Snapshot: HIF’s US$6bn Uruguay e-fuels project

E-fuels pioneer HIF Global is advancing its US$6bn Paysandú project in Uruguay.

The development phase initiative – planned for Paysandú department – is designed to produce sustainable fuels from renewable energy and captured carbon dioxide. 

Biofuels producer Alur, a unit of state oil company Ancap, is expected to supply some of the CO2 the plant is projected to need.

An associated agreement was inked recently, governing the interaction – covering areas such as reference prices, infrastructure and operating details – between HIF’s planned e-fuels plant and Alur’s nearby Paysandú bioethanol facility.

Engineering and permitting phase work – including environmental impact study preparation – continues, an HIF spokesperson told BNamericas in an emailed statement. 

ALSO READ: HIF Global working to ramp up e-fuels production

According to a past study published by multilateral lender IDB, synthetic jet fuel represents the single biggest potential export market for Uruguay in the sphere of green hydrogen and its derivatives in terms of revenue.

Last year HIF signed an MOU with aircraft manufacturer Airbus to advance e-fuels for aviation. The MOU provides a framework for negotiation of definitive agreements in relation to four key workstreams: technical, project development, commercial and advocacy.

Meanwhile, with biofuel and forestry industries, Uruguay – which has published a 2040 green hydrogen roadmap – has ready access to biogenic carbon dioxide. In addition, the country generates almost all its power from wind, hydro, biomass and solar plants.

Last year the HIF project was selected by Alur and Ancap in the framework of an initiative to leverage and monetize carbon emitted by the Paysandú plant, which has capacity to produce 70Ml of bioethanol a year, a rate that requires 200,000t of grain.

Overall in Uruguay, according to energy ministry information, four publicly announced land-based e-fuels projects are in the development phase. These are the HIF project, Enertrag’s Tambor (e-methanol for export), Kahiros (hydrogen for the local heavy transport sector) and H24U (hydrogen for the local heavy transport sector).

Several solar PV plants planned for Paysandú – and mention “green fuel” producers in their respective documentation – entered the environmental review system last year.

ALSO READ: Uruguay clean energy projects seeking environmental green light

An auction of offshore blocks is planned for wind power generation for production of hydrogen and derivatives. Offshore and onshore electrolysis are envisaged options, the former potentially involving electrolysis platforms or floating production and storage vessels. 

Uruguay’s green hydrogen roadmap states that, by 2040, domestic production could reach 1Mt/y, requiring installation of 18GW of renewables capacity and 9GW of electrolyzers. 

Regulatory work has got underway and a decree on tax benefits is planned, according to an energy ministry update.

A central challenge of green hydrogen developers in Uruguay and elsewhere is driving down production costs and securing offtakers, along with other hurdles that need clearing in spheres such as infrastructure, certification and regulations.

In Latin America, HIF has an operational small-scale plant, Haru Oni, in Chile, the first of its kind in the world. In Chile, utility-scale HIF project Cabo Negro and associated wind farm Faro del Sur are among those in the permitting phase.

Brazil is also on HIF’s radar in the region after signing a land reservation contract with Port of Açu, one of Brazil's main ports, to develop a facility to produce up to 800,000t/y of e-methanol. 

HIF Paysandú metrics 

Price tag

The production facility is expected to cost around US$4bn, with renewable energy and transmission infrastructure expected to require another US$2bn. The power supply component outlay could be shouldered by HIF or a third party. An associated decision is pending.

Production

The HIF plant is designed to produce 700,000t/y of e-methanol (from which other e-fuels are produced). The plant will require abundant clean energy and some 900,000t/y of carbon dioxide.

HIF-Alur agreement

Under the agreement, Alur will provide 150,000t/y of captured carbon dioxide. The accord includes a commitment by Alur to provide a constant supply.