The dispute revolves around energy pricing for HIF Global’s planned green hydrogen and synthetic fuel production facility in Paysandú. The company seeks electricity at approximately $40 per megawatt-hour, roughly half of UTE’s acquisition cost of $80 per megawatt-hour. Environmental group Paysandú Soberano UPM2 NO estimates this arrangement would cost the Uruguayan state between $80 million and $100 million annually, totaling $2 billion over 20 years. The subsidy translates to $20,000 per month for each of the 300 permanent jobs HIF promises, with an additional 1,400 temporary construction positions.
Local opposition centers on environmental and economic concerns beyond the energy subsidy. The environmental coalition argues authorities misrepresent the project as a green hydrogen plant when documentation shows a synthetic fuel and methanol refinery would be constructed along the Uruguay River. The group warns of experimental industrial risks including methanol handling accidents, potential river contamination affecting tourism and fishing, and threats to coastal activities. They delivered documentation to the departmental council requesting verification of their 17,200 petition signatures to trigger a popular initiative allowing Paysandú residents to vote on the project.
The memorandum between the previous government and HIF Global, signed February 28, 2024, remained undisclosed despite public information laws, costing the Uruguayan state $830 daily in fines. Critics note the facility would require UTE to construct dedicated power infrastructure ensuring 24-hour energy availability. The Chamber of Industries separately warned that projects demanding subsidized energy while operating in free trade zones contribute to competitiveness concerns facing domestic manufacturers. HIF Global has not publicly responded to the latest criticisms as negotiations remain stalled between the company, UTE, and government officials.
This article was curated and published as part of our South American energy market coverage.
