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12-05-2023 | Consumables | News | Article

This is Why Chile Offers Good Conditions for E-fuels

Author: Frank Urbansky

5:30 min reading time

South America is more than just a sleeping giant. When it comes to fuel, what is available is put on the table regionally. A special case is Chile, which is also relying on e-fuels with international and, in particular, German support.

Chile has a special geographical feature. As the country stretches over some 4,200 km like a narrow hose, logistics takes on a special significance - both on the road and by rail. In addition, one third of the population lives in the metropolitan area of the capital Santiago. And: Chile is a mining country - the sector is economically dominant there and has been completely dependent on fossil fuels up to now. But that is set to change.

Ethanol is not an alternative to gasoline. "Bioethanol is negligible because Chile has no corresponding agriculture that could provide these quantities," explains Christoph Meyer, Senior Project Manager Energy, Mining & Sustainability at AHK Chile. The same applies to biogas. Although there is a livestock industry, the usable quantities here are also marginal. Liquefied petroleum gas (LPG) is also rare. It is more likely to be found in households for heating and cooking. Meyer puts the annual number of new LPG vehicle registrations at 6,000 vehicles out of a total population of 5 to 6 million. Currently, vehicles must be a certain minimum age to be converted to natural gas. This is now to be set at seven years, which could make LPG conversion interesting for existing cars. According to Meyer, this would be a real, cheaper alternative to electric cars.

Natural gas (CNG) plays a small role, but tends to be imported from Argentina. Chile does have its own oil and natural gas production. But this is mainly found in the south of the country, where refineries meet demand. 

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South America Is More Creative with Fuel than Europe

South America is more than just a sleeping giant. Brazil has a powerful national economy and Argentina, although it has been hit by repeated crises, has shown clear signs of recovery on each occasion, and the northern part of the continent is rich in raw materials. In the case of fuel, every country is making best use of the available options and resources. While Brazil and Paraguay rely on bioethanol, Argentina is focusing on gas and biodiesel, and Colombia is fully self-sufficient in oil and gas. The exception in this regard is Chile. A report on the country's efforts to develop e-fuels can be found online on

Electromobility struggling to gain acceptance in the private sector

Chile has a national electromobility strategy. In 2020, 6,000 new vehicles were registered - primarily in the Santiago metropolitan area. By 2035, the share is to be significantly expanded and also extended to light commercial vehicles. The focus is also on public transport and fleets. Santiago had more than 1,700 electric buses on the road at the end of 2022. That, Meyer said, is the largest e-bus fleet outside China in one city.

There is a special subsidy program for cabs to switch to electric mobility, which also applies to public fleets, such as the official vehicles of ministries. However, this does not exist for private passenger cars. That's why, according to Meyer, electromobility will have a hard time catching on in the private sector. This is also due to the infrastructure. Of the 800 charging stations nationwide, 200 are located in the Santiago region. Ultimately, however, it is also due to the purchase price, even though electricity is inexpensive at 13 to 14 cents per kWh compared to gasoline and diesel (1.40 euros per liter). Renewable energies currently account for 40 % of the electricity mix, and this share will continue to grow.

For vehicles, Chile is also completely dependent on imports. A last GM car plant in the north of the country was abandoned about ten years ago. On the other hand, there are bus manufacturers such as Reborn electric that convert vehicles. There is also Moveenair for passenger cars. Currently, Meyer said, it's not legal, but it would probably be made possible again. There are already electric vehicles in inner-city logistics, mostly Chinese models.

Chile is an ideal location for electrolysers

Because Chile is rich in both wind and sun, it is an ideal location for electrolysers. A long-established process for the production of hydrogen that is still efficient but not often used anymore is the electrolysis of water. By using electrical energy and after adding small amounts of catalytically active acid, water is split into hydrogen and oxygen. Hydrogen could therefore play a role in the mobility of the future here, unlike in other countries on the continent.

One area high on the conversion agenda is mining. Meyer cites dump trucks, of which there are 1,500 in the country, and which consume about 1,000 liters of diesel per hour. For a short time, diesel-type e- or synfuels could fill the gap. Liebherr is one of the partners in a research project to convert mining trucks. The Fraunhofer-Gesellschaft is currently working on this project together with Liebherr and Linde. The goal, however, is pure hydrogen operation, he says.

Hydrogen as a fuel would also be an idea for the inner-city bus fleet in Santiago, but also for intercity buses and the transport of mining personnel or the forestry sector. For this, he said, there would have to be a hydrogen strategy in the next few years, at least by 2028 at the latest, which would also consider synthetic fuels for trucks. "Synthetic fuels from H2 in particular are becoming a huge issue in the aviation industry and shipping, because you can also make methanol or ammonia from it. We have such good conditions in Chile that we could export synthetic fuels to Europe on a large scale," Meyer said. German companies are already involved in these strategies, such as Enercon as a wind turbine manufacturer, RWE or ThyssenKrupp as a plant manufacturer. On the electrolyzer supplier side, Enapter and Siemens are active.

Porsche's e-fuel project in Chile

Porsche, Siemens Energy and other, mostly international companies want to produce e-fuels at the Haru Oni pilot plant operated by Chilean company HIF in southern Chile. This is to become the world's first large-scale integrated and commercial plant. The pilot plant is expected to produce 130,000 liters of nearly CO2-neutral e-fuel annually – because it is produced exclusively with wind energy, water and CO2 – starting in 2023. "The Haru Oni project in Patagonia, which is being run by Siemens and Porsche, highlights one way of using wind and solar energy to produce hydrogen by means of electrolysis. This can be converted to e-methanol using CO2 extracted from the atmosphere or it can be used directly in the form of green hydrogen", says Professor Dr.-Ing. Wilhelm Hannibal of the South Westphalia University of Applied Sciences in his guest commentary E-fuels and Hydrogen in Mobility Conserve the Earth's Resources from MTZ worldwide 9-2022.

"The plant has been running in test mode since its opening in December 2022. The first quantities of fuel for test purposes have already been produced," explains Hermann-Josef Stappen, press spokesman for research and development at Porsche. The electricity from a 3.4 MW wind turbine is first used to produce green hydrogen by electrolysis. Together with CO2, this produces methanol. The methanol-to-gasoline process then turns it into a raw gasoline for gasoline engines.

The fuel is produced and supplemented with anti-knock additives so that it complies with the current gasoline standard DIN EN228. It can thus be used directly or blended with fossil fuel. The forecast 130,000 l per year will be used by Porsche in the Porsche Mobil 1 Supercup as well as in other lighthouse projects - such as the Porsche Experience Centers. "In around three years, it should be possible to produce around 55 million l of e-fuels in further plants in Chile. In 2028, the target is 550 million l," says Stappen. These quantities could then be shipped to Europe by tanker. How they will then be used has not yet been decided, he said.


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