MercoPress. South Atlantic News Agency

Uruguay and HIF reach agreement for green hydrogen complex

Signing the documents on behalf of the Uruguayan Government was Presidential Secretary Alejandro Sánchez

The Government of Uruguay and the multinational firm HIF Global have signed a Memorandum of Understanding (MoU) to develop a synthetic fuels project in the department (province) of Paysandú, representing a record-breaking investment of over US$5.3 billion.

The “HIF Uruguay” initiative seeks to position the country as a global exporter of carbon-neutral energy.

The agreement was finalized last week at Montevideo's Executive Tower by Presidential Secretary Alejandro Sánchez and HIF's Víctor Turpaud and Martín Bremermann.

The project is designed to produce e-combustibles (synthetic fuels) by combining green hydrogen, generated via renewable energy, with captured carbon dioxide (CO2).

The facility will be built in modules, potentially reaching a total output of 880,000 tons per annum, with initial exports slated for 2029, targeting European and Asian markets. Once fully operational, the project is expected to generate approximately US$1.012 billion in export revenues.

The complex will integrate several high-tech industrial units. The Electrolysis Plant will produce green hydrogen using renewable electricity; then the CO2 Capture Unit will harvest carbon from industrial and biomass sources. Additionally, synthesis units will convert hydrogen and CO2 into e-methanol, and subsequently into synthetic e-gasoline and e-liquefied gas. The final products will be transported by rail to the Port of Montevideo for global shipment.

Despite the economic promise, the project has sparked significant local and international debate. Environmental groups and local residents have raised alarms over the massive volume of freshwater required for the electrolysis process. Demonstrations have been reported across Uruguay and in neighboring Argentine cities across the Uruguay River, with critics labeling the impact as “not so green.”

HIF has acknowledged potential negative social perceptions and impacts on the local landscape, but maintains that the project's global decarbonization benefits are a top priority. The company estimates that the construction phase will create 1,400 jobs, followed by 300 permanent full-time positions once the plant is operational.

To manage the project's scale and controversy, two oversight bodies have been established: a High-Level Committee, comprising the Secretary of the Presidency and the Ministers of Economy, Industry, Environment, and Transport; plus a Technical Monitoring Committee, tasked with daily operational coordination between the government and HIF to ensure compliance and progress.

In response to growing environmental concerns, HIF Global has introduced several specific design adjustments following the “Environmental Location Feasibility” (VAL) approval granted by the Uruguayan Ministry of Environment in late 2024 and mid-2025.