Synthetic Fuel Development in Chile: Evaluating the Regulatory Environmental Framework
Aila Herenda
Chile is poised to become one of the world’s leading countries in synthetic fuel production and development. Punta Areas, one of Chilean Patagonia’s southernmost cities, has proven to be a successful landscape for the installment of wind turbines, allowing for creation of the Haru Oni Plant – the world’s first commercial, industrial scale plant for the development and creation of synthetic fuel.[1] The region’s strong and constant winds, blowing for about 270 days of the year, provide energy that powers the electrolysis that produces synthetic methanol, the basis for electrofuels.[2] The Hari Oni plant is just one of many ways that the country is leading in the creation of synthetic fuels.
The Haru Oni plant is the first plant of its kind to produce e-fuel through a carbon neutral process. The plant aims to provide e-fuel for vehicles types that cannot easily electrify, such as aircrafts, trucks, and ships, thus reducing reliance on fossil fuel hydrocarbons while the transition to electric vehicles takes off.[3] The Magallanes region in southern Chile, with its intense winds and easy exporting access, is perfectly suited geographically to pioneer such a project. The Haru Oni Plant produced its first liters of e-fuels in December of 2022.[4] The plant was developed and is owned by JHIF Global, but its partners and investors include Porsche, Siemens Energy, and ExxonMobil. ExxonMobil contributes the methanol to gas MtG license and technology.[5] Successful regulation of the Haru Oni Plant is integral to serving as a blueprint for future projects, not just in Chile, but worldwide. Sustainability criteria, certification for e-fuels, and policy management will be of the utmost importance.
Due to its quickly evolving nature, the regulatory landscape for synthetic fuel is currently a patchwork of permitting regimes, air-quality and lifecycle emissions rules, and project level environmental impact requirements. Much of the current international regulatory structure of synthetic fuel is two fold: multilateral frameworks that set sustainability and accounting rules and regional law which implements sustainability definitions. The Secunda Coal to Liquid (CTL) complex in South Africa, which is a synthetic fuel plant that uses a coal to liquid process, emitting significant CO2 from both coal feedstock and the energy required to run it gives a good illustration of how traditional CTL facilities may strain local environmental regulations.[6] The regulatory framework of Secunda is governed by site specific atmospheric emission licenses. These licenses faced appeal, scrutiny, and enforcement action from national air quality authorities which have higher standards due to their sulfur, wastewater, and other polluter emissions.[7] The Secunda CTL complex was the world’s largest single emitter of greenhouse gas in 2020, at 56.5 million tonnes of CO2/ year.[8] By contrast, the regulatory framework of the Haru Oni – which uses green hydrogen and direct CO2 capture (a carbon neutral cycle) – has been developed under a mix of renewable energy and green hydrogen policy support, regional public-private partnerships, along with traditional environmental permitting and feasibility review processes.
Haru Oni has thus far properly followed Chile’s environmental regulation channels with approval from regional authorities. Chile’s oversight of Haru Oni has emphasized project-level environmental impact assessment, coordination with regional energy planning in Magallanes, and formal partnerships with state actors as the plant scales from pilot to commercial phases. The plant received EU FRNBO (renewable fuels of non-biological origin) certification, making it the first e-fuel plant outside of the EU to achieve this rigorous standard.[9] This certification requires that renewable fuels of non-biological origin (RFNBOs) are produced from renewable electricity sources and meet a minimum of 70% greenhouse gas savings.[10] On the social efforts side, Haru Oni has run active community engagement efforts from both an economic and educational standpoint. Highly Innovative Fuels (HIF) Chile has worked with over 180 companies based in the Magallanes region.[11] The Haru Oni visitor program hosts local students and communities and scientists from around the world, providing an opportunity to demonstrate the pioneering success and commitment to continuous improvement to help accelerate the adoption of e-fuels worldwide.[12]The Haru Oni plant depends on coordination with the local economy, which allows them to move forward with the energy transition while supporting local development.
On their face, synthetic fuels seem to be a promising alternative to traditional fossil fuels by reducing greenhouse gases and mitigating the impacts of CO2 emissions. While the development of electric vehicles remains a priority, the use of e-fuels offers the existing 1.3 billion vehicles with combustion engines already on the road a potential alternative without requiring a costly change for the consumer, such as purchasing a new car.[13] Theoretically, synthetic fuels could reduce the CO2 emissions of internal combustions by 85%.[14] But, this reduction isn’t projected to be met until 2050.[15] Furthermore, upon a deeper analysis of the Haru Oni plant, the environmental consequences of its development are not so black and white. Local communities in Punta Arenas have vocalized their concern regarding the development of the Haru Oni plant for the population of migratory birds in the area and the increased pollution that transporting the e-fuel will create.[16]
The leading question is how project managers will ensure that in creating green hydrogen for the rest of the world, they are not disrupting and polluting vulnerable local environments. Other existing concerns such as long term environmental impacts on water, biodiversity, land use, and noise are prevalent and are being monitored. Concerns surrounding the isolated grid, port transportation, and structural limits for scaling are prevalent.[17] Proper distribution of benefits are also of concern. Professor Humberto Vidal of the Center of Energy Resources Studies voices his concern about the social, logistical, and regulatory barriers that must be overcome to ensure inclusive and sustainable development. [18] For example, while the plant supported 250 jobs during its construction, they have cut down to only 21employees for day to day operations, leaving more than 200 people unemployed.[19]
Chile is emerging as a global precedent in the regulatory framework of synthetic fuel development by integrating its robust environmental permitting system with forward-looking renewable energy and green hydrogen policies. Ensuring the longevity of Chile’s treasured resources and delicate ecosystems is of the utmost importance for determining what environmental regulations governing production are required to protect the local communities and allow for sustainable success of the projects. Through its pioneer project, Haru Oni, Chile has illustrated that it is indeed possible to advance commercial-scale e-fuel production within a transparent framework that prioritizes environmental impact assessment, regional authority oversight, and community engagement. Since its inauguration, the Haru Oni plant has received over 2,000 visitors from all over the world, with hopes of integrating similar projects globally.[20] Coupling strict compliance requirements with international sustainability certifications (such as EU RFNBO), Chile is not only legitimizing carbon neutral synthetic fuels as a viable pathway for decarbonization but also setting a standard for how other nations can responsibly regulate and scale this emerging sector.
[1]Siemens Energy, Haru Oni: eFuel Plant of the Future, Siemens Energy (Nov. 14, 2022) https://www.siemens-energy.com/us/en/home/stories/haru-oni.html.
[2]Porsche AG, eFuels Pilot Plant in Chile Officially Opened, Porsche Newsroom (Dec. 20, 2022), eFuels pilot plant in Chile officially opened – Porsche Newsroom
[3]Hydrogen Council, Haru Oni: Fuel from Wind and Water, Hydrogen in Action (Oct. 14, 2022), https://hydrogencouncil.com/en/haru-oni-fuel-from-wind-and-water/
[4]HIF Global, HIF Haru Oni (Punta Arenas, Chile), HIF GLOBAL (undated), https://hifglobal.com/locations/hif-haru-oni
[5]Ministerio de Energía (Chile), Prefeasibility Study for a Synthetic Fuel Project in the Magallanes Region Based on Green Hydrogen: Final Report, Project # CH-T1235-P003 (Mar. 28, 2022), https://energia.gob.cl/sites/default/files/ch-t1235-p003_final_report_28-03-2022_vf.pdf
[6]Sasol Ltd., Steam Plant SO2 Compliance Assessemnt Report (Aug. 2025), at 1 (Sept. 29,2025), https://sasol.com/sites/default/files/2025-09/Sasol%20Steam%20Plant%20SO2%20Compliance%20Assessment%20for%20August%202025_Final.pdf
[7]Sasol Ltd., Appeal Decsion in LSA 234243 (Apr. 2024), https://www.sasol.com/sites/default/files/2024-04/LSA%20234243%20Appeal%20Decision_0.pdf
[8]Secunda: Living in the Shadow of the World’s Biggest Carbon Polluter, News24 (Mar. 17, 2020), https://www.news24.com/citypress/news/secunda-living-in-the-shadow-of-the-worlds-biggest-carbon-polluter-20200317
[9]HIF Global, HIF Global awarded ISCC EU RFNBO certification, marking a global milestone in the e-Fuels market, (Oct. 1, 2025), ,https://hifglobal.com/media/news-description/2025/10/01/hif-global-awarded-iscc-eu-rfnbo-certification–marking-a-global-milestone-in-the-e-fuels-market
[10]EcoMatters, Understanding RFNBO Certification of Renewable Fuel, EcoMatters (NL) https://www.ecomatters.nl/services/product-footprint/life-cycle-assessment/understanding-rfnbo-certification-for-renewable-fuel/.
[11]HIF Global, 180 Magallanic companies have joined HIF Chile’s value chain (July 30, 2025), https://hifglobal.com/media/news-description/2025/07/30/180-magallanic-companies-have-joined-hif-chile-s-value-chain
[12]HIF Global, Our Sustainability Journey 2024, (2024), https://hifglobal.com/docs/default-source/default-document-library/our_sustainability_journey_2024_digital.pdf?sfvrsn=caf831c6_1
[13] Porsche AG, eFuels Pilot Plant in Chile Officially Opened, Porsche Newsroom (Dec. 20, 2022), eFuels pilot plant in Chile officially opened – Porsche Newsroom
[14]Porsche Claims Synthetic-Fueled Cars Can Be as Clean as EVs, MotorAuthority (Feb. 22, 2021), https://www.motorauthority.com/news/1131366_porsche-claims-synthetically-fueled-cars-can-be-as-clean-as-evs.
[15]James Morris, Synthetic Fuels Won’t Save the Planet, So Don’t Say They Could, Forbes (Mar. 27 2021), https://www.forbes.com/sites/jamesmorris/2021/03/27/synthetic-fuels-wont-save-the-planet-so-dont-say-they-could/?sh=223546fa69a4
[16]Yasna Mussa, Is Chile Moving Too Fast on Green Hydrogen Production?, The Maritime Executive, June 16, 2024, https://maritime-executive.com/editorials/is-chile-moving-too-fast-on-green-hydrogen-production
[17] Profesor de la UMAG analiza los desafíos de la industria del hidrógeno verde en la Región de Magallanes, CERE UMAG (date unknown), https://cere.umag.cl/profesor-de-la-umag-analiza-los-desafios-de-la-industria-del-hidrogeno-verde-en-la-region-de-magallanes/
[18] Id.