Chile Energy Ministry Denies Formal E10 Ethanol-Gasoline Blend Proposal Despite Internal Memo on $107M Annual Savings

Documents reviewed by Reuters show Energy Ministry officials drafted a memo proposing Chile adopt E10 fuel—90 percent gasoline blended with 10 percent ethanol—which could cut government fuel supply costs approximately $107 million annually. The state oil company ENAP would require $10.8 million in infrastructure modifications to refineries, terminals and storage facilities to accommodate the transition, with costs partially offset through lower carbon tax payments. A U.S. Grains Council briefing cited in the reporting suggests Chile could implement E10 or even E15 blends by 2030 through gradual rollout.

The Energy Ministry issued a statement the same day declaring it “has not made any formal proposal, internal or external, on this matter” and had not received media inquiries before publication. The denial establishes distance from Reuters’ reporting while not disputing the memo’s existence, indicating the analysis occurred without rising to official policy status.

Chile imported 181,000 barrels daily of crude in 2025 according to OPEC data, making it one of Latin America’s largest oil importers. The country remains among the few regional markets still using MTBE as a gasoline octane additive rather than ethanol blends widely adopted across the continent. Brazil’s $20 billion ethanol industry, the world’s second-largest, supplies flex-fuel vehicles running on blends exceeding 30 percent ethanol. Chile currently sources 85 percent of gasoline from the United States, with potential ethanol imports coming primarily from Argentina and Bolivia.

Finance Minister Jorge Quiroz stated in March “we ran out of money” when the administration stopped absorbing international oil price volatility through the MEPCO fuel stabilization mechanism, instead passing $370 per liter gasoline and $580 per liter diesel increases to consumers. The move marked an early economic flashpoint for the Kast government as fiscal constraints collided with energy security concerns.

The ministry published a May 2026 roadmap for fuel source diversification and carbon emissions reduction through 2030 including fuel blending provisions. Earlier government energy agendas from 2022-2026 contemplated reviewing technical feasibility of ethanol percentages in ENAP-refined gasoline. The regulatory and technical foundation for E10 adoption exists despite the ministry’s disclaimer, leaving implementation timing dependent on political decisions amid continued oil market uncertainty. Chile lacks domestic ethanol production due to insufficient agricultural land for feedstock cultivation, meaning any transition would replace one import dependency with another as the ministry memo acknowledged.