For the Global South, hydrogen is a political economy fork. In one path, hydrogen becomes a new extractive cycle: land and water pressures are local, volatility is local, but value capture is offshore through imported equipment, foreign offtakers and limited domestic industrial depth. In the other path, hydrogen becomes an industrial upgrade: cleaner fertiliser, local processing, domestic energy security and export capability anchored in national value chains.

The difference is policy architecture. Export strategies can work, but must not repeat the old model where the host country supplies the geography and absorbs the risk. Domestic-demand strategies can also work, but must avoid subsidy dependence and low-quality buildouts. In both cases, the discipline required is the same: transparency, credible contracts and infrastructure sequencing.

Hydrogen will not be decided by announcements. It will be decided by who can build an integrated system that can be financed repeatedly, not once. Namibia, Chile and India are not merely building molecules. They are testing whether renewable advantage can be converted into industrial power without repeating the historic pattern: resources exported, risk retained, value captured elsewhere.