Uruguay to Host $6 Billion Green Hydrogen Project in Paysandú

Uruguay is set to make a monumental leap in renewable energy with the announcement of a $6 billion green hydrogen and synthetic fuels project in Paysandú. This ambitious initiative, spearheaded by state-owned oil company Ancap through its subsidiary Alcoholes del Uruguay (ALUR), in collaboration with HIF Global, aims to produce 700,000 tons of renewable fuels annually.

Historic Milestone for Uruguay’s Energy Transition

Diego Durand, Ancap's interim president, hailed the project as “historic” and emphasized its transformative potential. “It is a bigger project than that of UPM and will mean development for Paysandú and the whole country,” he said.

The project will significantly boost the local economy, creating over 3,000 jobs during the construction phase and 300 permanent positions once operational. Moreover, it aligns with Uruguay’s broader sustainability goals by contributing to greenhouse gas reductions and decarbonizing over 150,000 vehicles with e-fuels.

Key Environmental and Economic Impacts

The plant will leverage biogenic CO2, with ALUR set to supply 150,000 of the 900,000 tons needed annually. By producing renewable fuels, the project is poised to reduce Uruguay's carbon footprint while positioning the nation as a leader in green hydrogen and synthetic fuels in the region.

Durand emphasized the broader implications of this initiative: “This project not only impacts Uruguay but also strengthens its standing in the global push for sustainable energy solutions.”

Challenges and Political Backdrop

While the announcement is groundbreaking, it comes amidst political turbulence. Ancap’s former president, Alejandro Stipanicic, resigned over disagreements with the Executive Branch regarding the state’s participation in the project. Ultimately, Ancap chose to forgo a 30% stake in the venture, a decision that has drawn criticism from opposition leaders, who see it as a missed opportunity for the state.

Next Steps Toward Green Hydrogen Leadership

The project now awaits land use approvals and environmental viability assessments. Durand reassured stakeholders that progress would continue with the Environmental Impact Study and detailed engineering plans.

Once completed, HIF Global's green hydrogen plant will place Uruguay at the forefront of sustainable energy in Latin America, marking a significant step toward global energy transformation.