Under a head of agreement, HIF plans to supply e-methanol produced at its planned 1.1GW project in Uruguay to German eFuel One, which is looking to set up an e-gasoline project in Lower Saxony.

While the deal sets a framework for negotiating definitive offtake, it does not yet constitute a binding supply agreement.

The plans would see HIF e-methanol imported into Germany through the Port of Hamburg, with German eFuel One expected to upgrade the chemical into e-gasoline and other fuels for transport applications.

E-methanol produced by HIF’s $5.3bn Paysandú project in Uruguay is planned to meet EU rules on renewable fuels of non-biological origin (RFNBO).

The 100,000-tonne volume represents a modest share of global methanol trade but is significant in the still-nascent e-fuels market.

Christian Hanke, CEO of German eFuel One, said the deal was establishing the foundation for “industrial scale” e-fuel production.

German eFuel One’s project will use methanol as a feedstock to produce up to 75 million litres of e-gasoline per year. It plans to begin commissioning the project at the end of 2028.

However, getting the scheme up and running faces an unclear timeline. HIF secured environmental approval from the Uruguayan government in November, with engineering design still ongoing.

HIF has not revealed an estimated start-of-production date.

The company already exports small volumes from its Haru Oni pilot plant in Chile, supplying customers including Porsche in the UK.

HIF Chief Commercial Officer, Diego Fettweis, said the deal with German eFuel One was advancing the clean-up of global transport and industry.

Synthetic fuel projects in Europe have struggled to progress quickly due to high renewable power costs.

Regions like South America, with growing renewables installations but modest power demand, are being viewed as key potential suppliers for green hydrogen and derivatives.