HIF and Uniper sign LOI to negotiate eFuels offtake agreements
HIF Global, HIF Chile and Uniper Global Commodities have signed a Letter of Intent (LOI) to negotiate binding offtake agreements for the sale and purchase of eFuels from the commercial plants under development in Magallanes, Chile.
Electricity based fuels, or eFuels, are clean, carbon-neutral fuels produced from renewable, green hydrogen and carbon dioxide taken from the atmosphere. eFuels have the same chemical properties as fossil-based fuels and, as a result, can be used as direct substitutes in existing motors and infrastructure. One version of eFuel is a carbon-neutral methanol (eMethanol), which can be used as a complete replacement for their fossil fuel counterparts in industrial or petrochemical applications, and as a carbon-neutral fuel for the shipping industry.
Pursuant to the LOI, HIF Global and Uniper will explore further opportunities for Uniper to purchase up to approximately 2 million tons per year of eMethanol from four commercial plants in Chile, representing 50% of the production from each plant.
Production from the first commercial plant in Chile is expected to begin in 2025 with 150,000 tons per year of eMethanol. Production from the second commercial plant is expected to begin in 2027 and will be the first industrial scale plant with 1.3 million tons per year of eMethanol. Each subsequent industrial scale commercial plant is expected to begin production after 2027.
The eFuels will be certified under the recognized international standard of emission reductions, a fundamental requirement to comply with European decarbonization regulations.
“eFuels based on green hydrogen and recycled carbon dioxide are critical to accelerating the decarbonization of the transport sector. Due to the exceptional renewable energy resources in the area, our sites in Magallanes, Chile, can produce large volumes of highly competitive eFuels for sale worldwide. Uniper is a leader in innovative, lower-carbon solutions with distribution networks in key decarbonization markets. Our eFuels LOI provides a framework to negotiate definitive agreements for our products and confirms the benefits of eFuels to the global market,” said HIF Global COO Clara Bowman.
“One of Uniper’s major goals is the effective decarbonization of other industries as well as its own, while still being able to provide security of supply. Therefore, Uniper is building up a portfolio of H2 products on a global scale by originating, transporting and finally supplying customers mainly in Europe, North America and Asia in the future. The HIF project is a very promising opportunity to source green eMethanol from one of the most competitive locations in the world. We are excited to jointly cooperate with and potentially offtake from HIF in the Magallanes region in Chile,” said Uniper CCO Niek den Hollander.
