Metanol Verde

Project #: CH-T1235-P003
Final Report
Methodologies and Results of Activities 1 to 13
"Prefeasibility study for a synthetic fuel project in

the Magallanes region
At the request based on
of the Inter-American green hydrogen"
Developmen
At the request of the Inter-American Development Bank (IDB)
March 15, 2022

Table of Contents
List of Figures and Tables .............................................................................................................. 5
Abbreviations ................................................................................................................................ 8
1. Executive Summary ............................................................................................................. 10
2. Activity N° 1: Technical Analysis .......................................................................................... 21
2.1 Definition of synthetic fuels ........................................................................................ 21
2.2 Description of production routes for synthetic liquid fuels from hydrogen ............... 22
2.3 Syngas route ................................................................................................................ 22
2.4 Methanol route ........................................................................................................... 23
2.5 Fuel and technology selection for Magallanes plant .................................................. 24
2.6 Technical key performance indicators ........................................................................ 25
2.7 Comparison of 8 fuels (Technology fact sheets summary) ......................................... 26
2.8 Selected European Power-to-liquid European projects .............................................. 27
2.9 Selected Power-to-liquid projects in rest of the world ............................................... 30
3. Activity N° 2: Commercial Analysis...................................................................................... 31
3.1 Benchmark of synthetic fuel projects in Chile............................................................. 31
3.2 Analysis of local and global market for synthetic fuels ............................................... 32
3.2.1 Penetration factor for synthetic fuels ......................................................................... 32
3.2.2 Growth rate for liquid fuels demand .......................................................................... 34
3.2.3. Estimates of Chilean and Global Market size for synthetic fuels ............................... 38
3.3 Analysis of potential off-takers for synthetic fuels ..................................................... 39
3.4 Potential players in the oil & gas sector and in the commodity traders sector.......... 41
3.5 Analysis of existing infrastructure & logistics in Magallanes ...................................... 43
3.6 Main barriers for the development of a synthetic fuel market .................................. 45
3.6.1 Economic Barriers ................................................................................................ 45
3.6.2 Resources Barriers ............................................................................................... 46
3.6.3 Regulatory Barriers .............................................................................................. 50
3.7 Conclusion ................................................................................................................... 51
4. Activity 3: Matrix Evaluation ............................................................................................... 52
4.1 Description of evaluation matrix to compare synth fuels ........................................... 52
4.2 Definition of selected criteria and weight ................................................................... 53
4.3 Scoring summary for the 8 fuels ................................................................................. 55
4.4 Recommendations for the specific technical solution and sizing for the process plant
59
5. Activity N° 4: Technologies & providers .............................................................................. 63
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5.1 Overview of equipment and providers ....................................................................... 63
5.2 Description of electrolysis technologies ..................................................................... 64
5.3 Description of carbon capture technologies ............................................................... 71
5.4 Description of methanol technologies ........................................................................ 76
5.5 Conclusions ................................................................................................................. 82
6. Activity N° 5: Infrastructure & supplies ............................................................................... 83
6.1 Description of utilities ................................................................................................. 83
6.2 Timeline of required tasks for the implementation of the project ............................. 90
6.2.1. Health, Safety, Environment, Community & Permits challenges .............................. 93
6.2.2. Contractual challenges .............................................................................................. 95
6.2.3. Ownership over the resource challenges .................................................................. 96
6.3 Conclusion ................................................................................................................... 97
7. Activity 6: Design parameters ............................................................................................. 99
7.1 Equipment lists for the main equipment .................................................................. 100
7.2 Technical hypothesis for the design .......................................................................... 102
7.3 Production and consumption figures ........................................................................ 105
7.4 General arrangement drawings for The Plant and subsystems ................................ 108
8. Activity N° 7: Cost Estimation............................................................................................ 114
8.1 Capex & Opex estimation Class 5 .............................................................................. 114
8.2 Economic assumptions .............................................................................................. 118
9. Activity N° 8: Interviews Analysis ...................................................................................... 119
9.1 Validate assumptions and hypotheses...................................................................... 119
9.2 Adjustments to the business model.......................................................................... 120
9.3 Validate barriers and challenges. .............................................................................. 120
10. Activity N° 9: Economic Analysis ................................................................................... 122
10.1 Calculation of LCOM .................................................................................................. 122
10.2 Backup energy costs impacts on the LCOM .............................................................. 125
10.3 Economic results analysis .......................................................................................... 125
10.4 Sensitivity analysis ..................................................................................................... 127
10.5 Conclusions ............................................................................................................... 128
11. Activity N° 10: Project Workforce Generation .............................................................. 132
11.1 Workforce estimation ............................................................................................... 132
11.2 Consideration for the incorporation of women into the workforce ......................... 137
11.3 Services required ....................................................................................................... 138
11.4 Community outreach ................................................................................................ 139
11.5 Conclusions ............................................................................................................... 140
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12. Activity N° 11: Project Business Model Assessment ..................................................... 142
12.1 Business Model Structure ......................................................................................... 142
12.2 Off-takers .................................................................................................................. 144
12.3 Breakeven price analysis ........................................................................................... 149
12.4 Conclusions ............................................................................................................... 152
13. Activity N° 12: Policies and Strategies Recommendations ........................................... 154
13.1 Technical.................................................................................................................... 154
13.2 Economical ................................................................................................................ 155
13.3 Strategic .................................................................................................................... 156
13.4 Regulatory ................................................................................................................. 158
13.5 Conclusions ............................................................................................................... 159
14. Activity N° 13: Final Workshop ...................................................................................... 160
14.1 Workshop Structure .................................................................................................. 160
14.2 Workshop assistance statistics.................................................................................. 161
15. Annexes ......................................................................................................................... 163
15.1 Annexes for Activity 1 ............................................................................................... 164
15.1.1 Technology Factsheet: CO2 to Methanol ........................................................... 164
15.1.2 Technology Factsheet: CO2 to DME via Methanol ............................................. 165
15.1.3 Technology Factsheet: CO2 to Gasoline via Methanol ....................................... 166
15.1.4 Technology Factsheet: CO2 to Kerosene via Methanol ...................................... 167
15.1.5 Technology Factsheet: CO2 to Kerosene via RWGS & FT ................................... 168
15.1.6 Technology Factsheet: CO2 to Diesel via RWGS & FT......................................... 170
15.1.7 Technology Factsheet: CO2 to Diesel via Co-Electrolysis & FT ........................... 171
15.1.8 Technology Factsheet: CO2 to Kerosene via Co-Electrolysis & FT ...................... 172
15.1.9 Technology Factsheet: Methanol ...................................................................... 173
15.1.10 Technology Factsheet: DME .......................................................................... 174
15.1.11 Technology Factsheet: Gasoline .................................................................... 175
15.1.12 Technology Factsheet: Diesel ........................................................................ 176
15.1.13 Technology Factsheet: Kerosene ................................................................... 177
15.2 Evaluation Matrix Excel File ...................................................................................... 178
15.3 Block Flow Diagram of The Plant............................................................................... 179
15.4 Plot Plan of The Plant (general arrangement drawings included) ............................ 180
15.5 Piping and Instrument Diagram (DAC & Oxycombustion unit) ................................. 181
15.6 Piping and Instrument Diagram (Electrolysers) ........................................................ 182
15.7 Piping and Instrument Diagram (Methanol Unit) ..................................................... 183
15.8 Heat and Material Balance (part 1/2) ....................................................................... 184
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15.9 Heat and Material Balance (part 2/2) ....................................................................... 185
15.10 Electrical One Line Diagram ...................................................................................... 186
15.11 Block Flow Diagram of demineralized water flux ..................................................... 187
15.12 Block Flow Diagram of steam flux ............................................................................. 188
15.13 Block Flow Diagram of gas and oxygen flux .............................................................. 189
15.14 Wind Farm Projects assessed under the SEIA in Chile .............................................. 190
15.15 Desalinization Projects assessed under the SEIA in Chile ......................................... 191
15.16 Climatic Variables in Cabo Negro .............................................................................. 192
15.17 Permits associated with: Desalination Plant ............................................................. 193
15.18 Permits associated with: ERNC Production ............................................................... 194
15.19 Permits associated with: G2H Production (1/2)........................................................ 195
15.20 Permits associated with: G2H Production (2/2)........................................................ 196
15.21 Permits associated with: Methanol Production (1/2) ............................................... 197
15.22 Permits associated with: Methanol Production (2/2) ............................................... 198
15.23 Permits associated with: Transport and Storage ...................................................... 199
15.24 Permits associated with: Fuel loading for export...................................................... 200
15.25 Interviews summary .................................................................................................. 201
15.26 Estimated jobs for different desalination plants....................................................... 205
15.27 Estimated jobs for different wind farms ................................................................... 206
15.28 Business Model -Sensitivity analysis results ............................................................. 207
15.29 Assistants to Final Workshop .................................................................................... 221
Bibliografía ................................................................................................................................ 223
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List of Figures and Tables
List of Figures
Figure 1. Simplified Diagram of the components of The Plant .................................................. 14

Figure 2. Synfuel production routes............................................................................................ 22
Figure 3. E-fuel projects in Chile.................................................................................................. 31
Figure 4. PtX demand shares per sector under different scenarios in 2050. .............................. 32
Figure 5 Coal, Oil and Gas demand projections until 2060. ........................................................ 35
Figure 6. Liquid fuels demand forecast by region (MBDOE). ...................................................... 36
Figure 7. Liquids fuels demand forecast by sector (EJ). .............................................................. 36
Figure 8 Chile's PtX potential domestic demand in 2050. .......................................................... 38
Figure 9. Enap Logistics in Magallanes ........................................................................................ 43
Figure 10. Gasducts, poliducts and piers in Cabo Negro............................................................. 44
Figure 11. Outlook for annual global passenger-car and light-duty vehicle sales, to 2030. ....... 45
Figure 12. Location of Edelmag´s CO2 sources in the Magallanes Region .................................. 48
Figure 13. PtX potential location in Magallanes Region, its renewable energy source, and its
water sources. ............................................................................................................................. 49
Figure 14. Water Stress in Magallanes Region. ........................................................................... 49
Figure 15. Analysed locations in Cabo Negro near Enap & Methanex ....................................... 61
Figure 16. Simplified Diagram of The Plant showing main systems ........................................... 63
Figure 17. Basic Diagram of an electrolysis cell.......................................................................... 64
Figure 18. Main electrolyser manufacturers worldwide ............................................................ 67
Figure 19. Announced hydrogen projects per region and type ................................................. 70
Figure 20. Carbon dioxide capture process used by Global Thermostat. ................................... 73
Figure 21. Companies active in the field of CO2 DAC. ................................................................. 74
Figure 22. Global Thermostat's commercial CO2 capture plant in Alabama, USA. ..................... 75
Figure 23. Global Methanol Demand .......................................................................................... 76
Figure 24. Simplified PFD of e-methanol production .................................................................. 77
Figure 25. Indicative flowsheet of the e-methanol production .................................................. 78
Figure 26. The “George Olah Renewable CO2-to-Methanol Plant” of CRI in Iceland.................. 80
Figure 27. e-methanol Liquid Sunshine plant in Lanzhou, China ................................................ 81
Figure 28. Capacity factors on the Magallanes Region .............................................................. 84
Figure 29. Block Flow Diagram of demineralized water flux ...................................................... 86
Figure 30. Block Flow Diagram of steam flux ............................................................................. 86
Figure 31. Gasduct network in Cabo Negro ............................................................................... 87
Figure 32. Block Flow Diagram of gas flux .................................................................................. 88
Figure 33. Methanol uses ........................................................................................................... 89
Figure 34. Wind Rose in Cabo Negro ........................................................................................ 102
Figure 35. Temperature and rainfall in Punta Arenas .............................................................. 103
Figure 36. Plot plan: Electrolyser installation for H2 production.............................................. 109
Figure 37. Example of a 20 MW PEM electrolyser indoor installation 400 m2 ......................... 109
Figure 38. Example of a 25 MW PEM electrolyser installation (40 x 20 ) 800 m2 .................... 110
Figure 39. Example of PEM electrolyser design ........................................................................ 110
Figure 40. Plot plan - DAC and Oxycombustion boiler ............................................................. 111
Figure 41. Example of DAC module ........................................................................................... 112
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Figure 42. Climeworks' first industrial realization in 2017, 900 tCO2 captured/year at Swiss plant
via 18 modules .......................................................................................................................... 112
Figure 43. Plot Plan of methanol unit ....................................................................................... 113
Figure 44. Definition of Class 5 AACE estimation ...................................................................... 114
Figure 45. Cost Allocation of the Investment for The Plant (Wind Farm included) – Prefeasibility
stage .......................................................................................................................................... 116
Figure 46. Cost Allocation of the Investment for The Plant (Wind Farm not included) –
Prefeasibility stage .................................................................................................................... 117
Figure 47 LCOM breakdown ...................................................................................................... 125
Figure 48 Methanol Prices Reference ....................................................................................... 126
Figure 49 Industry methanol price forecast .............................................................................. 127
Figure 50 Business Model sensitivity scenario .......................................................................... 130
Figure 51 EF per L/s during construction stage ......................................................................... 135
Figure 52 EF per L/s during operation stage ............................................................................. 135
Figure 53 Job creation summary ............................................................................................... 136
Figure 54 Number of workers over time ................................................................................... 137
Figure 55 Stakeholders for the development of a green hydrogen project ............................. 142
Figure 56 Business model of the project ................................................................................... 143
Figure 57. Renewable Methanol Production Forecast.............................................................. 144
Figure 58 CAPEX of Service Station Infrastructure by fuel type ................................................ 146
Figure 59 World 2020 methanol demand by end use............................................................... 147
Figure 60 World methanol demand by region .......................................................................... 148
Figure 61 Carbon market prices for voluntary and compliance international markets............ 151
Figure 62 - Institutions Registered for Workshop ..................................................................... 161
List of Tables
Table 1. Selected fuels and technologies for Magallanes pre-feasibility study .......................... 25
Table 2. PtL projects in Europe for Methanol ............................................................................. 28
Table 3. PtL projects in Europe for Kerosene .............................................................................. 29
Table 4. PtL projects in rest of the world for Methanol ............................................................. 30
Table 5. PtX penetration percentage in 2050 by Fuel and Sector............................................... 33
Table 6 Kerosene average global demand by sector in 2019-2020. ........................................... 33
Table 7 Diesel average global demand by sector in 2018-2019.................................................. 34
Table 8. PtX penetration factor in 2050. ..................................................................................... 34
Table 9. Fuels Growth Rate between 2019 and 2050. ................................................................ 37
Table 10. Chilean 2019 Fuel Demand and potential 2050 PtX Demand. .................................... 38
Table 11. Global 2020 Fuel Demand and potential 2050 PtX Demand ....................................... 39
Table 12 Main enablers per e-fuel. ............................................................................................. 40
Table 13. Enabler summary in order of relevance by e-fuel. ...................................................... 41
Table 14. Few examples from European and American Oil & Gas Companies (Majors) ............ 42
Table 15 Career, course, or postgraduate related to green hydrogen in Chile. ........................ 47
Table 16. Possible sources for the capture of CO2 emissions in the Magallanes Region............ 48
Table 17. Referential theoretical sizing and production for e-methanol plant .......................... 60
Table 18. Table of ratios H2/MeOH and CO2/MeOH considered ................................................ 64
Table 19. Alkaline and PEM comparison .................................................................................... 66
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Table 20. Main electrolyser manufacturers ................................................................................ 68
Table 21. Direct Air Capture (DAC) technologies comparison .................................................... 72
Table 22. PtL projects for Methanol............................................................................................ 79
Table 23. Results from sensitivity analysis of LCOE for different Discount Rates ....................... 84
Table 24: Timeline of required tasks ........................................................................................... 91
Table 25. Different possible compositions of natural gas ......................................................... 103
Table 26 Results from sensitivity analysis of LCOE for different Discount Rates ...................... 122
Table 27 CAPEX and OPEX of The Plant..................................................................................... 123
Table 28 Results from sensitivity analysis of LCOM for different Discount Rates .................... 124
Table 29 Financing hypothesis .................................................................................................. 124
Table 30 LCOM breakdown ....................................................................................................... 124
Table 31 Business Model results for different case scenarios: sensitivity analysis results....... 131
Table 32 Number of Workers declared by developers for green hydrogen projects in Chile .. 132
Table 33 Employability factor for the wind farm ...................................................................... 133
Table 34 Employability factor for hydrogen production ........................................................... 134
Table 35 Employability factor for methanol production........................................................... 134
Table 36 Employability factor for DAC ...................................................................................... 134
Table 37 Number of workers per Ez MW .................................................................................. 137
Table 38 Potential beneficiary companies in the green hydrogen industry ............................. 139
Table 39. Structure of the Workshop ........................................................................................ 160
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Abbreviations
AEL Alkaline Electrolysis
ALK Alkaline Electrolysis

BECCS Bioenergy with carbon capture and storage
BEV Battery electric vehicles
BioCCS Bioenergy with Carbon Capture and Storage
BtL Biomass to liquid fuels
CCS Carbon capture and storage
CCU Carbon capture and usage
CH3OH Methanol
CH4 Methane
CNE National Commission of Energy
CO Carbon monoxide
CO2 Carbon dioxide
CtL Coal to liquid fuels
DAC Direct air capture
DME Dimethyl ether
EF Employability factor
EIA Environmental Impact Assessment Study
EY Electrolyser or electrolyser
FT Fischer-Tropsch process
FTE Full Time Equivalent
FCEV Fuel cell electric vehicles
GHG Greenhouse Gases
GtL Gas to liquid fuels
GWP Global warming potential
HEFA Hydroprocessed Fatty Acid Esters and Free Fatty Acid
H2 Hydrogen
HT High temperature
IDB Inter-American Development Bank
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IMPCA International Methanol Producers and Consumers Association
LCOE Levelized cost of energy
LCOM Levelized cost of methanol
O2 Oxygen
ME Ministry of Energy of Chile
MMSA Methanol Market Services Asia

MOGD Mobil Olefins-to-Gasoline-and-Distillate
MSA Moisture Swing Adsorption

MSW Municipal Solid Waste
MtG Methanol-to-Gasoline
MtO Methanol-to-Olefins
O&M Operation and maintenance
PEM Proton Exchange Membrane Electrolysis
PtG Power to gas
PtL Power to liquids
PtX Power to X
PtCH4 Power to methane
RED Renewable Energy Directive
RWGS Reverse Water Gas Shift
SAF Sustainable Aviation Fuels
SEC Superintendency of Electricity and Fuels
SOEC Solid Oxide Electrolysis Cell
TRL Technology readiness level
TSA Temperature Swing Adsorption

UMAG University of Magallanes
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1. Executive Summary
The present Final Report is submitted to the Interamerican Development Bank (hereinafter
“IDB”) and the Ministery of Energy of Chile (hereinafter “ME” or “MoE”) in accordance to the
Terms of Reference and to the Technical Proposal of the consultant, of the study “CH-T1235-
P003 Prefeasibility study for a synthetic fuel project in the Magallanes region based on green
hydrogen”.
The general objective of the study is to analyze the prefeasibility of the synthetic liquid fuel
production in the Magallanes Region, based on green hydrogen from wind energy. It has the
following specific objectives:
• Review the different technologies of synthetic fuel production from hydrogen (including
technical, economic and regulatory aspects).
• Identify key opportunities and challenges related to the production of synthetic liquid
fuels and their scaling up processes.
• Produce key information for private and public project developers to assess the viability
of a synthetic liquid fuel production plant.
In the following sections we present the results of the study which describes the work plan, the
methodologies employed and the results obtained for Activities 1 to 13.
Chapter 2 describes Activity 1, which corresponds to the technical analysis of synthetic fuel
production. It identifies and analyzes the current international available production processes
and technologies for synthetic liquid fuel production originated from hydrogen and CO2. The
description compares and assesses these processes and the associated technologies,
considering key characteristics such as maturity levels of the technologies, estimated
investments and operational costs, equipment and facilities, transformation efficiencies,
security issues, among others.
The contents of this chapter are organized as follows:
• Definition of synthetic fuels.

• Description of the production routes for synthetic fuels (Methanol route and Syngas
Fischer-Tropsch route).
• Definition of technical key performance indicators to compare the five fuels to be
analyzed (methanol, DME- Dimethyl Ether, gasoline, kerosene and diesel).
• Presentation of individual technology fact sheets for each fuel, available in the
Appendix.
• Description of selected international power-to-liquid projects.
The key findings of the chapter can be summarized as followed:
• The net water consumption for all synfuels is similar, with Methanol slightly lower than
DME, gasoline, kerosene and diesel.
• The emissions related to all five PtL fuels are low, resulting in a CO2eq reduction
between 85-90% compared to the corresponding fossil analogue fuels.
• Safety related issues concerns explosion and toxicity issues. The self-ignition
temperature of methanol and DME are higher than gasoline or kerosene, which means
that the explosion risk is lower compared to the other fuels. In case of soil and sea
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contamination, the water solubility of methanol can be considered an advantage as
compared to gasoline, diesel and kerosene.
• Regarding the combustion of each synfuel, methanol and DME cause lower soot and
particle emissions than the others; moreover, all synfuel reduce hazardous emissions in
comparison to their fossil analogues due to less sulfur and nitrogen contents and a more
homogeneus fuel composition.
• The methanol-based fuels have a higher TRL than the Fischer-Tropsch fuels due to the
current low TRL of the syngas production via RWGS or co-electrolysis. Since no fully
commercialized plants based on RWGS and co-electrolysis are commissioned today,
every additional process step increases technical risks. Therefore, methanol can be seen
as most advanced technology, followed by DME and gasoline.
• Methanol has the lowest gravimetric and volumetric energy density of all investigated
synfuels, followed by DME. Diesel and kerosene have the highest energy density, slightly
higher than for gasoline.
• The production costs for the studied synfuels are higher than for the fossil ones. E-
methanol is the closest to its alternative fossil market price (roughly two times more
expensive than natural-gas based methanol), whereas the difference between e-
gasoline, e-diesel or e-kerosene versus their fossil alternatives, is five times as much.
• Synfuels compete with biofuels on the market for low-carbon fuels (for example, e-
methanol competes with methanol from Biomass gasification & MeOH synthesis; the
same occurs between e-kerosene and kerosene plus Alcohol-to-Jet and between e-
gasoline and bio-gasoline and bio-ethanol produced from wheat, maize or sugar cane).
• On a long-term perspective, both e-fuels and bio-fuels will be required as fossil fuel
substitutes, with a future market share hard to predict. Today, biofuels are the less
expensive alternative to fossil fuels than e-fuels. However, with cheap hydrogen from
renewable energies, e-fuels can become the less expensive low-carbon alternative.
• Sixteen international synthetic projects in Europe, Canada and China were presented
(ten are related to the production of e-methanol and the rest to e-kerosene). The
technology of the electrolysers is both Alkaline and PEM. The preferred CO2 source is
industrial, due to the cost considerations as compared to direct air capture.
Chapter 3 describes Activity 2, which corresponds to the commercial analysis of the synthetic
fuel production. It identifies high-level opportunities and challenges for the development of a
commercial synthetic liquid fuel production plant, including potential applications and demand
sources for the products, trends for the markets of the products, potential socio-environmental
barriers, potential human capital availability, among others.
• Benchmark of synth fuel projects in Chile.

• Analysis of local and global markets for synth fuels.
• Analysis of local and global potential off-takers.
• Review of the potential players in the oil & gas sector and in the commodity traders
sector.
• Analysis of existing infrastructure and logistics in Cabo Negro.
• Analysis of barriers (competition, economic, human resources, regulatory).
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The principal conclusions of the chapter are the following:
• A growing number of green hydrogen projects in Chile have been announced since the
issuance of the National Strategy for Green Hydrogen. Although the biggest
development projects are centered in giga-scale ammonia production and industrial
applications, there are also 3 synthetic fuel projects (with Haru Oni project as the most
advanced, having obtained an environmental resolution approval).
• The liquid fuel demand is expected to grow until 2030, followed by a decline that will
depend on the countries’ commitment toward a low carbon economy. E-diesel is
expected to represent the highest demand in the long term, followed by e-kerosene and
e-gasoline. The reason is that e-diesel has more sectors of applications (such as shipping,
heavy-duty vehicles, and industrial sector), unlike gasoline (which has light-duty vehicles
as its main applications and in a direct competition with the growing market of battery
electric vehicles-BEV). On the other hand, for e-kerosene, the aviation sector represents
an important demand for this fuel, considering that it is more competitive than other
solutions such as biofuels and electric aircrafts.
• Regarding alliances and potential enablers for the creation of a synthetic fuel market, e-
kerosene is the e-fuel with more enablers, or potential off-takers, taking into
consideration international initiatives and goals to reduce CO2 emissions in the aviation
sector. E-Methanol and e-diesel are the following two sectors with more initiatives to
leverage demand for these fuels, motivated mainly by their capacity to be used in the
shipping sector. However, implementing e-methanol in the shipping sector will require
the conversion of existing infrastructure, where it could take more than 15 years to
change the entire global float. In contrast, e-diesel, e-kerosene and e-gasoline will be
used in traditional infrastructure, facilitating the adoption of these fuels.
• Mayor Oil & Gas companies, as well as other stakeholders like Traders, will have an
important role in the consolidation of the synthetic fuel market. Domestically, ENAP and
Methanex will play a crucial role to facilitate infrastructure or create joint ventures
where their experience and participation could optimize transport and export
infrastructure investments.
• An assessment of the main barriers for the synth fuel market was performed. In
Magallanes CO2 feedstock will require Direct Air Capture Systems (DAC) since CO2
emission sources are reduced and are not concentrated. On the other hand, water
provision shall be assessed depending on the location of the project, where continental
or coastal water resources should be taken into account (in the case of marine water a
desalination plant must be considered).
• Finally, there is still a regulatory gap to allow clear rules for the development of this
market, where the public and private sector are working jointly to address these
challenges. Still, a priorization of these kind of projects is identified, and the observance
of environmental requirements and appropiate approval timings, can facilitate the
implementation of green hydrogen projects in the region.
Chapter 4 describes Activity 3, which corresponds to the evaluation and comparison of synthetic
fuels through a multi-criteria matrix. This tool and methodology enable to recommend a specific
technological solution for a synthetic liquid fuel plant in Magallanes, a preliminar capacity sizing
estimate, a specific area for the plant and a high level plan for sequential scale-up.
The key result is the selection of the fuel to be produced by the synthetic fuel plant, which is a
major input for the following activities of the present study. In this regard and in compliance
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with the Terms of Reference of the study, the consultant based on the results of the multicriteria
evaluation matrix, recommends to move forward to the following activities focused on a
methanol production plant, synthetized from green hydrogen and CO2 captured by means of
DAC technology (Direct Air Capture). Furthermore, other considerations such as environmental,
strategic, technical and commercial criteria were also considered in the aforementioned fuel
selection. This technology proposal presented the highest score between the five evaluated
alternatives and the highest competitive advantages.
Chapter 5 develops Activity 4, which corresponds to the identification and description of

commercially available technologies and service providers that could participate in the
development of the methanol plant, describing their participation or implementation in existing
projects globally.
• Considerations taken for the sizing of the plant.

• Electrolysis technologies (Alkaline, PEM, high temperature), key suppliers & projects.
• Direct Air Capture, main considerations, technology assessment, suppliers & projects.
• Methanol process considerations, technology providers & projects.
The key findings of the chapter can be summarized as followed:
• The electrolysis technologies considered for the methanol plant are alkaline and PEM,
both compliant with the technical economical requirements. A list of 15 vendors from
Europe, North America and Asia was included.
• The DAC technologies are categorized as absorption and adsorption systems. A list of
seven vendors from Europe and North America was provided most of them are
companies incorporated since 2009.
• The synthetic methanol technologies were presented, characterized by three principal
processes (compression section, loop of reaction and purification section). Examples of
eleven e-methanol plants were presented, including commercial operative plants and
announced plants.
• A list of companies involved in the e-methanol plant´s supply chain was presented (three
plant integrators, four plant operators, nine catalyst manufacturers).
Chapter 6 develops Activity 5, which corresponds to the description of major infrastructure,

installations, and equipment required for the methanol plant defined in Activity N°3. Also, an
analysis was presented to establish the required supplies of wind power, water, CO2, steam,
natural gas, land requirements, among others. Special challenges were described and analyzed
regarding technical, environmental, social, regulatory and contractual issues.
• Description of utilities and required services.

• Presentation of a timeline with the tasks required for the project.
• Analysis of principal challenges in terms of safety, environmental and permitting.
• The environmental evaluation is a critical activity which could take around two years if
the projected is presented as an Environmental Assessment Study (EIA), which is
recommended for the complexity of the project.
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• It is essential to permanently monitor the regulations and laws that can affect the
components of the project (operation of wind farms, water rights for desalinated water,
safety and security hydrogen regulations, among others).
Chapter 7 develops Activity 6, which corresponds to the definition of all the design variables
and values for the selected site in Cabo Negro, considering the expected operation of the
methanol plant and its related facilities. Also, an engineering assessment is provided with all the
high-level drawings, schematics, and diagrams necessary to carry out subsequent potential cost
assessments and procurement. The chapter and its Annexes contain block flow diagrams (BFD),
plot plans, process flow diagrams (PFD), piping & instrument diagrams (P&ID), heat and material
balance (H&MB), electrical online diagram, and general equipment arrangement drawings.
• List of components for the main equipment.

• Technical hypothesis for the design: operation loads, plant sizing, among others.
• Production and consumption figures and effluents.
• General arrangement drawings for the methanol plant and its sub-systems.
• Footprint of principal components is as follows (electrolysis plant: 4.800 m2; DAC plant:
5.000 m2; methanolation plant: 7.000 m2).
• The configuration of the sub-systems of the methanol plant is shown in the following
figure.
Figure 1. Simplified Diagram of the components of The Plant
Source: EDF
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Chapter 8 describes Activity 7, which consists of the estimation of investment and operational
costs for the methanol plant defined in the previous activities, at a Class 5 estimation level as
defined by AACE.
• Presentation of CAPEX and OPEX costs.

• Presentation of economic assumptions.
• CAPEX is estimated at 304,4 MUSD and OPEX at 6,3 MUSD per year, in the scenario that
includes all the components (wind farm, electrolyser installation, direct air capture unit,
oxy-combustion boiler, methanolation unit, and utilities).
• If the wind farm is not considered as part of the plant, the CAPEX is reduced to 222
MUSD and OPEX to 3,7 MUSD.
Chapter 9 develops Activity 8, which corresponds to a synthesis of the main ideas obtained in
the context of interviews conducted for the study.
• Validate assumptions and hypotheses.

• Adjustments to the business model.
• Validate barriers and challenges.
The main conclusions of the chapter are the following:
• Assumptions about the location, barriers, and potential market are within the stakeholder’s
expectations, with a notable interest in synthetic fuel, considering Chile as an attractive
country for the development of this type of project.
• For the international market, maritime applications would be an early adopter of green
methanol. For domestic demand, blending with gasoline or diesel could help create pilot
projects, and the decarbonization of the chemical industry could increase its demand.
• Universities and Research & Development (R&D) institutes can contribute with their local
knowledge to the analysis, evaluation, and development of new projects and will be crucial
for training and workforce development programs needed for this emerging market.
Chapter 10 develops Activity 9, which corresponds to the calculation of the levelized cost of
methanol based on the CAPEX and OPEX values from Activity 7 and other variables such as
discount rate and project commercial lifetime based on existing projects in Chile and worldwide.
• Calculation of LCOM.
• Economic results analysis.
15
• Considering a CAPEX of 304,4 MUSD and OPEX of 6,3 MUSD per year for the Plant designed
previously (refer to chapter 8), including major turnarounds every 3 to 5 years, the
calculation of the Levelized Cost of Methanol (LCOM) results in values between 2.367 and
2.720 USD/ton, which are almost four to five times higher than the average cost of grey
methanol.
• Considering the scenarios where backup power generation is required:
o For emergency shutdown (1 MVA), the supplementary cost of 0,3 MUSD CAPEX
and 0,12 MUSD OPEX (total in 25 years) for capacity required and estimated
previously (see chapter 8) results on a LCOM of 2.369 USD/ton.
o For emergency shutdown and to maintain the equipment on stand-by mode (8
MVA) the supplementary cost of 2,6 MUSD CAPEX and 0,9 MUSD OPEX (total in
25 years) for the capacity required and estimated previously (see chapter 8)
results on a LCOM of 2.386 USD/ton.
o It is worth noting that the fuel consumption for the backup energy (potentially
gas, or diesel) has not being considered in those calculations. The fuel storage
has neither been taken into account as both scenarios contemplate a
connection to the gas pipeline. These aspects have to be evaluated on the next
stages and feasibility studies for the synthetic fuel plant.
• This result is in the upper side of the estimations and studies of IRENA1 which indicate that
the production cost for green e-methanol from Direct Air Capture (DAC) sources would be
in the range of 1.120 to 2.380 USD/ton.
• The current price gap between grey and green methanol is projected to decrease with the
technological improvement of green hydrogen (H2) and carbon dioxide (CO2) capture
technologies, and the reduction of their prices.
• Due to their significantly lower CO2 footprint, and to strengthen the worldwide fuel
decarbonization efforts, a price premium for green e-fuels is needed.
Chapter 11 develops Activity 10, which corresponds to the estimation of the workforce that
would be generated by a project such as the one studied. It also provides considerations for the
creation of these jobs. In addition, an analysis of the services required by the project is
presented, as well as the potential of companies that can provide these services. Finally,
recommendations regarding the first approach to the community and its engagement are
provided.
• Workforce estimation.
• Consideration for the generation of effective employment.
• Services required.
• First approach and engagement with the community.
• There is a potential to develop 339 new jobs in the construction and installation phase, 46
in the operation and maintenance stage, and 253 in indirect jobs in Magallanes Region.
Additionally, the “Universidad de Magallanes” is generating a synthetic fuel testing
laboratory, forecasting a generation of 8 jobs.
1
IRENA & Methanol Institute “Innovation Outlook Renewable Methanol”, 2021.
16
• It is important to consider the participation of women. For this purpose, it is possible to
participate in plans such as "Energy + Women" or in the NCh 3262-2012 Chilean standard.
• 871 large and medium-sized companies with the potential to participate in the hydrogen
industry were identified. However, none of the companies are in the region of Magallanes.
This opens an opportunity for smaller companies with a presence in the region.
• A community engagement plan should be made based on the “Guide for the participatory
development of energy projects” (Ministry of Energy, 2019). In addition, relationships
should be established between the private sector with universities of the region, which
have the capacities to support developers in the preparation of social, environmental, and
territorial studies, specialized energy analysis, and citizen participation plans.
Chapter 12 describes Activity 11, which consists of an analysis of the role of the different
stakeholders in the development of the project. Moreover, an analysis was performed to
identify the markets where e-methanol producers could participate, and the viability gap
involved in the project.
• Project structure
• Off-takers
• Breakeven price analysis
• Based on today’s green hydrogen projects, a Project Sponsor could be an initial investor
which operates and develops part of the value chain (electricity utilities, chemical
industries, or O&G companies), a technology provider interested in the implementation
and testing of its technology, or even an off-taker that plans to ensure the provision of the
green commodity in the long-term.
• Renewable methanol will play a key role in supporting the low carbon transition for hard-
to-electrify applications, such as heavy-duty vehicles, long-haul trucks, or maritime vessels.
Moreover, due to its high-octane rating, methanol is a versatile fuel that can be employed
in internal combustion engines (gasoline or diesel), hybrid systems, fuel cells, cookstoves,
and boilers (IRENA & Methanol Institute, 2021).
• The maritime transport sector is an interesting market for methanol adoption since it aligns
with its decarbonization goals. Even though the high cost of green e-methanol, associated
with CO2 capture, this e-fuel has advantages compared to its other competitors in the
shipping sector that could compete with them in the long term. For example, compared to
its competitors, green ammonia and Liquified Natural Gas, green e-methanol has
advantages ranging from lower emissions, low infrastructure costs, and easy to handle.
• The chemical industry is also a potential market for green methanol. To date it has shown
an intention to reach zero emissions in the long term and is one of the sectors that demand
most of the methanol produced worldwide today.
• The green methanol advantage is that it could be converted into other fuels such as e-
gasoline, e-diesel, and e-kerosene, allowing it to be a pivotal step to reach markets where
net-zero targets have been set.
• Potential early adopters of e-methanol could be the Asian, European, and South American
markets.
• The high Levelized Cost of Methanol (LCOM) is a challenge for its development since off-
takers will not procure the product despite its clean attributes until the gap of prices is
17
substantially reduced. For the studied project, even with a reduction of the CO2 and GH2
prices2, the LCOM resultant would be 914 USD/tonMeOH. Even in this scenario, the
obtained LCOM is still two times higher than the fossil methanol price. Therefore,
complementary instruments would be required to reduce the price gap of the project,
among these are the optimization of the configuration of the project (for example, using a
CCU system instead of a DAC system), the use of carbon market instruments, using
concessional finance instruments, or the implementation of stronger regulations.
• If the project relies on carbon markets to close the viability gap, a certificate price of 1.800
USD/tonCO2 would help to reduce the gap. Moreover, subsidies to shorten the gap would
require to subsidy 95% of the CAPEX to fully close the gap, close to 285 MMUSD, which is
far from the 50 MMUSD awarded to 6 GH2 Chilean projects in 2021. Therefore, to
implement the Plant a combination of efforts from the carbon market, concessional finance
and off-takers will be required to fully close the viability gap, along with new configuration
of the project or technology cost reduction that could help to lower LCOM of the
commodity.
• Due to the high CAPEX investment for this project, a potential developer could be a major
energy company, such as O&G, interested in investing in a synthetic fuel projector a
company that could accept a short-term economic disadvantage, with the expectation to
gain an advantageous position in the mid and long term.
Chapter 13 describes Activity 12, which consists of recommendations for the Ministry of Energy
of Chile and other public institutions to facilitate and promote investment in projects such as
the Plant defined in this study.
The recommendations of this chapter are organized as follows:
• Technical
• Economical
• Strategic
• Regulatory
• Undertaking additional studies to optimize the concept of the plant considering location,
feedstock availability, and access to shared infrastructure. Evaluating the possibility of
changing the location to other areas of the country with more industries nearby may be
beneficial to obtain an industrial source for unavoidable CO2 that avoid using a DAC system
(which represents 40% of the overall CAPEX). Other alternative to evaluate is the
implementation of CCU in unavoidable sources and transporting it to the production site,
instead of using a DAC system. Hence, to develop a synthetic fuel industry, it is crucial to
identify unavoidable CO2 sources, create an environment conducive to collaboration, and
joint development for developers to use those sources before evaluating using DAC
systems. Prioritize unavoidable CO2 sources for the development of synthetic fuel industry
would improve the competitiveness of e-fuel initiatives. Moreover, the creation of a service
provider to capture and transport unavoidable CO2 may be encouraged. This would help
decreasing the development cost of synthetic fuels projects.
2
Considering a GH2 price of 1.5 USD/kg, CO2 price equal to 100 USD/t, and a discount rate of 5%
(optimistic scenario)
18
• Encourage the development of professionals in Chile for a synthetic fuel industry in the
Magallanes region. Identify the work force gap for the development of synthetic fuel
projects. For example, laboratory technicians specialized in synthetic fuels or wind turbine
specialists, who can participate in the synthetic fuels industry, specialized in different parts
of the value chain. Furthermore, international cooperation should be encouraged to share
knowledge and create jobs. Partnerships between new developers and universities should
also be encouraged.
• Generate guidelines for safe operation and incorporation of green e-methanol as fuel for
use in vehicles or electricity generation. Methanol is corrosive to some metals, and a
technical standard considering safety requirements to use green e-methanol in vehicles
engines or guidelines about how to modify vehicles engines, could accelerate the process
of vehicles adaptation (Methanol Institute, 2021). Additionally, encouraging the
deployment of renewable fuels through a quota system would facilitate price incentives to
provide stability for sustained growth and investment.
• Development of environmental studies to determine the impact of synthetic fuels on
ecosystems. Such as the possible cumulative effects of plant construction in a given area,
the impact of wind farms on birds, or the impacts of desalination plants on the coastal
ecosystem.
• Assess the implementation of price-based approaches for market enhancement (a
Contract-for-Difference scheme). Price-based mechanisms aim to provide a stable and
predictable source of revenue for clean energy investments to achieve a specific installed
capacity.
• The maritime transport sector is a potential market for synthetic fuels due to its hard-to-
electrify characteristic. Thanks to the comparative advantages that green e-methanol has
in front of other sustainable fuels and the willingness to pay a green premium by shipping
companies, shipping is a relevant niche for the adoption of e-methanol at international and
national level, and should be considered as a key product to facilitate the adaptation of this
sector offering a competitive e-fuel that meets international standards.
• Encourage agreements with Asian countries. Asia already has experience in working with
fossil fuels and is a large consumer of methanol. Therefore, a strategy to generate
agreements with Asian countries would help facilitate the demand for synthetic fuels,
especially green e-methanol. These agreements open the possibility of collaborating in GH2
derivatives, such as green methanol. It should also be considered that there are already
methanol export routes from Chile to Asian cities, such as Tokyo, Seoul, Beijing, Shanghai,
and Hong Kong, from Punta Arenas.
• Facilitate and encourage sector-coupling. This means the reuse of existing infrastructure as
pipelines and transport or the complementary use of ports. For example, a good alternative
to face the elevated cost of DAC is to generate e-methanol from the CO2 obtained from a
bio-methanol plant. Therefore, if one project considers the production of bio-methanol,
this project could be coupled with a green e-methanol project in the same location (IRENA
& Methanol Institute, 2021).
• Magallanes already has regulatory instruments that favour investments in the region, such
as Law 19.606 (Austral), Law Navarino for Tierra de Fuego (duty and VAT exemptions) and
the economical conditions of Free Zone. However, additional instruments could be studied
by the authorities to promote green hydrogen investments in Magallanes and the rest of
19
the country, with special tax or incentive regimes as others implemented recently in the
region by other countries3.
Chapter 14 describes Activity 13, which considered the realization of a final Workshop to
present the results of the study. The Workshop was held in March 4th of 2022.
A total of 121 people were invited to the event, from 32 institutions and companies. The
asistants totalled 65 persons, from 26 institution and companies, without counting the speakers
at the event. The institutions and companies that assisted were the following: AES Chile, AME,
Asesorias Enersur Ltda, Asociación de H2 Chile, Axens, BP, Colbun, Copec, CORFO, ENAP, ENEX,
GHD, GIZ, Gore Magallanes, HIF, Ifpen, Methanex, Ministerio de Energía, Seremi de Energía,
Siemens, Sowitec, Total Eren, Universidad Autónoma, Universidad Católica, Universidad de
Magallanes, World Bank Group.
3
Colombia approved Law 2099 in 2021, by which investments, goods, equipments and machinery used
for the production, storage, conditioning and distribution of hydrogen will benefit from the deduction of
income tax, VAT and duties exemption, and accelerated depreciation.
20
2. Activity N° 1: Technical Analysis
In Activity 1, the most common production routes for five synthetic liquid fuels (methanol, DME-
dimethyl ether, gasoline, kerosene and diesel) from hydrogen and CO2 were described and
analyzed, focusing not only on methanol and its derivatives, but also on Fischer-Tropsch fuels.
The initial key performance indicators (KPIs) to be used were the required process steps, the
simplified mass and energy balances as well as the Technology Readiness Levels (TRL) of each
production process. Additional indicators regarding environmental aspects were also used.
The main information that was provided for each synthetic fuel process/technology included:
• Short description of each synthesis route
• Simplified mass and energy balances of each production route
• Net water demand
• CO2eq avoided emissions
• Estimated production costs of each fuel in US$/t for Magallanes
• Transformation efficiency from power to H2 to liquid fuel
The analysis presented in Activity 1 was based on previous work within the EDF group as well as
publicly available information from European projects, authorities and industrial and scientific
associations. Furthermore, some of the most advanced Power-to-liquid projects at industrial
and commercial scale from Europe were described in brief. The results were summarized in the
form of technology fact sheets for each process and fuel (the details are presented in the Annex).
The results of Activity 1 provide the input for the analysis and recommendations of Activity 3 as
well as for the more detailed analysis of the following Activities 5, 6 and 9.
2.1 Definition of synthetic fuels
Synthetic fuels (hereinafter synfuels) are liquid fuels that differ from conventional fuels (diesel,
gasoline, kerosene) in both the production process and the replacement of crude oil as a raw
material source. Therefore, gaseous fuels (hydrogen, methane, ammonia) produced from other
feedstock than crude oil or natural gas, oil products from unconventional raw material sources
(oil sand, shale oil) and some others are often counted as synthetic fuels as well. Some synthetic
fuels are only used for special applications such as rocket propulsion (hydrazine, syntin),
whereas the so-called XtL fuels ("X-to-liquid") are considered as transportation fuel for cars,
maritime and aviation sector.
These fuels are liquid drop-in fuels with similar properties and composition in relation to
conventional petroleum-based fuels, thus, they can directly replace the latter in common
combustion engines, distributed via the existing infrastructure as well as facilitate their market
introduction. XtL fuels broaden the raw material sources by conversion of solids or gases into
carbon-containing liquid fuels (e.g. using natural gas (GtL) or coal (CtL) as raw materials). Most
recently, climate-neutral synfuels from biomass (BtL) or low-carbon power and CO2 (PtL, e-fuels)
gained increasing interest.
21
2.2 Description of production routes for synthetic liquid fuels from hydrogen
XtL fuels can be produced by various technologies, which can be summarized into two main
routes based on their intermediate products: the Syngas route and the Methanol route (see
Figure 2).
Figure 2. Synfuel production routes
For all XtL fuel production routes, additional hydrogen is required, except for GtL production,
for which the hydrogen content of natural gas is sufficient. The hydrogen can be either
generated during the synfuel production processes internally, or supplied by external sources.
However, the conventional production of hydrogen from methane through steam reforming
(SMR) leads to high CO2 emissions; therefore, alternative low-carbon hydrogen sources are
required.
Electrolysis is an external low-carbon source for hydrogen production which is gaining recently
an increasing interest; it consists of the endothermic split of water into hydrogen and oxygen
driven by renewable energies (RE). The decreasing cost trend of RE in the last two decades, in
particular from PV and wind, as well as technology developments on electrolysers enables a new
and promising technical and economic feasible production of low-carbon hydrogen. External
electrolytic hydrogen is usually considered for the methanol route, because CO2 can be directly
converted with H2 to Methanol and subsequently to methanol-derived fuels.
In the next two sections, an overview about the synfuel and the methanol routes is presented,
considering alternative low-carbon hydrogen only as hydrogen source.
2.3 Syngas route
The syngas route consists of three processes, the production of syngas, its conversion into
hydrocarbons and the subsequent upgrading into usable liquid fuels such as diesel and kerosene.
Syngas is a mixture of CO and H2 and can be produced from various inputs. Today, syngas is
produced at hundreds of kiloton scales either from coal gasification or from natural gas via
22
steam reforming or partial oxidation. Both fossil inputs contribute to increasing CO2 emissions
and to global warming. Therefore, alternative carbon sources like biomass or municipal wastes
are seen as the only future sustainable inputs, but they have not been used commercially so far.
Depending on the chemical composition of the input materials, the syngas ratio of CO to H2
varies. For the subsequent synthesis of liquid fuels, a ratio of 1:2 is required. For all fuels except
natural gas, the ratio has to be adapted by addition of water to increase the amount of hydrogen.
CO reacts with water to CO2 and hydrogen (Water-Gas-Shift reaction, hereinafter WGS), and so
the desired ratio can be achieved. Impurities like water, soot, particles, sulfur and nitrogen
components as well as CO2 in the syngas have to be removed before the subsequent synthesis.
In the synthesis step, syngas from gasification of solids or natural gas conversion is converted in
the heterogenous catalyzed Fischer Tropsch process4 into long-chain hydrocarbons (“FT
Syncrude”). Catalysts for FT are Cobalt, Ruthenium, Nickel or Iron; however, iron-based catalysts
are favored due to their catalytic effects for WGS reaction as well. The FT reaction is highly
exothermic and requires good heat removal. Approximately 10% to 15% of the final FT product
are light gases, the remaining syncrude consists of hydrocarbons up to 30 Carbon atoms,
depending on the catalyst and the reaction pressures and temperatures. Subsequent upgrading
of the FT syncrude (“Hydrocracking”) to diesel, kerosene and minor amounts of naphtha
comprise isomerization, hydrogenation and aromatization, depending on the syncrude
composition and on the desired main products (diesel or kerosene). The diesel to kerosene ratio
of the final product can vary between 30% to 70%. In any case, both products are produced, as
well as some naphtha.
So far, the direct use of CO2 with H2 in a FT process is not commercially available, and research
is still ongoing. However, two indirect routes can convert CO2 into FT fuels, both are already
successfully demonstrated at pilot scale and for each of them a first commercial-scale project is
announced (see previous section). The first indirect route is via endothermic Reverse-Water-
Gas-shift Reaction (hereinafter RWGS), in which CO2 and H2 react to CO and water. The second
indirect route is Co-electrolysis, which consists of a simultaneous electricity-driven reduction of
CO2 and water to produce syngas at high-temperatures. Both routes are seen as attractive
technologies if the origin of electricity is cheap and renewable low-carbon. For RWGS, hydrogen
is produced externally via electrolysis and mixed with CO2 before entering the RWGS reactor,
whereas in co-electrolysis hydrogen is generated internally.
For completeness, syngas conversion to methanol is a well-established process at mega and

giga-scales. During the last decade, several plants were set in operation in China, with syngas
produced from coal. Methanol is used as fuel directly, as fuel additive or for the production of
chemicals. In other regions, natural gas is the main input for methanol production.
2.4 Methanol route
Direct methanol synthesis from CO2 has attracted interest recently, particularly due to the
successful commercialization in Iceland of an e-methanol denominated Vulcanol, in the Carbon
Recycling International (CRI) project. The project was commissioned in 2012, CO2 is obtained
from a geothermal source and the production of methanol reaches 4 ktons/year.
4
FT process has nearly 100 years of existence, it was developed by German researchers Franz Fischer and
Hans Tropsch in the 1920s for making liquid fuels from coal with iron-based catalysts at 400°C and
pressures above 100 bar.
23
Methanol is directly synthesized from CO2 and hydrogen via catalytic methanolation with
Cu/ZnO catalysts. Methanol is a storable and transportable product, and can also be used
directly as a fuel or as fuel blend. One disadvantage of methanol as a fuel or for transport
applications is its low energy density compared to gasoline, diesel or kerosene.
Dehydration of methanol to Dimethyl ether (DME) leads to a gaseous fuel, which is considered
a substitute for diesel if liquified at 5 bars. DME has been used as fuel in China for several years,
and its main advantage as fuel are the missing carbon-carbon bonds, resulting in much lower
soot emissions compared to diesel. DME synthesis is a well-known process and applied at large-
scale in China.
A well-known process for methanol conversion to synthetic fuels is the Methanol-to-Gasoline

(MtG) process developed by ExxonMobil5 46 years ago. Dehydration of methanol leads first to
DME and subsequently to light olefins (chemical products that have from two carbons to five
carbons), which undergo further chain growth to higher olefins (having up to twelve carbon
atoms). The dehydration reactions are catalyzed by aluminosilicate zeolites, whose dedicated
pore size hinders the formation of larger carbohydrates. Subsequently, the olefins are upgraded
through hydrocracking into usable fuels. With a combined process of Methanol-to-Olefins
(MtO6) with a downstream Mobil Olefins-to-Gasoline-and-Distillate process (MOGD), methanol
is converted into kerosene.
Either MtG or MOGD processes are used today for fuel production. The Motunui MtG plant in
New Zealand used natural gas to operate at large scale for several years from 1986 to 1999,
producing 600 kton/year of gasoline.
MtO process, as an alternative to the production of ethylene and propylene trough

petrochemical routes, has experimented a significative growth since 2010: according to the
Methanol Institute, MtO accounts for 25% of the global methanol consumption (25 million tons
per year). Furthermore, conversion of methanol to light olefins such as ethylene and propylene
is applied at large scale (500 ktons/year) in several plants in China7 (Gogate, 2019).
2.5 Fuel and technology selection for Magallanes plant
As mentioned in the introduction of the report, the general objective of this study is “to analyze
the prefeasibility of the synthetic liquid fuel production in the Magallanes Region, based on
green hydrogen from wind energy”. This definition excludes all gaseous synthetic fuels
(hydrogen, ammonia and methane) from further considerations, due to the focus on liquid fuels
only.
This study has a technology-open and maximum broad scope, according to the consultant´s
technical proposal to IDB. Therefore, all potential liquid fuels were considered as a potential
option for a plant in Magallanes, and compared with a multicriteria evaluation matrix (see
chapter 4 dedicated to Activity 3).
5
The ExxonMobil MtG process was introduced in 1975 to convert methanol to gasoline. The first patents
were originally assigned to Mobil Oil prior to its merger with Exxon Corp.
6
MtO was first introduced by Union Carbide in 1981. Some of the principal MtO technologies are currently
commercialized by Honeywell UOP, Lurgi and by Chinese Corporatons and Institutes.
7
Two MtO production sites are operational in China: a 833 ktons/year licensed and operated by Jiangsu
Sailboat Petrochemical Company, and a 300 ktons/year licensed and operated by Wison Energy.
24
The potential liquid fuels comprises methanol as well as all fuels derived out of methanol,
namely DME (dimethyl ether), gasoline and kerosene, as well as diesel from the FT route (see
previous section). Besides, since FT can also be used for the production of kerosene, FT kerosene
was also considered and compared with kerosene from methanol. Furthermore, for FT fuels,
two different upstream processes (co-electrolysis and RWGS) had to be considered. All of these
considerations lead to five different fuels and eight different synfuel production routes,
summarized in the following table.
Table 1. Selected fuels and technologies for Magallanes pre-feasibility study
Methanol
Fuel Syngas-FT route
route
RWGS Co-Electrolysis
Methanol X
DME (Dimethyl Ether) X
Gasoline X
Kerosene X X X
Diesel X X
Source: EDF
Therefore, five technology fact sheets on the different fuel and eight factsheets on CO2-to-fuel
technologies are provided (see the Appendix of this report).
For comparison, several technical key performance indicators were chosen, presented to ME
and IDB and modified after discussions. These KPIs were used in Activity 3 to rank the different
fuels and to compare the technologies (for details, see chapter 4), and to get a well-balanced
and traceable basis for discussion and decision-making.
2.6 Technical key performance indicators
To compare the different fuel options, thirteen criteria were defined (see chapter 4), of which
eight are related to technical key performance indicators and five for economic indicators.
It is worth to mention here, that only the fuel synthesis process is considered at this level. Effects
from the onshore wind power production and distribution, CO2 provision from Direct Air
Capture, sea water desalination, requirements for off-grid plants (e.g. back-up generation,
electricity storage) as well as hydrogen production from electrolysis are omitted, if not
mentioned explicitly. Hence, there is no difference for the eight synfuel production routes
related to these upstream processes.
For the environmental, technical and commercial criteria, the following KPIs were chosen:
1. Water consumption: the net water demand based on the mass balance for fuel
synthesis was chosen; water released during fuel synthesis is considered to be fully
recycled and refeed to electrolysis; in [kg H2O/kg fuel].
2. CO2eq emissions avoided: based on literature values given in (Liebich, 2020), the GWP
(Global Warming Potential) reduction for each synfuel were calculated from fossil fuel
emission; in [%].
25
3. Safety aspects: safety related chemical characteristics (flash point, self-ignition
temperature, explosion limits, water solubility) for each fuel were combined with their
compulsory classification and labelling according to Global Harmonized System (GHS)
for chemicals.
4. Other indirect effects: heat of synfuel production and combustion behavior of each fuel.
5. Technology maturity: based on the TRL (Technology Readiness Level) of all separate
synthesis process steps.
6. Transformation efficiency: overall efficiency from electricity to synfuels; [in %]
(excluding desalination, DAC, distribution, transport, grid losses).
7. Use for energy storage: the energy density of each fuel and the amount of hydrogen in
the final fuel, in [MWh/t] resp. [wt-%].
8. Production costs: the estimated production in [$/t]; (assumptions: Hydrogen
production costs 1.500 US$/t; wind electricity costs 20 US$/MWh; CO2 costs 330 US$/t;
10% interest rate; lifetime 25 years)
9. Competition: The number of alternative low-carbon fuels/technologies for each fuel
2.7 Comparison of 8 fuels (Technology fact sheets summary)
The detailed technical KPIs can be found at the fact sheets in the Appendices. The key findings
can be summarized as followed:
• The net water consumption of all synfuels are very similar around 2.5 kg water/ kg fuel,
with Methanol slightly lower than DME, gasoline, kerosene and diesel.
• The emissions related to all five PtL fuels are very low, around 10-15 gCO2eq/MJ (resp.
300-430 CO2eq/kg synfuel); resulting in a CO2eq reduction between 85-90% compared
to the corresponding fossil analogue fuels (75-90 gCO2eq/MJ resp. 2000-3500
CO2eq/kg).
• Safety related issues concerns explosion and toxicity issues. Whereas gasoline, diesel
and kerosene have quite similar chemical properties, DME and methanol are different.
Methanol has a low boiling point; and DME is already a gas under standard conditions;
therefore, explosion risk can be seen as higher due to easier evaporation. Vice versa,
the self-ignition temperature of both are considerably higher than gasoline or kerosene,
which means that the explosion risk is lower compared to the other fuels. However, all
fuels are already marketable products, so, manifold experience with handling is already
available. The good water solubility of methanol can be seen as an advantage in case of
contamination of soil and sea compared to gasoline, diesel and kerosene. Although a
methanol contamination will have severe effects on the bio- and geosphere, it will occur
in a smaller area and will be easier to handle .
• Other indirect aspects: the occurrence of waste heat in the production process in a
sparsely populated area can cause a disposal problem, if no additional heat sink for this
heat can be found. Waste heat will be produced for all fuels except methanol. Regarding
the combustion of each synfuel, methanol and DME cause lower soot and particle
emissions than the others; moreover, all synfuel reduce hazardous emissions in
comparison to their fossil analogues due to less sulfur and nitrogen contents and a more
homogeneus fuel composition.
• The methanol-based fuels have a higher TRL than the FT fuels due to the current low
TRL of the syngas production via RWGS or co-electrolysis. Since no fully commercialized
plants based on RWGS and co-electrolysis are commissioned today, every additional
26
process step increases technical risks. Therefore, methanol can be seen as most
advanced technology, followed by DME and gasoline.
• The highest power-to-synfuel efficiencies are achieved for methanol production, due
to the 1-step synthesis production. All other fuels have lower power-to-fuel efficiencies
but similar to each other. However, this is resulting from the lower efficiency regarding
the envisaged synfuel. During production of gasoline, kerosene and diesel, a part of the
products are by-products (e.g. diesel for FT kerosene production and vice versa).
• Methanol has the lowest gravimetric (and volumetric due to similar densities of liquids)
energy density of all investigated synfuels, followed by DME. Diesel and kerosene have
the highest energy density, slightly higher than for gasoline. Considering the the weight
percent of hydrogen in each fuel, the ranking remains in the same order.
• The production cost for all eight synfuels are higher than for the fossil ones. Therefore,
the price ratio between synfuel and fossil are considered to distinguish the different
options, resulting in methanol to be the closest to its alternative fossil market price. E-
methanol is roughly two times more expensive than natural-gas based methanol,
whereas the difference between e-gasoline, e-diesel or e-kerosene versus their fossil
alternatives, is five times as much.
• Synfuels are in competition with biofuels on the market for low-carbon fuels (for
example, e-methanol competes with methanol from Biomass gasification & MeOH
synthesis; the same competition occurs between e-kerosene and kerosene plus Alcohol-
to-Jet and between e-gasoline and bio-gasoline and bio-ethanol produced from wheat,
maize or sugar cane).
• On a long-term perspective, both bio-fuels and e-fuels will be required as fossil fuel
substitutes; however, the future market share of both is hard to predict. Today, biofuels
are the less expensive alternative to fossil fuels than e-fuels. However, with cheap
hydrogen from RE (around 1,5 -2,5 €/kg H2), e-fuels can become the less expensive low-
carbon alternative.
• A strong additional threat for synfuels is the switch in powertrain technology. In
particular for e-gasoline, e-mobility is a strong competition to replace gasoline within
this century (Europe has plans to become carbon neutral in 20508). In the case of diesel
and DME as e-fuels for trucks and buses, a competitor is green hydrogen FCEV (fuel cell
electric vehicles) as an option to replace carbon fuels and ICE (internal combustion
engines).
2.8 Selected European Power-to-liquid European projects
In Europe, PtL projects are focused mainly on two synfuels, methanol and kerosene. An overview
of ongoing projects is given in ¡Error! No se encuentra el origen de la referencia. for methanol
and ¡Error! No se encuentra el origen de la referencia. for kerosene.
8
The European Commission released in July 2021 the “Fit for 55” legislation package with binding emission
targets to reduce GHG emissions by 55% by 2030. All new cars registered as of 2035 will be zero-emission.
This would imply the end of the sales of new gasoline and diesel engine models and hybrids and a fast
roll-out of low emission transport modes
(https://ec.europa.eu/commission/presscorner/detail/en/IP_21_3541 ).
27
The key findings can be summarized as follows:
• No clear preferences for the electrolysis process, both Alkaline and PEM are applied for
hydrogen production.
• Co-electrolysis is a rising technology, with a first industrial-scale project announced for
kerosene.
• Renewable energy source is predominantly offshore wind.
• CO2 from industry is the main carbon source, CO2 from air is no option so far, due to
economic reasons. CO2 from air is currently around 10 times more expensive than CO2
from point sources. However, in a long-term perspective, costs of Direct Air Capture
(DAC) are assumed to decrease; furthermore, in a fully decarbonized future it will
remain the most important CO2 source (besides cement industry and waste
incineration).
• So far, only methanol and kerosene production projects are announced, driven by the
needs of hard to de-fossilize chemical and aviation sectors.
• Methanol projects are more numerous and at larger scale than kerosene ones (see next
Tables). So far, about 10 methanol projects at commercial scale have been announced,
and some others are waiting for subsidies from the European Commission. In contrast,
only two commercial projects on FT fuels (for kerosene production) have been
announced; both located in Norway due to available cheap wind and hydro power. As
well one Methanol-to-Kerosene project is announced today. This preference is likely due
to the direct utilization of CO2 for methanol production, whereas for FT fuels, the CO2
has first to be converted into CO by RWGS or Co-electrolysis, both with lower TRLs.
• Methanol production is based on direct methanolation of CO2.
• Kerosene production will be synthesized from syngas via FT route.
•
Table 2. PtL projects in Europe for Methanol
Project9 Country Commission Details
CRI (Carbon Iceland 2012/2022 Direct Methanol synthesis; CO2 from geothermal
International source; AEL; 4 kt/y (+ 110 kt/y plant in China in
Recycling) 2022)
Carbon2Chem Germany 2018 Demo site for various products (Methanol, NH3);
steel-off gas; 2 MW AEL; >100 Mio€ (thereof 62
Mio funding); 1 b€ for commercialization
MefCO2 Germany (Ruhr 2019 Direct Methanol synthesis; CO2 from coal power
area) plant; 0,6 MW PEM; 350t/y; 11 Mio€
North-C- Belgium 2024/2028/ Direct Methanol synthesis; CO2 from industry;

Methanol (Ghent)/ 2030 AEL & PEM; 2024: 65 MW; 44 kt/y; 140 Mio€
Netherlands 2028: 300 MW (Methanol & Ammonia)
(Rhodenhuize) 2030: 600 MW
Liquid Wind Sweden 2024 CO2 from Biomass; PEM; 50 kt/y; eMethanol
process from HaldorTopsoe
9
Sources:www.carbonrecycling.is;www.thyssenkrupp.com/en/newsroom/content-page-162.html;
MefCO₂ (mefco2.eu); www.northccuhub.eu ; www.liquidwind.se ; www.djewels.eu ; www.vicat.com
28
Djewels Netherlands 2025 CO2 from industry; 30 kt/y; 20 MW electrolysis
HyNoVi France (Eastern) 2025 CO2 from cement industry; AEL; 207 kt/y; 330
MW electrolysis
Copenhague Denmark 2027 n.a., 80 kt/y

Methanol
Source: EDF based on developers information
Table 3. PtL projects in Europe for Kerosene
Werlte Germany 2021 RWGS + FT; DAC & CO2 from biogas plant;
350 t/y
INERATEC Germany 2022 RWGS + FT; CO2 from Biogas;

Pioneer plant (Frankfurt) 3.5 kt/y
Nordic Norway 2023/24 RWGS + FT; CO2 from industrial point source; 8
Electrofuel (Herøya) kt/y; 120 Mio €; Outlook 800 kt/y
Norsk e-fuel Norway 2025 Co-Electrolysis; CO2 from DAC;

(Herøya) 8 kt/y; Outlook 800 kt/y
Reallabor Germany 2025 CO2 from cement industry;

Westküste100 (2030) 2025: 30 MW electrolysis; 90 Mio €
(KeroSYN & 2030: 700 MW; Methanol & kerosene
HySCALE100)
Source: EDF based on developers informations
10
Sources: www.nordicelectrofuel.no; www.norsk-e-fuel.com ; www.westkueste100.de ;
www.ineratec.de
29
2.9 Selected Power-to-liquid projects in rest of the world
The next Table presents data for green methanol projects in Canada, Australia and China.
Table 4. PtL projects in rest of the world for Methanol
Bell Bay Australia 2024 RE from hydro and wind; DAC; developed by Abel
(Tasmania) Energy and Thyssen; 100 MW electrolyser;
methanol for export & DME plant for local
industry;
2024: 74 kt/y; 2030: 1 million tons/y; financial
support from Tasmanian Government
RH2C Canada nd 120 kton/y; developed by Renewable Hydrogen

Canada
Liquid Sunshine China (Lanzhou) 2020 1 kton/y, developed by Dalian Institute of

Chemical Physics, outlook to 10 kton/y
Source: EDF based on developers informations
11
Sources: www.abelenergy.com.au; Methanol Institute for China and Canada projects;
http://english.dicp.cas.cn/ns_17179/ue/202011/t20201104_248632.html .
30
3. Activity N° 2: Commercial Analysis
The opportunities for commercialization of synthetic liquid fuels were identified in order to
consider those sectors that are best positioned for the adoption and incorporation of the
solutions. Within this activity, a benchmark of the announced synthetic fuels projects in Chile
was identified to establish the short-term trend for this market, and the potential off-takers
willing to acquire these products.
The main challenges for these technology solutions were described, considering technology
barriers (development stage of the technological solution), economical barriers (price gaps, cost
reduction opportunities and regulatory barriers) and resources barriers (human capital
availability, natural resources in the area and availability of main inputs for the process, for
example the CO2 emissions from nearby processes).
3.1 Benchmark of synthetic fuel projects in Chile
Chile´s portfolio of green hydrogen projects has quickly reached a total number of 60 projects
(Energía Estratégica, 2021). Among these initiatives it is possible to find four e-fuel projects
located in different parts of Chile, as shown in Figure 3.
Haru Oni is the largest e-fuel project in Latin America and will be
located in Cabo Negro Magallanes. The investment for the project is
approximately USD $38 Million and it is planned to produce e-
Methanol and e-Gasoline for export markets. Haru Oni is a pilot plant
which will produce green H2 and e-fuels through a wind turbine (3.4
MW), an electrolyser (1.25 MW which can produce 20,5 kg per hour of
hydrogen), and carbon dioxide captured12 from the atmosphere. The
pilot phase of the project will produce between 500 and 650 tons per
year of distilled methanol and 206 tons of gasoline per year in a first
pilot phase, that will start production in April 2022. For this production
level, and considering the factsheets in the Annex section, the
estimated feedstock demand for the project would be 100 tons of H2,
1.100 tons of water, and 750 tons of CO2 per year.
The project aims to scale-up to reach a total of 55 million liters of e-

fuel in 2024 and 550 million liters in 2026. In May of 2021, Haru Oni
obtained the approval of its Environmental Impact Declaration13
(Electricidad, 2020b) (Electricidad, 2020a) (IEA, 2021).
ENEL presented its 240 MW electrolyser for the future commercial

phase of Haru Oni project, to CORFO’s public call to finance
electrolysers and was awarded with USD 16,9 million of public funds.
Figure 3. E-fuel
projects in Chile
12
Global Thermostat announced the signature of an agreement with HIF to supply direct air capture
equipment that can remove up to a maximum of 250 kg of carbon dioxide per hour from the atmosphere.
13
The company HIF SpA presented in November 18th of 2020 a Declaration of Environmental Assessment
(DIA) which was approved in May 14th of 2021 by Resolución Exenta N° 058/2021 “Califica
Ambientalmente el proyecto piloto de descarbonización y producción de combustibles carbono neutral”.
31
The Hoasis project would be an e-fuel production facility based in the Antofagasta Region. It
would have 3 GW of solar PV capacity to generate electricity for a 2.1 GW electrolysis plant with
an estimated hydrogen production of 102 kton H2/yr (for mining trucks, other mining uses and
fuel cell trucks), and an ammonia plant that will produce 250 kton NH3/yr; potentially it could
also produce e-Methanol in the future (Electricidad, 2020)
METH2 is a pilot plant in Atacama, announced by Sowitec and other companies, to produce H2
and e-Methanol through a 300 MW electrolyser, and a solar, wind and hydro renewable mix for
electricity generation (IEA, 2021) (GIZ, 2021a).
Finally, AMER is a project that considers the installation of a methanol plant in Antofagasta
Region that will produce 60 ktons/yr of e-methanol using renewable energy, green hydrogen
and CO2 captured from a local industrial source. The electrolyser will have a capacity of 80 MW
and will produce 11,8 kton H2/yr. This project was presented by Air Liquide to CORFO’s public
call to finance electrolysers and was awarded in December 29 of 2021 with USD 11,8 million of
public funds14.
3.2 Analysis of local and global market for synthetic fuels
3.2.1 Penetration factor for synthetic fuels

The purpose of this section is to build a forecast based on existing secondary sources to
understand the potential demand for e-fuels in future scenarios. A study made by Frontier
Economics (Frontier Economics, 2018) was taken into consideration to estimate the potential
Power to X (PtX) market size for 2050 (see Figure 4.).
Figure 4. PtX demand shares per sector under different scenarios in 2050.
Source: (Frontier Economics, 2018)
14
http://blog.investchile.gob.cl/chile-attracts-us1-billion-green-hydrogen-investments
32
This reference provides three different demand forecast scenarios:
• High case assumes PtX shares for the European market, which is considered an absolute
upper bound for a future PtX market size.
• On the other hand, the reference case is more conservative and considers that PtX is
adopted once electrification and direct renewable electricity reach its limit. For
example, the range of PtX market penetration is between 10% to 20% in sectors where
renewable electricity and other green fuels, like biofuels, are expected to be the
dominating sources. Under the same scenario, in other sectors like maritime transport
and aviation, the PtX shares are estimated between 50% and 70%, as decarbonization is
more difficult without green synthetic fuels.
• Finally, the low case scenario assumes that other low carbon technologies, such as
renewable electricity or blue hydrogen, take a larger share of the energy market.
Reference scenario was considered for the analysis.
Despite that the source studied only displays the potential PtX demand per sector and not per
fuel, the final PtX penetration factor was determined considering the sector demand of each
fuel based in the experience of the consultant, as shown in next Table 5.
Table 5. PtX penetration percentage in 2050 by Fuel and Sector.
E-Fuel Sector 2050- PtX Penetration (%)
Aviation 70%
Kerosene
Households 10%
Chemical Industry 10%

Methanol
Transport 10%
Heavy duty vehicle 20%
Maritime 50%
Diesel
Light duty vehicle 10%
Industry 10%
Heavy duty vehicle 20%

DME
Industry 10%
Gasoline Light duty vehicle 10%

Source: ImplementaSur based on (Frontier Economics, 2018)
Since penetration factors for each sector are considerably different for kerosene and diesel, to
calculate the final penetration percentage, a weighted average was calculated considering
current demand by each sector (see Table 6 and Table 7).
Table 6 Kerosene average global demand by sector in 2019-2020.
Fuel Sector Global demand (ton)
Aviation 391.000
Kerosene
Household 71.000
Source: (The Federal Government, 2021), (CEICDATA, 2016)
33
Table 7 Diesel average global demand by sector in 2018-2019.
Fuel Sector Global demand (Mtoe)
Heavy duty
5
vehicle
Maritime 210
Light duty
Diesel 850
vehicle
Households 210
Industry 180
Rail 20
Sources: (ICCT, 2018), (Statista, 2020)
Finally, PtX penetration factor demand per fuel in 2050 are shown in Table 8. The result is used
to calculate future PtX demand by fuel for the Chilean and global scenarios.
Table 8. PtX penetration factor in 2050.
Fuel 2050 - PtX Penetration (%)
Diesel 16%
Gasoline 10%
DME 10%
Methanol 10%
Kerosene 70%
Source: ImplementaSur based on (Frontier Economics, 2018)
3.2.2 Growth rate for liquid fuels demand

The expected demand for fossil fuels will depend on the capacity to achieve global low carbon
goals, implementing policies that allow the incorporation of new technology for the different
economic sectors. A strategy that allows us to maintain climate change within 1.5°C temperature
rise will require more ambitious and aggressive strategies, replacing today’s fossil fuels demand
for low carbon technologies that could satisfy tomorrow’s energy demand. Oil demand is
expected to grow until 2030, followed by a decline for the following years that will be steeper
depending on the global actions toward a low carbon economy (T. Kober, 2020).
34
Figure 5 Coal, Oil and Gas demand projections until 2060.
Source: (T. Kober, 2020)
Still, liquid fuels are projected to remain the world’s leading energy source by 2040, even though
demand slowdowns after 2030 (ExxonMobil, 2019). In Figure 6, the expected liquid demand by
region is shown, presenting a contraction of the demand for some regions like Europe, and an
increasing demand for other regions as Asia Pacific. Overall demand will be led by the transport
and industrial sectors (mainly the chemical industry), as it can be seen in the next figures.
Figure 7Figure 6. Liquid fuels demand forecast by region (MBDOE).
Source: (ExxonMobil, 2019)
Figure 7. Liquids fuels demand forecast by sector (EJ).
35
300
250
200
150
100
50
2030
2000
2005
2010
2015
2020
2025
2040
2050
Power generation Industrial
Transportation Residential/Commercial
Total demand
The growth rate for liquid fuel demand was estimated from ExxonMobil energy outlook
(ExxonMobil, 2019), which behaves similar to the Hard Rock scenario from the World Energy
Council’s projections, representing the biggest potential demand for synthetic fuels in the
future.
Since no methanol demand is considered in the previous source, the projections published by
the Methanol Institute (IRENA & Methanol Institute, 2021) were considered, showing a demand
of 100 million ton/year (Mt/yr) for 2019, and a projected demand of 500 Mt/yr for 2050.
36
Table 9. Fuels Growth Rate between 2019 and 2050.
Growth Rate 2020/2050 Worldwide
Fuel Type Growth Rate 2019/2050 Chile (%/Year)
(%/Year)
LPG (DME) -0.7% 1.2%
Gasoline 0.6% -0.3%
Kerosene 2.2% 3.4%
Diesel 0.7% 0.3%
Methanol 0.5% 500 Mton/year for 2050

This result will be used to calculate future PtX demand in the next chapter.
37
3.2.3. Estimates of Chilean and Global Market size for synthetic fuels
In Chile, more than 50% of fossil fuels is dedicated to the transport sector, where the main
demand for liquid fuels comes from diesel, kerosene and gasoline (see Figure 8) (CNE, 2019). For
this reason, the main challenge replacing liquid fuels in Chile will be centered in the transport
sector15.
Figure 8 Chile's PtX potential domestic demand in 2050.
Source: ImplementaSur
Using the previous growth rate and a PtX penetration factor, a 2050 PtX estimation demand is
provided. In the following table, total domestic demand for liquid fuels is presented, followed
by a PtX estimated demand for 2050.
Table 10. Chilean 2019 Fuel Demand and potential 2050 PtX Demand.
2019 – Total Domestic 2050 - PtX Domestic Demand
Fuel
Demand (Million Ton/Year) (Million Ton/Year)
Diesel 8.76 1.37
Gasoline 3.34 0.33
Kerosene 1.58 1.1
Methanol 0 0
DME 0 0
Source: ImplementaSur based on (CNE, 2019))
For 2019, the main demand comes from diesel, followed by gasoline and kerosene. For 2050 PtX
demand, diesel also represents the highest value, but kerosene surpasses gasoline since
transport sector is expected to be electrified, while the aviation sector (linked with kerosene) is
still defining its predominant low carbon technology for the long term, where e-kerosene is a
good solution for that sector.
For the global demand, growth rate and penetration factor were also applied to 2020 net
demand (IEA, 2021a). The result of this exercise show that diesel will also be the most attractive
15
Consumption for electricity generation represents less than 1% of diesel consumption, so it’s not
included in the graphs
38
market for synthetic fuels, followed by kerosene and gasoline, similar to the previous domestic
analysis.
Table 11. Global 2020 Fuel Demand and potential 2050 PtX Demand
2020 - Global Demand 2050 - PtX Global Demand
Fuel
(Million Ton/Year) (Million Ton/Year)
Diesel 1,320.3 208.29
Gasoline 1,038.06 103.49
Kerosene 219.96 159.21
Methanol 100 50
DME 401.79 40.66

(Sources: ImplementaSur)
3.3 Analysis of potential off-takers for synthetic fuels
Currently, different sectors are incentivizing the usage of synthetic fuel for several applications.
These initiatives represent the most proactive niches where synthetic fuels could be positioned
earlier, creating a demand, and finally, a consolidated market for this kind of fuel. In the previous
chapter, global and domestic demand was estimated for synthetic fuels. In the following section,
some of the main collaboration initiatives involving synthetic fuels are identified, giving some
insights of the markets prone for an early adoption of low carbon liquid fuels.
As shown in Table 12 Main enablers per e-fuel., synthetic fuel will participate in more than only
one market, and with this, different actors, will promote the implementation of low carbon
liquid fuels within their sector. For example, in the e-kerosene market, policies related to the
aviation sector would be an important enabler for this fuel.
Some main enablers for the incorporation of e-fuels are described in the following table:
39
Table 12 Main enablers per e-fuel.
E-Fuel Enablers
• Shell is actively supporting e-kerosene production plants. (Dansk Energi, 2020); (NIRAS, 2020)
• International Civil Aviation Organization (ICAO) is pursuing sustainable fuels, and the committee is
drafting a long-term climate target for international aviation, which will be presented in 2022. (The
Federal Government, 2021); (ICAO, 2019a)
Kerosene • CORSIA will allow air carriers to reduce their offsetting obligations by increasing their use of low-carbon
aviation fuels instead, and this policy will be mandatory from 2027. (ICAO, 2019)
• ReFuelEU Aviation policy will directly constrain airline companies to gradually switch to sustainable
aviation fuels (SAF) to reduce their GHG emissions; countries like the UK, the Netherlands, and Germany
are actively considering the incorporation of e-fuels in the aviation sector. (The Federal Government,
2021); (EASA, 2019)
• Projects to introduce methanol-powered fuel cell systems for ship propulsion are underway (IRENA &
Methanol Institute, 2021). Companies like Viking line (1 unit), Ocean network Express (11 units), Stena
Line (1 unit), Innogy HTWG Konstanz (2 units) are currently developing methanol ferries, tourist boats and
chemical tankers (Chatterton, C., 2019). Moreover, the EU-funded FASTWATER project will develop
retrofit kits and methanol engines and demonstrate these in a harbor tugboat, a pilot boat, and a coast
guard vessel. A methanol-powered river cruise vessel design is also included, as well as logistics and
Methanol bunkering, revision of rules and regulations, and crew training. With a budget of 6,35 million euros, this
project started in 2020, and the commissioning date is May 2024 (CORDIS, 2020).
• China has been active in promoting methanol as a transport fuel, and numerous Chinese automotive
manufacturers are offering methanol-powered vehicles (car, vans, trucks, and buses). For example, in
2012 the Chinese government initiated a methanol vehicle pilot of 1,000 vehicles and it is expected that
between the next five years China could reach 50,000 cars, trucks and buses consuming more than
500,000 metric tons of methanol (Zhao, K., 2019).
• International Maritime Organization’s goal is to reduce greenhouse gases emissions from international
shipping by at least 50% by 2050 compared to 2008 levels being e-fuels one of the possible alternatives
(Ash, N. and Scarbrough, T., 2019).
• EU legislation announced to set targets to reduce heavy-duty vehicle CO2 to 15% below 2019 values by
Diesel 2050 (The Royal Society, 2019).
• Audi AG is exploring an e-fuels strategy to provide a compliance pathway for their vehicles which consider
e-diesel. (Yugo M. & Soler A., 2019); (AUDI, 2018)
• Renewable Transport Fuel Obligation (RTFO) in the UK, which oblige UK suppliers to meet a target of a
12.4% mix with renewable fuels by 2032. (Ricardo, 2019); (Department for Transport, 2019)
DME • It wasn´t possible to find an enabler for e-DME
• Renewable Transport Fuel Obligation (RTFO) in the UK
• Porsche confirmed it would be the primary customer for the eFuels project and said it would invest €24
million ($28.6 million), along with a further €9 million from the German government (Porsche, 2020)
Gasoline
• Audi AG is exploring an e-fuels strategy to provide a compliance pathway for their vehicles which consider
e-gasoline (Yugo M. & Soler A., 2019); (AUDI, 2018)
• BMW i Ventures investment in Prometheus plans to produce e-gasoline (BMW, 2021)
(Source: ImplementaSur)
From Table 12, it is noticeable that some types of e-fuels present more enablers in different
degrees of penetration (i.e., globally, continentally, or country level). For example, e-kerosene
40
has two global policies (promoted by ICAO and CORSIA), one European policy (the ReFuelEU
Aviation policy) and one investor (Shell, currently involved in e-kerosene production that
declares to be interested in this type of e-fuel). These considerations let us recognize which e-
fuel could have more off-takers at a global level depending on the type of enablers. As Table 13
displays, e-kerosene has more enablers, followed by e-methanol and e-diesel.
Table 13. Enabler summary in order of relevance by e-fuel.
E-Fuel Enablers
E-Methanol 1 Global Policy, 1 China Policy & 12 Business Development
E-Kerosene 2 Global Policies, 1 EU Policy & 1 Investor
E-Diesel 1 Global Policy, 1 EU Policy, 1 UK Policy & 1 Investor
E-Gasoline 1 UK Policy & 3 Investors
E-DME 0
(Source: ImplementaSur)
3.4 Potential players in the oil & gas sector and in the commodity traders
sector
We have identified two potential groups of players on the Oil &Gas sector that are having or will
have a role in the production and/or commercialization of Hydrogen and synthetic fuels on local,
regional and global markets.
The type of activities in which they are active depends on their experience, expertise as well as
where they have their main operations and we can characterize them as follows:
• Oil & Gas Majors main activities in lowering emissions and carbon neutral fuels
development, in which
✓ They have a diversified approach that considers lowering emissions (including carbon
capture), Hydrogen, Bio Fuels and Synthetic fuels production
✓ European based companies: with stronger focus in participation in the production value
chain either directly or through partnerships supplying technology and investment
✓ US based companies: with stronger focus in technology development to reduce
emissions from their own operations and customers (Gas, Oil and lubricants)
• Commodity Traders (i.e.: Trafigura, Glencore, Vitol, Gunvor, Cargill, etc.) main focus and
approach is a ”buy & sell” business model that:
✓ Can be adapted to synthetic fuels using similar logistics (storage, transport, trading
platform)
✓ Has flexibility and regional/global presence that would be an advantage to buy from and
supply to different markets
✓ Is well known and is present in different commodities markets, that may work to their
advantage and fuels export opportunities
41
Table 14. Few examples from European and American Oil & Gas Companies (Majors)
Company Hydrogen Biofuels Synthetic fuels Carbon Capture &
Storage (CCS)
Shell Production at own Switch fossil based Low Carbon Fuels (LCF) Active in CCS technology
refineries and sales at refineries for Biofuels. JV and Sustainable development & offset
service stations with ethanol producer Aviation Fuels emissions
British Focus on Green Very active in this area. Development of joint Active in CCS technology
Petroleum hydrogen production Joint investment in Brazil projects such as and developing projects in
jointly with renewable for large scale ethanol “Fulcrum - From waste the UK. Alternative
energy companies production and renewable to wingtip” recycling methods of capturing CO2
(i.e.: Orsted) energy with industry
Repsol Active participation in Advanced Biofuels Joint development of Focus shifted from CCS to
the European Green production at some of synthetic fuels project CCUS (Carbon Capture,
Deal with a project their refineries in Europe in Bilbao (Spain) by Storage and Use) to be
that will build and and joint R&D with Iberia Petronor Refinery. COD used for synthetic fuels
operate a 100MW for testing and using bioJet in 2024 production
electrolyser plant
ExxonMobil Focus to develop Focus on biofuels Technology Active in CCS technology
breakthrough production that do not development for development & offset
solutions in hydrogen compete with water or synthetic gasolines and emissions in their own
large scale production food supplies fuels to support global operations
customers/partner (i.e:
Porsche in Haru Oni
project)
Chevron Strategic alliances Investments being made Both synthetic Diesel Similar focus as Shell, BP
with engine to produce biofuels in and Jet (kerosene) to and ExxonMobil on
manufacturers to proprietary refiners and be produced at their technology development
develop Hydrogen use partnerships in ethanol own refineries on CCS.
and storage. Also production (synthetic or biofuel)
active in green H2
production projects in
the US
Sources: (Shell, SHELL HYDROGEN, 2021) ; (Shell, 2021a) ; (Shell, 2021b) ; (BP, 2020) ; (BP, 2019) ; (BP, 2018) ; (BP,
2021) ; (Repsol, 2021) ; (Repsol, 2020) ; (Repsol, 2021a) ; (Exxonmobil, 2021) ; (Exxonmobil, 2021a) ; (Chevron,
2021) ; (Chevron, 2021a)
42
3.5 Analysis of existing infrastructure & logistics in Magallanes
The following analysis is focused in the area of Cabo Negro in the Magallanes region, to assess
the opportunity to utilize existing infrastructure and logistics in the area.
The existing related logistic infrastructure in Magallanes is mostly owned by ENAP, which was
originally built to transport liquids and gas from different fields into Gregorio refinery, the city
of Punta Arenas and export facilities in Cabo Negro that are generally operating and in good
conditions (¡Error! No se encuentra el origen de la referencia.).
Figure 9. Enap Logistics in Magallanes
Source: Enap
The main assets and their current utilization is described below:
• Gas and liquid fuels pipelines from the oil and gas fields to the Refinery and gas
treatment units
• Pipeline to Cabo Negro from Enap (currently is being used for LPG transportation)
• Pipeline to Cabo Negro from Methanex (currently is being used for Methanol)
• Two piers16 under operation currently in Cabo Negro
✓ Pier 1 with a bridge of 277 meters and a draft of 14 meters, for type A ships of
100.063 tons and type B ships of 18.000 tons, with two ducts for loading liquefied
gas and products, which is fully utilized by Enap (probably will be used by HIS project
in Phase1)
✓ Pier 2, inaugurated in 2003, with a bridge of 455 meters and a draft of 14 meters,
for type A ships of 100.063 tons and type B ships of 18.000 tons, with one duct for
loading methanol; it is under contract with Methanex (not fully utilized) and Enap
has primary rights for the available capacity
16
Source: C.P.P.A Ordinario N° 12.600/510 issued by Directemar in August 14 of 2014 “Authorizes the
Maritime Terminal of Cabo Negro and establishes its operating conditions”.
43
Figure 10. Gasducts, poliducts and piers in Cabo Negro
Source: EDF based on CNE Geoportal and ENAP
Based on the current utilization of the above-mentioned assets, we believe that is necessary to
consider that this and other projects in the region will need to make new investments to
transport and export their products. However, there is an opportunity to look for joint
investments to reduce Capex and avoid unnecessary redundancy.
44
3.6 Main barriers for the development of a synthetic fuel market
In the following chapter, the main challenges for synthetic fuels solutions will be described,
considering economic barriers, resources barriers and regulation barriers. These are aspects that
must be identified before the implementation of the project, so they can be considered in the
design process of the plant.
3.6.1 Economic Barriers

With a growing interest for low carbon technologies, competition between the most cost-
effective solution for the long term is perceived. For instance, electric motors could have an
advantage over e-fuels for offering a solution for light-duty vehicles, municipal buses, and trucks
operating over short distances. Electric vehicles (EV), as can be seen in Figure 11, have
consolidated their introduction into the market, increasing their participation each year.
Although the demand for vehicles continues to grow, it is projected that the percentage of
battery electric vehicles will progressively increase, capturing a demand for combustion vehicles.
Figure 11. Outlook for annual global passenger-car and light-duty vehicle sales, to 2030.
Source: (Deloitte, 2020)
Another relevant fact that could cause a barrier for e-fuels is that, while battery-electric vehicles
have an overall energy efficiency close to 69%, and fuel cell vehicles an efficiency around 26-
35%, e-fuel vehicles have only an efficiency around 13-15% (Yugo M. & Soler A., 2019).
In the aviation sector a similar scenario is seen. Currently, aircraft manufacturers are investing
in the development of electric and hydrogen-powered aircraft (Dansk Energi, 2020); for routes
between 38-170 km, battery aircraft have demonstrated to be a feasible solution. In fact, it is
estimated that the first commercial electric aircraft could be ready by 2022 (for 9-12
passengers), and bigger electric aircraft are expected to be ready by 2030 (50-100 passengers)
(NIRAS, 2020). Airbus17 is exploring hybrid-hydrogen aircraft and expects to have the first
commercial zero-emissions aircraft for 2035. In addition, British Airways, Shell Ventures and
17
Airbus announced its Zeroe concept aircraft which consists of liquid hydrogen fuel for combustion with
oxygen in modified gas turbine engines, in addition to hydrogen fuel cells to create electric power. The
three concept models are Turboprop (for less than 100 passengers and 1.000 miles range) and Blended-
Wing body and Turbofan (for less than 200 passengers and 2.000 miles range). Source:
https://www.airbus.com/en/innovation/zero-emission/hydrogen/zeroe
45
Amazon have invested in ZeroAvia, a British-American hydrogen-electric aircraft developer (GIZ,
2021a). Moreover, many companies are interested in electric aircraft like easyJet, American
aircraft (Boeing and JetBlue), and Wideroe Norway (NIRAS, 2020). Recently, there have been
two sustainable aviation fuel news from Kawasaki and United Airlines. Kawasaki18 announced a
hydrogen-powered aircraft supported by NEDO Green Innovation Fund, within the next 10
years. And United Airlines19 became the first airline in the world to use 100% sustainable
aviation fuel (SAF) on a passenger flight.
E-methanol, even though it competes with renewable feedstock like biomass, green hydrogen,
and renewable electricity (IRENA & Methanol Institute, 2021), it also competes with some e-
fuels, like e-gasoline and e-diesel. E-methanol density is only about half of the volumetric energy
density of gasoline and diesel, it has a lower heating value (50% lower than diesel and gasoline),
and unlike other fuels, methanol needs a powertrain development for most of its applications
(Yugo M. & Soler A., 2019).
As an advantage, e-methanol can eventually be used as fuel in the shipping sector, but this will
require the conversion of existing ships and port infrastructure. By the end of 2019, 10 ships
were running on methanol and two others were under construction (Singapore Maritime
Institute, 2021), and it is estimated that it could take more than 15 years to change the global
fleet into this technology since container ships have a lifetime of 25-30 years (Dansk Energi,
2020).
e-DME is a fuel considered a possible low-emission replacement for diesel. Furthermore, DME
has a low heating value that is 50% less than e-diesel or e-gasoline, but it requires additional
infrastructure and powertrains development for its applications (Yugo M. & Soler A., 2019).
Finally, capital cost of producing PtX, high cost of CO2 capture process, and producing green
hydrogen would represent a main barrier to compete with traditional fossil fuels. For instance,
under current conditions, costs for PtX are expected to be 3 to 5 times higher than costs for
conventional fuel (ICAO, 2019) (IRENA & Methanol Institute, 2021). In relation to this, it is
important to also take into account that green hydrogen production costs, which constitute
most of the production costs for PtX, are expected to fall by around 10-25% towards 2030 (Dansk
Energi, 2020).
3.6.2 Resources Barriers

PtX production process requires a series of resources, such as human capital, CO2, and water
feedstock, which could demean the design and operation of the plant. Regarding human capital,
Chile is a technology taker, lacking a manufacturing industry for this kind of applications. For this
reason, the operation and maintenance of these plants will rely on the company of origin of the
technology (GIZ, 2021). Currently, 817 medium and large companies could provide services for
18
Kawasaki´s project has three research areas: hydrogen aircraft engine combustor, liquefied hydrogen
fuel storage tanks and hydrogen-aircraft architecture concept. Source:
https://global.kawasaki.com/en/corp/newsroom/news/detail/?f=20211105_3638
19
In December 1st 2021, the first United Airlines passenger flight with sustainable aviation fuel (SAF)
carried 100 passengers from Chicago to Washington; the flight was a partnership with Boeing, CFM,
Virent and World Energy (world´s first commercial biofuel producer). One engine used 500 gallons of
SAF and the other engine used traditional jet fuel. Source:
https://www.united.com/es/us/newsroom/announcements/united-to-become-first-in-aviation-history-
to-fly-aircraft-full-of-passengers-using-100-sustainable-fuel
46
the development of a synthetic fuel project, but none of them are located in the Magallanes
Region (GIZ & HINICIO Chile, 2021).
In relation to specialized human capital dealing with green hydrogen, in Chile there are only a
few cases of plants that produce green hydrogen from electrolysis: INDURA S.A Vidrios Lirquén,
located in Bío Bío Region with a 200 𝑁𝑚3 /ℎ capacity for tin bath protection in float glass;
INDURA S.A Graneros located in O´Higgins Region which produces hydrogen for industrial
feedstock; ENEL/EPS Cerro Pabellón located in Atacama Region, which uses hydrogen
production as an energy storage system; and ANGLO AMERICAN which produces green
hydrogen in Los Bronces from PV energy to be used by a fork lift through a hydrogen refueling
station (GIZ & Centro de Energía UC, 2020).
This evidences an important domestic human capital gap, which has been addressed through
the creation of academic courses and programs involving hydrogen production and usage. In
Table 15 some of the current academic initiatives for the development of human capital are
listed.
Table 15 Career, course, or postgraduate related to green hydrogen in Chile.
Institution Career, Course or Postgraduate
Inacap Renewable energy and energy engineering technician
Diploma in Green Hydrogen, Diploma in Hydrogen Technologies,
Pontifical Catholic
Green Hydrogen course, Green hydrogen production course, and
University of Chile
Green hydrogen storage and use course
Federico Santa Maria
Diploma Applied Hydrogen Technologies
Technical University
University of Santiago de
Hydrogen Economics Diploma
Chile
Bernardo O'Higgins Master in Sustainable Energy Management and Technological
University Innovation in Green Hydrogen
Sources (UBO, 2021) (La Clase Ejecutiva UC, 2021), (USM, 2021), (USACH, 2020), (INACAP, 2021), (La Clase Ejecutiva
UC, 2021a)
On the other hand, the CO2 feedstock will involve a significant role in the feasibility of the
project. In Chile, 54 million tons of CO2 are emitted from specific sources, mainly from the energy
sector. In Magallanes nevertheless, only 253 ktons of CO2 are emitted (0.47 % of the total
amount nationwide) (GIZ & INODÚ, 2021). The majority of the CO2 emissions from industries are
located in the south-central area of the country, not corresponding with the areas with the most
significant potential for generating renewable energy in Chile (GIZ & INODÚ, 2021).
In the case of the Magallanes Region, the CO2 emissions are mainly produced by the electricity
sector, mainly involving Edelmag (Empresa Eléctrica de Magallanes) which emits 183 ktons of
CO2 in its diesel generation units (located in Tres Puentes, Porvenir, Mina Invierno, Puerto
Williams, Punta Arenas, and Puerto Natales), see next table. The second most important
emission source in Magallanes is Methanex, which produces methanol from natural gas,
emitting almost 150 ktons of CO2 to the atmosphere. Finally, the National Petrol Company
(ENAP), is the third most important CO2 feedstock in the region, with 55 ktons of CO2 emissions
from its processes to refine oil and natural gas (GIZ & INODÚ, 2021). Even though Methanex and
the electricity sector could be an interesting alternative for CO2 feedstock, it is essential to take
into consideration the emission concentration of the sources, and the transportation costs for
CO2 (GIZ & INODÚ, 2021).
47
Table 16. Possible sources for the capture of CO2 emissions in the Magallanes Region.
Company CO2 emissions (ktons)
Edelmag (6 power plants) 183
Methanex 150
ENAP 55 (approx.)
Source: (GIZ & INODÚ, 2021)
Figure 12. Location of Edelmag´s CO2 sources in the Magallanes Region
Source: Edelmag
Finally, another crucial resource is water, which could come from the continent (rivers, streams,
wells) or from the Estrecho de Magallanes marine water (desalinated water). In Magallanes, an
Atlas made by Fraunhofer IEE (Fraunhofer IEE, 2021), shows the PtX potential in the region, and
the type of water that is recommended to use depending on the location and the access to the
source (see Figure 13).
48
Figure 13. PtX potential location in Magallanes Region, its renewable energy source, and its water sources.
Source: (Fraunhofer IEE, 2021)
As can be seen, in Cabo Negro the recommended water source is coastal water involving the
cost of water desalination. However, a reasonable consideration is that water stress is low in the
region, and the use of continental water could be a good alternative in other location points
(Figure 14.).
Figure 14. Water Stress in Magallanes Region.
Source: (World Resources Institute, 2019)
49
3.6.3 Regulatory Barriers
Hydrogen has been used for several years in Chile, enabling safety protocols for the handling
and use of this fuel, but that are insufficient for hydrogen energy applications since the
massification of this technology will require specific regulations not treated in the regulations of
hazardous substances (GIZ & Ministerio de Energía, 2020). The National Hydrogen Strategy
declares the intention to work towards a regulation that will allow the piloting and authorization
of projects that do not have an established regulation to date (Ministerio de Energía, 2020). In
this regard, the Ministry of Energy together with the German Cooperation Agency (GIZ) have
defined a regulatory plan to address the gaps in this area, which establishes goals for the short,
medium, and long term (GIZ & Ministerio de Energía, 2020).
The first regulatory action was the definition of hydrogen as a fuel, giving greater power to the
Ministry of Energy to develop a regulation in this matter (GIZ & Ministerio de Energía, 2020).
This was remedied through the Energy Efficiency Law, published on February 13, 2021, which
establishes hydrogen as a fuel (Ministerio de Energía, 2021). Currently there is a technical
committee formed by the Ministry of Energy, the Superintendence of Electricity and Fuels (SEC),
the National Energy Commission (CNE), the Ministry of Mining, and the National Service of
Geology and Mining (Sernageomin) in charge of drafting the general regulations for hydrogen
installations for production, conditioning, storage, land transport, and consumption systems,
which will consider also the participation of the private sector (Generadoras de Chile, 2021).
In addition, the Ministry of Energy has recently published two guides for special hydrogen
projects. One of these guides was a collaboration with the Superintendence of Electricity and
Fuels (Ministerio de Energía y SEC, 2021) and its objective is to help those companies interested
in implementing hydrogen projects. The other one was a collaboration with the Ministry of
Mining (SERNAGEOMIN, 2021), created to facilitate the procedures for mining companies to
develop hydrogen pilot projects. Both guides set out the process for meeting the requirements
of the respective entity according to the area where the project will be developed (SEC or
Sernageomin), the documents to be delivered, and the international regulations that may apply
to the project, which must be safeguarded.
These projects, depending on their complexity and characteristics, must be submitted to the
Environmental Impact Assessment System (SEIA), which may delay or suspend the approval of
the project if the minimum requirements are not met. To obtain an Environmental Resolution
(RCA) for mid or large scale projects, it could take between 1 to 3 years for the approval of an
Environmental Assessment Study-EIA (GIZ, 2020). Depending on the size and the impact of
projects, this terms can be reduced; for instance, Haru Oni obtained an RCA for its pilot project
in a 6 month period after the presentation of an Environmental Assessment Declaration-DIA
(Pontificia Universidad Católica de Chile, 2021).
Finally, it should be noted that Chile currently has no standard or definition for green hydrogen
origin certificate, so today it is difficult to differentiate it from the gray hydrogen consumed by
the food industry, refineries, and glass, among others. In this sense, the Ministry of Energy is
working on the implementation of a traceability system for both energies (through the Renova
program), and green hydrogen, in order to differentiate this commodity and be able to access
customers and markets seeking the green attribute in this fuel. In addition, there is currently no
traceability or coordination to classify the carbon dioxide coming from an unavoidable source,
which would allow the synthetic fuel to be classified as a renewable fuel. In this sense, any
50
certification system will likely be in line with international certifications that may be set up
before, such as the Renewable fuels of non-biological origin (RFNBOs) under development and
promoted by the ISCC (ISCC, 2021), the CertifHy Standard, or the taxonomy from the European
Union.
3.7 Conclusion
A growing number of green hydrogen projects have been announced in the past year, especially
since the issuance of the National Strategy for Green Hydrogen, reaching a total number of more
than 60 projects. Even if the core of development projects is centered in ammonia production
and industrial applications, 3 synthetic fuel projects have been identified, where the Haru Oni
project, developed by High Innovative Fuels (HIF) is the most characteristic one in this area.
The liquid fuel demand is expected to grow until 2030, followed by a decline that will depend on
the countries’ commitment toward a low carbon economy. E-diesel is expected to represent the
highest demand in the long term, followed by e-kerosene and e-gasoline. The reason is that e-
diesel has more sectors of applications (such as shipping, heavy-duty vehicles, and industrial
sector), unlike gasoline (which only has light-duty vehicles as its main applications and which will
have a direct competition with the growing market of battery electric vehicles-BEV). On the
other hand, for e-kerosene, the aviation sector represents an important demand for this fuel,
with low potential competition from other low carbon solutions as biofuels and electric aircrafts.
Regarding alliances and potential enablers for the creation of a synthetic fuel market, e-
kerosene is the e-fuel with more enablers, or potential off-takers, taking into consideration
international initiatives and goals to reduce CO2 emissions in the aviation sector. E-Methanol
and e-diesel are the following two sectors with more initiatives to leverage demand for these
fuels, motivated mainly by their capacity to be used in the shipping sector. However,
implementing e-methanol in the shipping sector will require the conversion of existing
infrastructure, where it could take more than 15 years to change the entire global float. In
contrast, e-diesel, e-kerosene and e-gasoline will be used in traditional infrastructure, facilitating
the adoption of these fuels.
Although several initiatives for encouraging the use of synthetic fuels have been identified, the
role of mayor Oil & Gas companies, as well as other stakeholders in the market, as for example,
Traders, will have an important role in the consolidation of the market. Domestically, ENAP and
Methanex will play a crucial role to facilitate infrastructure or create joint ventures where their
experience and participation could optimize transport and export infrastructure investments.
Additionally, an assessment of the main barriers that this market will face was performed. Here,
for Magallanes context, CO2 feedstock will require Direct Air Capture Systems (DAC) since no
important CO2 emission sources were identified in the region. On the other hand, water
provision shall be assessed depending on the location of the project, where continental or
coastal water resources should be taken into account (in the case of marine water a desalination
plant must be considered).
Finally, there is still a regulatory gap to allow clear rules for the development of this market,
where the public and private sector are working jointly to address these challenges. Still, a
priorization of these kind of projects is identified, and the observance of environmental
requirements and appropiate approval timings, can facilitate the implementation of green
hydrogen projects in the region.
51
4. Activity 3: Matrix Evaluation
Activity 3 was carried out through a matrix that includes all synthetic fuels from the different
production processes identified in Activity 1. Each of these synthetic fuels was evaluated with
different environmental, strategic, technical and commercial criteria. The commercial criteria
included the results from Activity 2.
Some criterion had a higher weight than others, and this weight was duly justified. The
evaluation resulted in scores assigned to each of these synthetic fuels, and concluded with the
most suitable solution for the specific case. All ranking criteria and their associated score (e.g.
from 1 to 10 for example) was explained in detail by a clear definition of each criterion and
justification of the score given. Justification was based on the consultant´s experience and sound
evidence.
Hypotheses were made regarding possible locations of the installation, considering comparative
criteria (proximity to a water source, proximity to a port, existence of industries that consume
the product). At this stage, no other criteria was taken into consideration for the definition of
location such as local building permits, geotechnical criteria that impact civil engineering, the
presence of networks that could encroach on the industrial site to be created, possible
competition with other emerging projects, or others.
From this size installation, a plan for sequential scale-up was proposed to IDB and ME.
4.1 Description of evaluation matrix to compare synth fuels
Activity 3 was carried out through a matrix that evaluates all synthetic fuels from the different
production processes identified in Activity 1:
1. Methanol from CO2

2. Gasoline from Methanol
3. DME (Dimethyl Ether) from Methanol
4. Kerosene from Methanol
5. FT Diesel Syngas from Co-Electrolysis
6. FT Diesel Syngas from RWGS (Reverse Water Gas Shift)
7. Kerosene Syngas from Co-Electrolysis
8. Kerosene Syngas from RWGS (Reverse Water Gas Shift)
The matrix is a tool (see the excel file in Annex) for comparing advantages and inconveniences
of each of the fuels based on 13 specific sub-criteria categorized in four topics or groups:
environmental, strategic, technical and commercial.
Environmental impact
CO2
Water Safety Other indirect
emissions
consumption aspects effects
mitigation
Strategic
Off takers presence Prospective
52
Technical
Technological maturity Transformation efficiency Use for energy storage
Commercial
Production costs Competition Market size Domestic Market size Internationally
Instructions to use the matrix
1. In the "Criteria and weight" tab, the user can customize weightings to match current
priorities. A neutral proposition is made weighting 25% each of the groups, but the user
can modify it.
2. In the "Synthetic Fuel Scoring" tab, a ranking of each project on a scale from 1 to 10 has
been made, based on how well it meets the selection criteria. As this are the scores at
the present moment, the user could later modify the scoring according to evolutions of
technologies, opportunities, business, off takers, markets, etc. The current vision of the
matrix corresponds to the analysis made by the consultant and the inputs from Activities
1 and 2.
3. In the "Ranking results" tab, the evaluation of the scores is presented, to facilitate the
selection of the most competitive fuels to be produced.
4.2 Definition of selected criteria and weight
The following definitions were considered regarding the sub-criteria for the matrix:
1. Water consumption: Water consumption for the plant in kg H2O/kg fuel

2. CO2 eq. emissions mitigation: Avoided CO2 eq. per ton of product; compared to
fossil/biofuel (in tCO2 avoided/tfuel)
3. Safety aspects: ATEX20 and toxicity risks
4. Other indirect effects: Waste Heat, emissions at end-use.
5. Off takers presence: Number of identified off takers
6. Prospective: Number of similar projects/activities onging worldwide
7. Technological maturity: Technology Readiness Level defined as TRL from 1 to 9
8. Transformation efficiency: PtX efficiency [%]
9. Use for energy storage: Energy density/ Hydrogen content of product
10. Production costs: Capital costs for the implementation of the plant in USD/ MWhfuel
11. Competition: Evaluation of the gap with fossil equivalent in USD/ kgfuel; Alternative
biofuels
12. Market size Domestic: Penetration forecast for synthetic fuel for 2050 in Chile
13. Market size Internationally: Penetration forecast for synthetic fuel for 2050
internationally
20
ATEX is translated in english as Devices intended for use in explosive atmospheres, and comes from the
French “Appareils destinés à être utilisés en ATmosphères Explosives”.
53
Weighting
For a first approach, the weighting of criteria was made considering all groups on the same level
(25% for each of the four groups), without prioritizing any of the dimensions. This corresponds
to the “neutral scenario”.
Environmental impact Strategic Technical Commercial
25% 25% 25% 25%

Water Prosp Transformat Use for
CO2 Other Off Technologic Production Market size Market size
consumptio Safety ectiv ion energy Competition
eq. effects takers al maturity costs Domestic International
n e efficiency storage
5% 10% 5% 5% 20% 5% 15% 5% 5% 10% 5% 5% 5%
Two specific criterion have important weights compared to the others:

▪ Off takers: E-fuel projects usually need long term contracts with off takers in order to
lower the discount rate, parameter that would impact the Levelized Cost of Hydrogen
(LCOH).
▪ Technological maturity: 15% weight, as the project is to be considered in a short term
period. The TRL has to be the highest, with technologies already proven and
commercialized.
On the other hand, the following criterion have 10% weight:

▪ CO2 eq. emissions mitigation: the reduction of greenhouse gas is the driver for
developing synthetic fuels projects. This parameter is key.
▪ Production costs: capital costs are roughly defined in order to compare technologies.
Activities 4 to 7 will allow more precision in the costs estimations for the selected
synthetic fuel.
▪ Market size (both domestic and international): Penetration forecast in Chile and
internationally is important to define the commercial potential of each of the fuels.
Finally, the criteria that have been considered with a weight of 5% are the following:
▪ Water consumption: this could be a key element to consider when deciding the location
and access to water for a project. Indeed electrolysis will need important volumes of
pure water in case of big/giga projects.
▪ Safety: safety aspects need to be included in the matrix. The accidentology of this kind
of projects is associated to ATEX and toxicity risks.
▪ Other environmental indirect effects as for example waste heat and emissions at end
use.
▪ Prospective considerations as the number of similar projects or activities ongoing in
Chile and worldwide.
▪ Transformation efficiency: the power to X transformation efficiency is a criteria to
compare the global energetic efficiency of different processes.
▪ Use for energy storage: the energy density is an important factor that defines the
quantity of energy that can be stored in a certain capacity.
▪ Competition: Evaluation of the gap with fossil equivalent is important when comparing
advantages and barriers of different synthetic fuels.
54
4.3 Scoring summary for the 8 fuels
Each of the criteria was scored in the neutral scenario matrix for all synthetic fuels considering
the analysis presented in Activities 1 and 2.
Total Environmental impact Strategic Technical Commercial
25% 25% 25% 25%
Global Water
CO2 eq.
Safety Other indirect Off takers Technological Transformati
Use for
Production Market size Market size
Synthetic fuel emissions Prospective energy Competition
Score consumption
mitigation
aspects effects presence maturity on efficiency
storage
costs domestic international
Weight 5% 10% 5% 5% 20% 5% 15% 5% 5% 10% 5% 5% 5%

6,7 Methanol from CO2 0,50 0,25 0,30 0,25 1,20 0,50 1,50 0,50 0,05 1,00 0,50 0,00 0,15
3,9 Gasoline from Methanol 0,05 0,25 0,30 0,25 0,60 0,05 0,75 0,05 0,40 0,50 0,25 0,15 0,25
3,1 DME from Methanol 0,15 0,50 0,05 0,50 0,00 0,00 0,75 0,05 0,25 0,50 0,25 0,00 0,10
5,2 Kerozene from Methanol 0,05 0,25 0,15 0,25 2,00 0,30 0,15 0,05 0,50 0,50 0,15 0,45 0,40
4,5 FT Diesel Syngas from Co-Electrolysis 0,05 0,25 0,50 0,25 1,20 0,20 0,15 0,25 0,50 0,10 0,05 0,50 0,50
4,5 FT-Diesel Syngas from RWGS 0,05 0,25 0,50 0,25 1,20 0,20 0,15 0,25 0,50 0,10 0,05 0,50 0,50
5,0 Kerozene Syngas from Co-Electrolysis 0,05 0,25 0,15 0,25 2,00 0,30 0,15 0,25 0,50 0,10 0,15 0,45 0,40
5,0 Kerozene Syngas from RWGS 0,05 0,25 0,15 0,25 2,00 0,30 0,15 0,25 0,50 0,10 0,15 0,45 0,40
The table below presents the scoring of each of the synthetic fuels on the neutral scenario.
Global Score Synthetic fuel
6,7 Methanol from CO2

5,2 Kerosene from Methanol
5,0 Kerosene Syngas from Co-Electrolysis
5,0 Kerosene Syngas from RWGS
4,5 FT Diesel Syngas from Co-Electrolysis
4,5 FT Diesel Syngas from RWGS
3,9 Gasoline from Methanol
3,1 DME from Methanol
The methanol from CO2 has the better global score with 6,7 followed by Kerosene from
methanol with a global score of 5,2.
Besides, four other scenarios were evaluated giving a higher weighting to a specific group.
55
Environmental scenario
Strategic scenario
56
Technical scenario
Commercial scenario
57
Conclusion
Every scenario resulted in Methanol as the preferred option with following scores:
In synthesis, the evaluation matrix presents methanol as the fuel with the highest score and
potential to be developed for starting the synthetic fuel plant in the Magallanes region. The main
advantages of developing a methanol project are summarized below.
Environmental:
• Less dangerous to the environment in case of a leakage

• Lower risk of flammability compared to gasoline
Strategic
• Existence of a potential off taker/coinvestor partner for green methanol, already

established in the region (Methanex21)
• Opportunity to use existent infrastructure
• Green methanol could be a clean alternative to face the risk identified by Methanex that
its gas supply from Chile and Argentina could be reduced in mid/long term
• Other global players in the methanol industry could be interested
Technical
• Methanol has been traded and transported as a chemical for decades

• Technological maturity in phase with short term projects
• Can be handled and transported under normal temperatures and pressure
• Storage, handling and properties are known and documented
• Can work as enabler for other synth-fuels (when markets and technology are more
consolidated)
Commercial
• Green methanol is the most cost competitive synthetic fuel compared to its grey option
• World production of 98 million tonnes per year in 2019; production doubled in past
decade; market size in Europe is increasing
• Has potential as resource for maritime energy transition
21
Methanex has a worldwide annual operating capacity of 9.150 ktonnes, of which 1.720 are located in
Chile. Its production in Chile reached 1.050 ktonnes in 2019 and 836 in 2020, according to its Annual
Report 2020.
58
4.4 Recommendations for the specific technical solution and sizing for the
process plant
The consultant recommends developing a synthetic methanol production plant of a size implying
an electrolyser capacity of about 20 to 30 MW, which is a well-known and usual initial capacity
for projects being announced in Europe currently. It is worth mentioning that a 30 MW
electrolyser capacity is still not a fully commercial plant size22, in particular for a methanol-to-X
process.
Ramping up will be determined among other aspects, on the technical limits of the Direct Air
Capture - DAC maximum currently installed capacities and the short term projections of key
vendors. We consider that the available area for the wind farm in Magallanes Region is not a
limiting factor for the scaling up; however, the distances from the wind farm to the synthetic
fuel plant and the distance from the plant to the export infrastructure are crucial elements for
the technical-economical analysis.
In the following Table a referential information is presented which corresponds to first

approximations to the potential sizing of a synthetic fuel plant. The theoretical and optimistic
maximum production of e-methanol are presented only as a reference, and as starting point,
and will be updated with a more in depth analysis of the following activities of the present study.
There are usually several consecutive phases in a synthetic fuel project (this happens in green
H2 projects too). The following table shows our proposition of plan for the scaling up:
Pilot project phase:
Starting with a pilot project from 1 to 5 MW electrolyser (similar size to Haru Oni project). The
pilot project is an initial small-scale implementation that is used to prove the viability of the
concept, particularly when it involves the exploration of innovative technologies. This is the case
for synthetic fuels projects.
The pilot project enables the organization required to manage the risk of a new project and
identify any deficiencies before substantial resources are committed.
At this scale, in general, the product is not competitive in an economical point of view but it is
an important phase to go through as it confirms whether or not a process or product will work
well in a given environment. The goal here is to test the project and to gather insights from the
results and the lessons learned. This improves the quality of the full-scale rollout.
Scaling up phase:
Scaling up to a 20MW or 30 MW electrolyser as a first phase for an industrial project.
This size of electrolyser capacity is being planned for on-going green hydrogen projects in
Europe, so engineering and procurement associated costs could be more competitive than using
other “custom-made” electrolyser size capacities.
22
The largest operating electrolyser in the world is 20 MW in total in Bécancour (Canada). The largest
operating PtL projects in Europe are shown in section 2.6 and include 2MW electrolyser in Carbon2Chem
project in Germany and 0,6 MW electrolyser in MefCO2 project in Germany. Announced PtL methanol
projects are bigger in size, but are under evaluation or in prefeasibility stages.
59
Ramp-up phase:
The ramp up will be determined by different aspects that are going to be treated in a qualitative
manner:
• Technical limits of the Direct Air Capture-DAC technologies (maximum currently

installed capacities)
• Short term projections of key vendors of electrolysers, methanol plants, desalination
units and DAC plants
• Market response of off-takers to e-methanol (potentiality of long terms contracts)
• Environmental limitations
• Access to subsidies and presence of partnerships, investors and funding
• Favourable sites in Cabo Negro
• Cost efficiency of scaling up or future diversification of other end products (for example
keeping the same capacities but adding another plant to produce other products from
e-methanol like e-gasoline or e-kerosene)
In the following Table, the theoretical and optimistic maximum productions of e-methanol are
presented only as a reference, and as starting point, and will be updated with a more in depth
analysis during the following Activities of the present study. These first approximations will be
analyzed and optimised for the selected plant size.
The consultant suggests 30 MW to be the plant to be studied in the engineering and next
phases of the present study.
Table 17. Referential theoretical sizing and production for e-methanol plant
Wind farm Electrolyser Area (hectares) CO2 captured Max. hydrogen e-methanol
(MW) (MW) @ 7.4 há per (kton/year) production production
MW (kton/year) (kton/year)
2 1 16 1 0,2 1
67 30 487 34 5 22
330 150 2.409 171 24 111
1.000 450 7.300 514 71 333

Source: EDF
The Ministry of Energy defined Cabo Negro as the area for the location of the plant. With that
information, the consultant identified three possible precise areas, shown on the figure below
(Site 1 with 170 hectares, Site 2 with 412 hectares, Site 3 with 870 hectares).
60
Figure 15. Analysed locations in Cabo Negro near Enap & Methanex
Source: EDF
The three areas have the advantages to be near the existing industrial and export infrastructures
(Methanex and Enap industrial sites), the proximity to the ocean water and the proximity to a
potential off taker/coinvestor partner for an e-methanol production such as Methanex.
Site 1 was identified as property of ENAP, which probably imposes limitations to its usage. Area
2 is close to the ocean waters, but has multiple owners which could limit the rental agreements.
After analysis and discussions with the Ministry of Energy and IDB, it was agreed that the
consultant will choose Area 3 for the plant, which has proximity to 9N route, and apparently has
a reduced number of land owners.
Other assumptions
• Consultant will assume that the water resource is seawater

• Gas grid available close to the project: consultant will assume the length based on GIS
information
• No back up transmission line will be considered
• CO2 will be captured from the air (even if the site is close to Methanex, ENAP and
industries)
• Hourly wind generation profiles in Cabo Negro will be processed from ME’s explorador
eólico : http://eolico.minenergia.cl/exploracion (no 10 minute profiles are available in
this source)
• Back-up generation units if needed, will be based on natural gas
• Aspects that will not be considered for the design: building permits, geotechnical
criteria, socio-environmental conflicts with other industries or infrastructure, conflict of
overlapping areas with CEOPs (special oil and gas exploration and exploitation
contracts).
61
Process plant equipment
The main equipment considered for the e-methanol plant included are the following:
▪ Dedicated wind farm

▪ Green hydrogen production plant
▪ Direct Air Capture (DAC) process plant
▪ Methanol production plant and storage
▪ Cooling systems
▪ Water treatment installation (desalination, demineralization)
62
5. Activity N° 4: Technologies & providers
In Activity 4, an overview of commercially available technologies and service providers that
could participate of the development of the plant was made, taking into account existing similar
projects globally. The main systems of The Plant were studied: wind farm, electrolysis plant,
Direct Air Capture (DAC) system, desalination plant and methanolation unit.
The content of this section includes:
• Considerations taken for the preliminary sizing.

• Electrolysis technology (Alkaline, PEM, high temperature), key suppliers and projects.
• Direct Air Capture, main considerations, technology assessment, suppliers and projects.
• Methanol process considerations, projects and technology providers.
5.1 Overview of equipment and providers
A simplified diagram showing the main components of The Plant is shown below:
Figure 16. Simplified Diagram of The Plant showing main systems
Source: EDF
H2 production value shown in the diagram is a maximum flowrate, when the installation is fed
with energy 24 hours per day, at the design load fed with 46 kton/year of demineralized water.
Considering the maximum production of green hydrogen (5 kton/year) and a reasonable
conversion rate H2/MeOH of (94%), the maximum production of e-methanol is approximately
22 kton/year. The CO2 required is approximatively 34 kton/year.
The footprint for each system has been calculated (electrolysis plant: 4.800 m2; DAC plant: 5.000
m2; methanolation plant: 7.000 m2), based on previous projects, to validate the preferred area
for the installation of The Plant (Area 3 located to the southwest of Cabo Negro, view Figure 15).
In Activity N°1, stoichiometry ratios were taken to compare different synthetic fuels, the above
indicated conversion rates, H2/MeOH and CO2/MeOH are based on realistic average values,
taking conservative values and following supplier’s recommendations. The final conversion rates
will differ depending on the final methanol technology licensor.
63
Table 18. Table of ratios H2/MeOH and CO2/MeOH considered
Conversion rate
H2 0,2
CO2 1,47
MeOH 1
Source: EDF based on technical specifications
5.2 Description of electrolysis technologies
General considerations
Electrolysis is the process of using electricity to split water into hydrogen and oxygen. This
electrochemical reaction takes place in a unit called an electrolyser where electrical energy is
used for the separation of water into hydrogen and oxygen according to the following reaction:
2 H2O + energy → 2H2 + O2
An electrolysis cell consists of two electrodes (anode and cathode, electrical conductors)
connected to a direct current generator, and separated by an electrolyte (which allows the
transfer of ions in the reaction). Hydrogen and oxygen are produced at the electrodes. The
electrolyte may be either an acidic or basic aqueous solution, a proton exchange polymer
membrane, or a ceramic membrane conductive of O2 ions.
Figure 17. Basic Diagram of an electrolysis cell
Source: H2life
Electrolysers are a relatively mature technology23 that has been long used in industrial
processes, such as the production of chlorine in the chlor-alkali process (in which hydrogen is
produced as a by-product). However, its use for dedicated hydrogen production has not yet been
widely adopted. Current dedicated production of hydrogen from electrolysis is 30 kton per year,
accounting for ~0.03% of all hydrogen produced.
Some technologies of electrolysers have reached enough maturity to scale up manufacturing

and deployment to significantly reduce costs, which is reflected in three consecutive years of
record capacity deployment in 2018, 2019 and 2020. Despite the impact of the Covid-19
pandemic, which has delayed a significant number of projects, close to 70 MW of electrolysis
became operational in 2020, bringing total installed capacity to almost 300 MW. Europe has 40%
23
TRL according to IRENA (Alkaline TRL 8-9), (PEM TRL 8-9), (Solid Oxide TRL 5-6), (Anion exchange
membrane TRL 2-3).
64
of global installed capacity and will remain the dominant region thanks to the stimulus of policy
support from numerous hydrogen strategies adopted in 2020.
Currently, there are three main electrolyser technologies on the market: ALK (alkaline), PEM
(Proton Exchange Membrane) and SOEC (Solid Oxide Electrolyser Cell).
Alkaline (ALK) electrolysis
Alkaline technology is the most mature and it is industrially developed for the mass production
of hydrogen. This type of electrolyser usually uses a concentrated potassium hydroxide (30%
KOH) solution. The OH- ion is used for the transfer of charges between electrodes where the
following reactions occurs:
Anode: 4OH− → 2H2O + O2 + 4e−
Cathode: 4H2O+ 4e− → 2H2 + 4OH−
To allow the separation of hydrogen and oxygen gases, the two electrodes are separated by a
diaphragm (or membrane). The diaphragm must allow the passage of water and ions, but not
gases. Since potassium hydroxide is a strong base and corrodes many materials, the electrodes
are generally made of nickel, iron or cobalt.
Proton Exchange Membrane (PEM) electrolysis
The development of PEM (Proton Exchange Membrane) electrolysers is more recent than the
alkaline electrolysis and is expanding among producers. In a PEM electrolyser cell, the two
electrodes (anode and cathode) are separated by a membrane of protonic conductive polymer
film. Two microporous metal electrodes are deposited on the surface of both sides of the
membrane. All components are immersed in demineralized water. When a minimum electrical
potential difference (1,48 V at standard conditions24) is applied between these two electrodes,
electrolysis occurs.
The water is oxidized at the anode according to the reaction:
H2O → 2H+ + 1/2O2 + 2e−
The protons migrate through the membrane under the effect of the electric field and are
reduced to the cathode according to the reaction:
2H+ + 2e− → H2
The membrane consists of a polymer. The electrodes are coated with catalysts made of rare
metals such as platinum or iridium.
High temperature (SOEC) electrolysis
Solid Oxide Electrolyser Cell (SOEC) technology, which is less developed than ALK and PEM
electrolysis, aims to reach high efficiencies for converting electricity into hydrogen. The principle
24
https://www.sciencedirect.com/science/article/pii/S2589299119300035 (section 6.2)
65
consists in performing electrolysis at HT-high temperatures (700 to 800°C), which reduces
electricity consumption. A heat supply is necessary, steam is introduced to the cathode where
hydrogen and superoxide anions O2 are produced- O2-anions migrate through the electrolyte
membrane to the anode and discharge to produce oxygen. A SOEC electrolyser is reversible and
can therefore operate in "fuel cell" mode. Thus, the same system makes it possible both to
convert electricity into hydrogen but also, at other times, to produce electricity from hydrogen.
The electrodes are composed of solid ceramic oxides. The fragility of ceramics remains a major
challenge to improve the lifespan of these cells. Other challenges include the current density
improvement and the optimization of materials for better performances.
Due to the development of electrolysis technologies and their costs in the mid-term, for the
synthetic fuel project in Magallanes (The Plant), only two technologies of electrolysers were
considered: alkaline and PEM. At this stage of the project, it is not recommended to select a
specific technology for The Plant as both technologies could fit the future technical and
economical requirements. PEM electrolysers have a faster dynamic response (well suited for
variable renewable energy and voltage regulation), but are more expensive than alkaline; hence,
the selection of the electrolyser technology at the tendering stage should consider a balance of
technical and economical aspects.
A comparative analysis was made using public technical specifications of electrolysers and EDF
Ingeum technical expertise. Results are synthetized in the table below:
Table 19. Alkaline and PEM comparison
Parameters Alkaline PEM

Electrolyte (material) KOH or NaOH Solyd polymer
Electrodes (material) Nickel / iron Platinum / iridium
H2 purity (%) 99,50% 99,95%
Plant flexibility (%) 20% to 100% 0% to 100%
Cold start (minutes) 10 to 20 mins < 10 mins
Usual flow/module (Nm3/h) 0,25 to 750 0,01 to 240
Electrical power/module (kW) Up to 3.800 Up to 1.200
Pressure (bar) 1 to 30 bar 1 to 80 bar
Temperature (°C) 60°-90° C 55°-80° C
Efficiency transformation (%) 75% 78%
Future efficiency transformation (%) 79% 84%
Usual lifetime guarantee (hours) 70.000 to 80.000 hrs. 40.000 hrs.
2
Footprint (stacks only) 45 m /MW 40 m2 /MW
TRL (source IRENA) 8 to 9 8 to 9
• Mature technology
• Most competitive in • Better flexibility
Strengths
Capex & Opex • Bigger operational range
• Better lifetime
• More recent technology
• Less dynamic response
Weaknesses • Higher costs
• KOH use (corrosive)
• Use of noble metals
Source: EDF based in technical specifications of electrolysers and own expertise
66
Technologies are evolving rapidly, and some values of the indicated parameters can change in
the near future. The final parameter values must be confirmed and contrasted with the selected
technology suppliers in the date when the tendering stage will be done. The table gives
referential values for the present technologies in 2021.
Considering maintenance, vendors recommend that the operators perform the following tests
and procedures, which are common to both technologies:
• Tests of the equipment on a weekly and monthly basis. As a guide, the inspection generally
consists of: visual inspection of mechanical, electrical, I&C, safety and piping equipment to
identify any evidence of leakage of process medium or utilities, corrosion that would
indicate leakage, unexpected noise emission, overheating of electrical equipment and
motors, defects and malfunctions, mechanical damage, unexpected vibrations, unexpected
process data (temperature, pressure, pressure drop, analyzer data, etc.)
• Tests of the electrolysers on a weekly basis, such as: visual inspection of the electrolyser
stacks and skid to identify any evidence of water leakage from the inlet H2O and outlet O2
manifolds above the stacks, corrosion or staining on the exterior of the stacks that would
indicate leakage, hydraulic oil leakage from the compression system under the stacks,
overheating of electrical connection boxes or busbars, integrity of peripheral components.
• The major maintenance operation in terms of cost and time is the preventive stack
replacement that should be done at every 70.000 to 80.000 hours for alkaline electrolysers
and every 40.000 hours for PEM electrolysers (these are indicative values; each vendor will
guaranty a specific value). This operation is performed by the vendor in accordance with a
service contract that generally includes an annual maintenance inspection.
Electrolyser manufacturers
Key players in the hydrogen electrolyser market are shown in the figure and table below,
specifying the origin of the vendor and the technology developed.
Figure 18. Main electrolyser manufacturers worldwide
Source: EDF based on electrolyser vendors
67
Table 20. Main electrolyser manufacturers
Company25 Technology Country Established Products related with hydrogen

Siemens PEM Germany 1847 Electrolysers
NEL ALK/PEM Norway 1927 Electrolysers, HRS, storage
Asahi Kasei ALK/CAEL Japan 1931 Electrolysers
Hydrogenics ALK/PEM Canada 1995 Electrolysers, HRS, FC
H-TEC Systems PEM Germany 1997 Electrolysers, stacks
Plug Power PEM USA 1997 Electrolysers, FC
ITM Power PEM UK 2001 Electrolysers, HRS
Green Hydrogen ALK/PEM Denmark 2007 Electrolysers
Systems
McPhy ALK/PEM France 2008 Electrolysers, HRS, storage
Sunfire SOEC Germany 2010 Electrolysers, FC
Hydrogen Pro ALK Norway 2013 Electrolysers
TKUCE (Thyssen) ALK/CAEL Germany 2015 Electrolysers
Note: ALK (Alkaline), PEM (Proton Exchange Membrane), SOEC (Solid Oxide), CAEL (Chlorine-Alkaline), HRS
(Hydrogen Refueling Stations), FC (Fuel Cells). Source: EDF based on electrolyser vendor´s technical specifications and
web pages
Other players26 than are becoming active in the electrolyser market are the following: Igas
Energy GmbH (PEM, UK); Next Hydrogen (ALK, Canada), Beijing CEI Technology (PEM, China),
Tianjin Mainland Hydrogen Equipment (ALK, China).
Global installed electrolyser and manufacturers capacity
According to BNEF, electrolyser manufacturers shipped over 200 MW in 2020 and double that
number in 2021. For 2022, estimation suggest that we could see shipments of nearly 2 GW, with
China playing a big role in the demand.27
From the offer side, it is expected that in 2024 production capacity of electrolyser will rise to 16
GW, due to the several factories with gigawatt production (gigafactories) announced in
manufacturers investment plans.28
IEA29 reports that current global installed electrolyser capacity is about 0,3 GW and the projected
capacity will reach 17 GW in 2026 (of which 8 GW will require additional renewable capacity and
25
https://nelhydrogen.com/;https://www.asahi-kasei.co.jp/salt-electrolysis/en/index.html;
https://www.h-tec.com/; https://www.plugpower.com/; https://itm-power.com/;
https://greenhydrogensystems.com/ ; https://mcphy.com/en/ ; https://www.sunfire.de/en/hydrogen;
https://hydrogen-pro.com/; https://www.thyssenkrupp-uhde-chlorine-engineers.com/en ;
https://www.siemens-energy.com/global/en/offerings/renewable-energy/hydrogen-solutions.html
26
https://igas-energy.de/ ; https://nexthydrogen.com/ ; https://beijingcei.en.ec21.com/;
http://www.cnthe.com/en/index.html
27
BNEF (Bloomberg), 2H 2021 Hydrogen Market Outlook
28
IRENA 2022, Geopolitics of the Energy Transformation – The Hydrogen Factor
https://www.irena.org/publications/2022/Jan/Geopolitics-of-the-Energy-Transformation-Hydrogen
29
IEA, Global installed electrolyser capacity in 2020 and projects planned for commissioning, 2021-2026,
IEA, Paris https://www.iea.org/data-and-statistics/charts/global-installed-electrolyser-capacity-in-2020-
and-projects-planned-for-commissioning-2021-2026
68
8,7 GW will use existing renewable plants). This number is based on project announcements and
announced commissioning deadlines.
Also, according to IRENA, in October 2021 the pipeline of announced electrolyser projects
reached over 260 GW globally (it is important to precise that some of these projects are only in
the conceptual stage).
Some of electrolyser vendors that have made public announcements regarding their electrolyser
production capacity are:
• NEL: 50 MW of PEM electrolyser in the United States and 500 MW of alkaline electrolyser
in Norway per year, which can be expanded up to 2 GW.30
• Plug Power: the company opened an electrolyser and fuel cell gigafactory in New York, with
the capacity to produce 500 MW of electrolysers per year and is working into having 3 GW
installed by 2025.31
• ITM: In 2024 will increase the manufacturing capacity from current 1 GW up to 5 GW per
year in the United Kingdom.32
• McPhy: expected to build a gigafactory in easter France to produce 1 GW of electrolyser
per year.33
• ThyssenKrupp: can deliver 1 GW of electrolysis cells per year and is looking forward to
expanding it up to 5 GW in 2025.34
Hydrogen projects worldwide
Most manufacturers are actively involved in worldwide projects. Globally, in November 2021,
the Hydrogen Council reported 522 hydrogen projects to be commissioned by 2030 which add
up to USD 160 billion of investment (IRENA, 2022). The figure does not include more than 1 000
small-scale projects and project proposals. Of these, 43 are giga-scale production projects in
Europe, Australia, the Middle East, USA and Chile.
The following figure shows the location of these projects indicated by region and by type of
project (giga scale production, large scale industrial usage, transport, integrated hydrogen
economy and infrastructure projects).
30
https://nelhydrogen.com/wp-content/uploads/2021/10/Nel_ASA_Q3_2021_Report.pdf
31
https://www.ir.plugpower.com/Press-Releases/Press-Release-Details/2021/Plug-Power-Acquires-
Frames-Group-to-Boost-Engineering-Process-and-Systems-Integration-Capabilities/default.aspx
32
https://itm-power.com/about-us
33
https://mcphy.com/en/press-releases/mcphy-gigafactory/
34
https://www.thyssenkrupp-industrial-solutions.com/en/media/press-releases/press-detail/expansion-
to-5-gigawatts-of-annual-production-capacity--thyssenkrupp-represented-in-all-three-bmbf-hydrogen-
lead-projects-121721
69
Figure 19. Announced hydrogen projects per region and type
Source: IRENA “Geopolitics of the Energy Transformation: The Hydrogen Factor”, Jan 2022.
70
5.3 Description of carbon capture technologies
General Considerations
Direct Air Capture (DAC) has been increasingly discussed as a climate change mitigation option.
Despite technical advances in the past decade, there are still misconceptions about DAC's
current and long-term costs as well as energy, water demands and area. This could undermine
DAC's anticipated role in a neutral or negative greenhouse gas emission energy system, and
influence policy makers.
DAC technologies are categorized as absorption and adsorption systems. The first absorption-
based technique has been developed mainly since 2009 by Carbon Engineering35 in Canada. The
first results obtained in 2015 at the pilot scale (capture of 0.6 tCO2/d, TRL 5-6) in Squamish at
southwestern Canada have led Carbon Engineering to publish the technical and economic
results of an industrial facility capturing 1 MtCO2/year in air with costs per ton of CO2 avoided
ranging from $94 to $232/tCO2 depending on project assumptions. Today, Carbon Engineering
is receiving tens of millions of dollars in funding from the Government of Canada, Chevron
Corporation, BHP, Occidental Petroleum (Oxy) and Bill Gates. The U.S. Company Oxy has
selected Carbon Engineering to build and operate a first demonstrator in Texas in 2023 to use
CO2 in Enhanced Oil Recovery operations. Carbon Engineering is building a larger, fully
integrated innovation center on Squamish site, which will capture 5 tons of CO2 per day
(approximately 1000 t/year). Construction is almost complete, with start-up scheduled for the
third quarter of 2021.
The second technique based on adsorption is notably developed by Climeworks36 based in

Zurich, Switzerland, whose activities started in 2009. A first industrial realization was carried out
in 2017 in Hinwil, Switzerland, with 18 CO2 capture modules (900 tCO2/year) operating thanks
to a thermal energy input from a waste incinerator and where the captured CO2 is valorized for
the cultivation of vegetables under greenhouse. Climeworks has developed a modular capture
technology with a modest capacity ranging from one unit (50 tCO2/year) to a set of 36 modules
(1,800 tCO2/year) transportable in a standard container. During 2020, Climeworks announced
that it had raised $110 million from private investors to accelerate the industrialization of its
technology.
The last main technology that can be cited is also based on adsorption and is developed by
Global Thermostat37. This company was formed in 2006 to develop and commercialize a unique
technology for the direct capture of CO2 from the atmosphere and other sources. The GT
process “co-generates” carbon capture with other industrial processes such as power
production by using the process heat from those processes to drive its carbon capture
technology. By combining CO2 capture from air along with capture from flue gas of an electrical
power plant’s low-cost process heat to provide the energy needed for the air capture process.
Global Thermostat technology can work with renewable power plants because it captures
carbon directly from air using the plant’s process heat.
A comparative analysis was made based on public technical specifications data of vendors and
EDF Ingeum technical expertise. Results are synthetized in the following table:
35
https://carbonengineering.com/
36
https://climeworks.com/
37
https://globalthermostat.com/
71
Table 21. Direct Air Capture (DAC) technologies comparison
Parameters Unit Global Thermostat Climeworks Carbon Engineering

CO2 Concentration ppm 400 400 400
Adsorbent/ Amine on monolithic Amine in cellulose
- KOH
Absorbent structure filter
Operating conditions - Ambient Ambient Ambient
Desorption
°K 358-368 353-393 1173
temperature
Full cycle hours <0,5 4--6 -
Electricity demand kWh/tCO2 150-260 200-300 134
Heat demand kWhth/tCO2 1170-1410 1500-2000 1472
Outlet pressure Mpa 0,1 0,02 0,1
Water vapor from waste
Energy vector - heat, heat pump or oxy- Residual heat Natural gas
combustion boiler
CO2 output purity % >98,5 >99,9 >97
TRL 1--9 9 9 7--8
Footprint m2 336 4.323 3.105
Start-up time hours 0,5 4--6 Possibly higher
LCOC $/tCO2 113 600-856 94-232
st Pilot capturing 0.6 tCO2/d,
1 Pilot in 2010,USA
TRL 5-6. 2015
900 tCO2/y in
Switzerland, 2017 Demonstrator of 5
Plant of 4 kt CO2/year,
tCO2/day (1
Projects 2018, in USA
ktCO2/year).2021
1MtCO2/year plant project
HIF Plant of 4 kt CO2/year plant in in the USA is being
250 kg CO2/hr in Chile Iceland, 2021 developed by
1PointFive.2023
Source: EDF based on based on provider’s technical specifications, company web pages and (Fasihi, 2019).
Technology
In general, one can consider that adsorption systems are favorable due to lower heat supply
costs and the possibility of using waste heat from other systems. After discussions between the
consultant and IDB and Ministry of Energy, and taking in consideration the comparison of the
features of three most advanced technologies shown in the previous table, the technology that
was chosen for The Plant in Magallanes is the technology from Global Thermostat. These
technologies were reviewed and considered in the study by a literature review38 and techno-
economic analysis undertaken for past projects by EDF Ingeum.
38
Some of the sources reviewed are (Fasihi, 2019), (Breyer, Fasihi & Aghahosseini, 2019), (Keith, Holmes
& Heidel, 2018), (International Conference on Negative CO2 Emissions, May 2018:
http://www.entek.chalmers.se/lyngfelt/NegCO2Conf/LinksYOUTUBEandPDF.pdf), (Video of DAC
presentation by Jen Wilcox 2018, Colorado School of Mines: https://youtu.be/0XknicLOa5Q).
72
Global Thermostat has a multifunctional technology capable of capturing CO2 from both
atmospheric and point source emissions. Its adsorbent is composed of amines bonded to a
monolithic surface; reducing the complete system cycle time to 16 minutes (regeneration occurs
in less than 100 seconds at temperatures of 358 - 388 K). To achieve such a fast process,
saturated steam at sub-atmospheric pressure is used as the direct heat transfer fluid and as the
sweep gas. Fifty percent of the regeneration heat is recovered.
The CO2 capture process is carried out in four steps: air intake, carbon capture, regeneration and
heat transfer. The detail of the process is presented in following figure:
Figure 20. Carbon dioxide capture process used by Global Thermostat.
Source: Global Thermostat
• In the first two blocks, air input and carbon capture (step 1 and 2 in the previous figure),
the CO2-laden air is directed through the cells of the adsorbent structure, whose design
seeks to maximize the contact surface and minimize the pressure drop. It should be
noted that, instead of the fan considered in the original design, natural wind currents
can be used if there are strong winds to drive the air through the substrate. The CO2 is
then retained until the adsorbent structure reaches a saturation level specified, or the
CO2 level at the outlet of the adsorbent structure reaches a value specified by design,
which denotes that the adsorbent is sufficiently saturated with CO2. When it is desired
to collect CO2 from the adsorbent structure (and regenerate the adsorbent structure),
the adsorbent structure is removed from the carbon dioxide-laden air stream and
isolated from the air stream and other air intake sources.
• In the carbon capture block (step 3 in the previous figure), steam at 368 K is passed
through the adsorbent structure, which will initially condense and transfer its latent
heat of condensation to the adsorbent structure. The adsorbent structure will reach
saturation temperature and the vapor will pass through the adsorbent structure without
condensing. As the condensate and then steam pass through and heat the adsorbent
structure, the CO2 that was captured is released from the adsorbent structure,
73
producing more condensed water by providing the heat of reaction necessary to release
the CO2 and be pushed out of the system by steam or extracted by a fan/pump. The
complete cycle takes 16 minutes.
• The last step of the cycle (step 4 in the previous figure) takes place once the CO 2 has
been removed from the adsorbent structure and the neighboring module has
completed the adsorption process, entering the regeneration stage. That module is
evacuated from the air flow and connected to the hot module from which the CO2 has
just been removed (step 4). The evaporated water from the hot module condenses on
the cold monoliths of the module to be regenerated, heating them. This step provides
50% of the heat from the cold monoliths. Subsequently, the system is lifted back into
the airstream. The air will cool the adsorbent structure and remove any remaining
moisture.
Main manufacturers
Basic air capture models consist of contacting area, solvent or sorbent and regeneration module.
Contacting area exposes the sorbent to ambient air and facilitates airflow through the model,
increasing the absorption or adsorption of CO2 molecules. Solvent or sorbent must be easy to
handle, resistant to contamination and should not vanish during the process, as its properties
determine the whole process. The main DAC technologies and vendors are described below:
Figure 21. Companies active in the field of CO2 DAC.
Note: Temperatures refer to regeneration temperatures. Each firm has country of origin & incorporation date. TSA:
Temperature swing adsorption. MSA: Moisture swing adsorption. Source: EDF based on (Fasihi, 2019)
The principal DAC companies39 and their date of incorporation are the following: Hydrocell
(Finland, 1993), Climeworks (Switzerland, 2009), Carbon Engineering (Canada, 2009), Global
Thermostat (USA, 2010), Antecy (Netherlands, bought by Climeworks in 2019), Infinitree (USA,
2014) and Skytree (Netherlands, 2014).
39
Source: EDF based on provider’s technical specifications and company web pages.
https://hydrocell.fi/; https://climeworks.com/; https://carbonengineering.com/;
https://globalthermostat.com/ ; http://www.infinitreellc.com/ ; https://skytree.eu/
74
Projects
Global Thermostat has been operating pilot plants for carbon dioxide capture since 2010. As of
2018, the company has a commercial facility in Alabama, USA, which is able to capture 4 ktons
of CO2 per year.
Figure 22. Global Thermostat's commercial CO2 capture plant in Alabama, USA.
Source: Global Thermostat
In Chile, in the Magallanes region, the "Decarbonization and Carbon Neutral Fuel Production
Pilot" also known as Haru Oni project is being developed by the company HIF, which will use
Global Thermostat technology. The project's Environmental Assessment Declaration (DIA)40
highlights the structure of porous ceramic monoliths with an amine base that "act as a carbon
sponge that will allow the adsorption of carbon dioxide from the air at a rate of 150 kg/h, with
a maximum flow rate of 250 kg/h."
40
The company HIF SpA presented in November 18th of 2020 an Environmental Assessment Declaration
(DIA) which was approved in May 14th of 2021 by Resolución Exenta N° 058/2021 “Califica
Ambientalmente el proyecto piloto de descarbonización y producción de combustibles carbono neutral”.
https://seia.sea.gob.cl/expediente/ficha/fichaPrincipal.php?modo=normal&id_expediente=2149071179
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5.4 Description of methanol technologies
According to the Methanol Institute, worldwide annual production of methanol nearly doubled
over the past decade to reach 107 million tons in 2021. Methanol demand is expected to reach
120 million tons by 2025 and 500 million tons by 2050 in IRENA´s Transforming Energy Scenario.
The following figure shows the evolution of the global methanol demand in the last six years.
Nearly all of methanol is produced from fossil fuels by a conventional industrial process that
produces the syngas (composed of H2, CO and CO2) obtained from natural gas steam reforming
or by coal gasification, which is transported to a reactor to convert it into methanol.
Figure 23. Global Methanol Demand
Source: The Methanol Institute and MMSA
The main reactions involved in the process for producing methanol from syngas are:
CO + 2H2 ↔ CH3OH (1)
CO + H2O ↔ CO2 + H2 (2)
CO2 + 3H2↔ CH3OH + H2O (3)
In addition to reactions (1), (2) and (3), other two reactions may occur (Eliasson et al., 1998):
CO2 + 4H2 ↔ CH4 + 2H2O (4)
CO + 3H2 ↔ CH4 + H2O (5)
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Reactions (4) and (5) indicate that methane formation is the main obstacle limiting the
production methanol. In other words, methanation is the main competitive reaction for
methanol formation. Typical additional byproducts include DME, higher alcohols, oxygenates,
acids and aldehydes.
Green methanol or e-methanol is obtained by using CO2 captured from renewable sources
(bioenergy with carbon capture and storage [BECCS] or direct air capture [DAC]) and green
hydrogen. Less than 0.2 million ton of renewable methanol is produced annually, mostly as bio-
methanol. The methanol produced by either route is chemically identical to methanol produced
from fossil fuel sources.
In this prefeasibility study different processes to produce methanol were evaluated and a
systematic design was made for the most important components. One approach is to produce
both components of syngas, CO and H2, through co-electrolysis of CO2 + H2O, followed by
conversion of the syngas to e-methanol as practiced for conventional methanol production.
While this route could achieve a higher conversion efficiency, it is less developed than water
electrolysis (kilowatt scale). Direct electrochemical conversion of CO2 and water to methanol is
also being studied, but so far only limited efficiency and yield have been achieved at a laboratory
scale (Goeppert et al., 2014; Olah et al., 2018).
The study focuses on the reaction of captured CO2 from DAC with H2 from water electrolysis
to produce e-methanol by catalytic synthesis as the more mature and reliable technologies:
Figure 24. Simplified PFD of e-methanol production
Source: Ellis et al 2019
The overall reaction that occurs on the methanolation reactor is the hydrogenation of CO2 into
methanol.
The conversion of CO2 to methanol is thermodynamically low: at about 80 bar and 260°C, the
maximum conversion of CO2 reached is 20 - 45% for a single pass. Technologies allow to increase
the conversion ratio by recycling loops or integrating more reactors in series, it will depend on
the specific technology licensor for the project.
77
The consultant considered a process conversion rate of 94% for the methanolation process of
The Plant based on its experience and in-house expertise.
Technology
The technology for the e-methanol synthesis step is very similar to the one to produce methanol
from fossil fuel-based syngas and is therefore mature (TRL 8-9), but the operation in a
transitional regime (associated with a fluctuating energy feed) remains a challenge. The
methanol production from direct CO2 (using pure sources of CO2 and H2) has several advantages
over the conventional process—it results in significantly less byproducts originated of side
reactions (CH4 and others) and requires less energy in product purification. However, the
process of methanol production via CO2 hydrogenation consumes more utilities (mainly
electricity per ton of methanol production due to compression) than the conventional methanol
production.
The Flowsheet is composed of a compression section, a loop of reaction, and a purification

section.
Figure 25. Indicative flowsheet of the e-methanol production
Source: Ellis et al 2019
Compression section: In the first section, the two gases are compressed to reactor pressure
(approximately 80 bar), and then heated to (260°C approx.) before entering the reactor. This is
a major difference in comparison with the classic process that uses syngas and one compressor
only. There are two train of compression of feed streams, one for carbon dioxide and another
for hydrogen. This is necessary because the compression of the mixture feed streams (with CO2
and H2) forms condensates. These are not desired because the reaction occurs in the gas phase
Depending on the purity of the reactants and the type of catalyzer it could be necessary a
purifications system before entering the reactor.
Loop of reaction: the heated compressed and heated Make Up Gases (MUG) are then sent to
the reactor. the reactor partially converts the CO2 to methanol via an exothermic reaction, the
cooling system depends on the type of reactor used. The unreacted CO2 and H2 then are
recirculated and mixed to the MUG to produce more methanol product. As anticipated a second
78
reactor can be used in series, this choice depends on economic estimations. Part of the
unreacted gas is removed to avoid inerts accumulation in the reactor
The pressure of gas phase leaving the reactor are reduced to recover methanol as liquid phase.
All liquid methanol products are sent to the first distillation column.
Purification section: In order to reach IMPCA (International Methanol Producers & Consumers
Association) quality product (99,85% quality selected for this project), the crude methanol is
separated from the water and subproducts of the methanolisation through a distillation system
and directed to methanol storage tank. One or two distillation columns will separate methanol,
from water, light gases and other components. The light components (CO, CO2, and H2) leaved
at the top of the column, the mixture of methanol and water leaved the column at the bottom
and entered the second distillation column, where the methanol product with purity required is
obtained at the top of the column.
Projects
The projects described in this section are a selection of the eleven projects that were detailed in
Activity N°1 (Chapter 2.8 - Selected European Power-to-liquid European projects and Chapter
2.9 - Selected Power-to-liquid projects in rest of the world).
Table 22. PtL projects for Methanol

CRI (Carbon Iceland 2012/2022 Direct Methanol synthesis; CO2 from geothermal
International source; 6 MW ALK; 4 kt/y
Recycling)
Carbon2Chem Germany 2018 Demo site for various products (Methanol, NH3);
steel-off gas; 2 MW ALK; >100 Mio€ (thereof 62
Mio funding); 1 b€ for commercialization
MefCO2 Germany 2019 Direct Methanol synthesis; CO2 from coal power
plant; 0,6 MW PEM; 350t/y; 11 Mio€
North-C- Belgium/ 2024/2028/ Direct Methanol synthesis; CO2 from industry;
Methanol Netherlands 2030 AEL & PEM; 2024: 65 MW; 44 kt/y; 140 Mio€;
2028: 300 MW (Methanol & Ammonia); 2030:
600 MW
Liquid Wind Sweden 2024 CO2 from Biomass; PEM; 50 kt/y; eMethanol
process from Haldor Topsoe
Djewels Netherlands 2025 CO2 from industry; 30 kt/y; 20 MW ALK
electrolysis
HyNoVi France 2025 CO2 from cement industry; AEL; 207 kt/y; 330
MW electrolysis
Copenhague Denmark 2027 n.a., 80 kt/y
Methanol
Bell Bay Australia 2024 RE from hydro and wind; DAC; developed by Abel
(Tasmania) Energy and Thyssen; 100 MW electrolyser;
methanol for export & DME plant for local
41
www.carbonrecycling.is;www.thyssenkrupp.com/en/newsroom/content-page-162.html;
http://www.mefco2.eu/ ; www.northccuhub.eu ; www.liquidwind.se ; www.djewels.eu ; www.vicat.com;
www.abelenergy.com.au; http://www.renewableh2canada.ca/
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industry; 2024: 74 kt/y; 2030: 1 million tons/y;
financial support from Tasmanian Government
RH2C Canada (British nd 120 kton/y; developed by Renewable Hydrogen

Columbia) Canada
Liquid Sunshine China (Lanzhou) 2020 1 kton/y, developed by Dalian Institute of
Chemical Physics, outlook to 10 kton/y
Source: EDF based on The Methanol Institute, Irena and developers
The first contemporary commercial CO2-to-methanol recycling plant, that uses available local
energy from, a cheap geothermal plant, has been operated in Iceland by Carbon Recycling
International (CRI) since 2012. This commercial demonstration plant (George Olah Renewable
Methanol plant), with a design from Johnson Matthey/Jacobs and an annual capacity of 4 kton
of methanol (~12 t/d), is based on the conversion of geothermal CO2 and the readily available
local geothermal energy (hot water and steam) sources. The necessary H2 is produced by 6 MW
alkaline electrolysers. Iceland embarked on this development as a means to exploit and possibly
export its cheap and clean electrical energy. The produced methanol (called Vulcanol), is a clean
burning, high octane fuel, that can be used directly as a vehicle fuel42 or blended with gasoline.
It can also be used as feedstock for biodiesel production or for waste-water denitrification. CRI
supplies Vulcanol to companies in Iceland, Sweden, the Netherlands, UK and China.
Figure 26. The “George Olah Renewable CO2-to-Methanol Plant” of CRI in Iceland
Source: CRI
In China, the Dalian Institute of Chemical Physics recently started operations in November of
2020, at a 1 kton/year e-methanol demonstration plant (the Liquid Sunshine project43 in
Lanzhou, Gansu Province, Northwestern China). In this plant, the alkaline electrolysers for the
production of the necessary hydrogen (1000 normal cubic meters per hour of H2) use the
electricity produced by a 10 MW solar PV plant. The methanol is supplied to the chemical
42
Chinese company Geely and CRI conducted an 18 month pilot project with Geely´s 100% methanol
powered taxis that were driven over 150.000 kilometers.
43
http://english.dicp.cas.cn/ns_17179/ue/202011/t20201104_248632.html
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industry or can be converted back into hydrogen for energy use. The project is the first to
demonstrate the production of methanol from solar power on an industrial scale and plans to
expand its production gradually to 10 and afterwards to 100 ktons/year.
Figure 27. e-methanol Liquid Sunshine plant in Lanzhou, China
Source: Irena
Other e-methanol commercial plants are being planned around the world with production
capacities ranging from 8 kton/year to 180 kton/year of e-methanol. If all the commercial
projects come to fruition, in excess of 700 kton/y of e-methanol capacity would be available.
Plants from Liquid Wind in Sweden, ABEL in Australia, Swiss Liquid Future/ThyssenKrupp in
Norway, and RH2C in Canada will all use renewable H2 and CO2 from either industrial or biogenic
sources.
Other consortia are planning the construction of e-methanol plants in the ports of Antwerp and
Ghent in Belgium, as well as in the Netherlands. In Denmark, a sustainable fuel project aims to
achieve electrolyser capacity of 10 MW in 2023, 250 MW in 2027, and 1.3 GW in 2030
respectively. The green hydrogen generated will be combined with CO2 captured from the
combustion of Municipal Solid Waste (MSW) or biomass to produce renewable methanol for
maritime vessels and renewable jet fuel for planes (e-kerosene) (Maersk, 2020).
Technology providers
Besides the companies cited in the referenced projects, an increasing number of technology
providers are also developing and licensing e-methanol solutions, including entire plants, e-
methanol synthesis units, catalysts and larger electrolysers able to provide sufficient hydrogen.
They include among others CRI, Thyssenkrupp/Swiss Liquid Future, bse engineering/BASF
(FlexMethanol), Haldor Topsoe (eMethanol), and Johnson Matthey.
Numerous institutions, companies, universities and collaborative efforts are also developing
CO2- to-methanol technologies and testing them in demonstration and pilot plants. For
instance, as part of the Carbon2Chem project, a cross-industrial network funded by Germany,
production of methanol from steel mill gases complemented by hydrogen from water
electrolysis will be studied at a Thyssenkrupp steel mill (Carbon2Chem, 2020).
In Japan, Mitsui Chemicals operated for 4 500 hours a pilot plant with a 100 t/y methanol
capacity, using CO2 and H2 with a catalyst developed by RITE (Mitsui Chemicals, 2009, 2010).
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Zero Emission Fuels, a company in the Netherlands, is aiming to develop fully automated
modular micro-plants to produce methanol from CO2 captured from the air and renewable H2
produced from solar power (ZEF, 2020).
The traditional catalysts such as CuO/ZnO/Al2O3, can be modified to accommodate the
generation of larger amounts of water during synthesis of e-methanol. Such catalysts are already
available commercially from a number of vendors including Haldor Topsoe, Johnson Matthey
and Clariant.
The main key players44 in the e-methanol plants industry are listed below:
• Plant integrators: Bse engineering, Mitsubishi Hitachi Power systems, Carbon recycling
international.
• Operators: Carbon Recycling International, BioMCN, Bse engineering, Total.
• Catalyst manufacturers: Haldor Topsoe, Johnson Matthey, Clariant, Air Liquide, Bse
engineering, BASF, Swiss Liquid Future AG, Carbon recycling international, Mitsubishi
Hitachi Power systems.
5.5 Conclusions
The key findings of this chapter can be summarized as follows:
• The electrolysis technologies considered for the methanol plant are alkaline and PEM, both
TRL 8-9 according to IRENA and compliant with the technical economic requirements. A list
of 15 vendors from Europe, North America and Asia was included.
• The DAC technologies are categorized as absorption and adsorption systems. A list of seven
vendors from Europe and North America was provided, most of them are companies
incorporated since 2009.
• The synthetic methanol technologies were presented, characterized by three principal
processes (compression section, loop of reaction and purification section). Examples of
eleven e-methanol plants were presented, including commercial operative plants and
announced plants.
• A list of companies involved in the e-methanol plant´s supply chain was presented (three
plant integrators, four plant operators, nine catalyst manufacturers).
44
https://www.carbonrecycling.is/ ; https://power.mhi.com/ ; https://www.oci.nl/operations/biomcn/ ;
https://totalenergies.com/ ; https://www.topsoe.com/; https://matthey.com/en ;
https://www.clariant.com/en/Corporate; https://www.airliquide.com/; https://www.swiss-liquid-
future.ch/?lang=en ; https://inopco.de/ ; https://catalysts.basf.com/
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6. Activity N° 5: Infrastructure & supplies
Activity N° 5 focuses on the description of the utilities of The Plant, including:
• Electricity produced by the wind farm.

• Pretreated and demineralized water.
• Heat (steam) production through an auxiliary gas boiler.
• Natural gas.
• General considerations on the methanol end product.
6.1 Description of utilities
Electricity
The Magallanes region has approximately 13 MW of existing wind farms:
• Cabo Negro wind plant: 2,55 MW (3 Vestas V52 turbines of 850 kW), with rotor diameter
of 52 meters, a height of nacelle of 49 meters, constructed initially by Methanex and
commissioned in 2010. It is actually owned and operated by Pecket Energy. Pecket has
indicated a historical capacity factor of 52%.
• Vientos Patagónicos also called Nuevo Cabo Negro wind plant: 10,35 MW (3 Vestas V112
turbines of 3,45 MW), with rotor diameter of 112 meters, a height of nacelle of 69 meters,
owned by ENAP and operated by Pecket Energy. It was commissioned in October 16th of
2020. ENAP considered a theoretical capacity factor of 56%, and recently informed that it
reached around 43%45 after one year of operations (this is a reduced factor due to
restrictions to inject the generation in the medium voltage grid of Edelmag).
Besides, the Haru Oni green fuels project considers a pilot project with one 3,45 MW Vestas
turbine, which will start operations in April 2022 (according to HIF’s documentation of the
approved DIA-Declaration of Environmental Assessment).
For a first approach, the installed capacity of the wind farm (66,6 MW) for The Plant was
determined with a capacity factor below 50%. It will supply electricity to the electrolysis plant
(30 MW) and the other facilities that demand electricity (desalination plant and methanol plant).
45
https://elpinguino.com/noticia/2021/10/16/parque-eolico-alcanza-factor-de-planta-del-43-por-ciento
83
Figure 28. Capacity factors on the Magallanes Region
Source: Ministerio de Energía 202146
At a later stage, specific data for wind speeds in Cabo Negro (Area 3) were considered. The
information was obtained from Ministry of Energy (website “Explorador Eólico”:
www.minergia.cl), specifically the data of the year 2015 at different elevations. An extraction of
100 m elevation data (which is the height of turbines) was made. The previous figure illustrates
For The Plant, several hypothesis of utilization of new generation wind turbines were made. For
instance, an 8,3 MW wind turbine was used (this size is not yet available in the market, but it is
expected that it will be operational in 2025).
Calculations of the gross power capacity were made taking into consideration possible
production curves of the 8,3 MW turbines supplied by EDF Renewables and considered 10% of
wind farm internal losses and 2% of electrical losses between the wind farm and the process
plant to stablish the net power capacity. The gross capacity factor obtained was 62% and the
net capacity factor was 55%. (+10% higher than initial calculations based on existing wind farms
in Cabo Negro).
Calculations of LCOE were made with sensibility analysis on the discount rate, as follows:
Table 23. Results from sensitivity analysis of LCOE for different Discount Rates
Discount rate 5% 6% 7%
LCOE (US$/MWh) 23.2 25.3 27.4
Source: EDF Ingeum
46
Source: “Identificación de Potenciales Renovables: Caso Eólico”
https://exploradores.minenergia.cl/portal-ernc/websites/Magallanes_White_Paper_Edicion_Feb20.pdf
84
Taking into consideration a more conservative discount rate of 12%, LCOE results in 39.2
US$/MWh.
Water
The water sources that could be available in the area of Cabo Negro for the requirements of The
Plant are superficial bodies (rivers), underground bodies (aquifers) and ocean water from the
Magallanes Strait. The use of superficial47 and underground waters48 require the issuance of a
water use right granted by the authorities in the General Direction for Water (DGA – Dirección
General de Aguas), an institution that is part of the Ministry of Public Works. The use of ocean
water and the construction of a desalination plant requires a maritime concession49 granted by
the Ministry of National Defense, Undersecretary for the Armed Forces. Due to the size of the
methanol plant and the scarcity of superficial bodies, the design of the methanol plant considers
a desalination plant.
Pretreated & Demineralized water
Pretreated and demineralized water is needed for the electrolysis process, as required by all
electrolyser vendors (indeed, impurities present in the water can cause precipitates on the
electrolysers that will damage the equipment) and for the boiler that will produce the steam
produced for different parts of The Plant. All the water for the electrolysis process is consumed
(5,4 t/h) as it is transformed to H2 while the boiler water is partially recovered after being used
as steam. Only make up water is then considered for the consumption estimations.
For the water treatment plant, the consultant considered a classic chemical pretreatment to
desalinate (screening and grit removal, then chlorination, coagulation-flocculation, flotation,
and sand filter or ultrafiltration) followed by a demineralization process using reverse osmosis
and electrodeionization as the principle for the treatment.
Cooling system
The cooling system is a once-through sea water cooling (2.000 t/h of sea water circulation pump,
not treated) and a cooling water loop (1.800 kg/h) plus a heat exchanger. Overall duty, taking
into account cooling necessities of the electrolysers, compressors, DAC and the methanolation
unit, is estimated at 25 MWth.
47
https://dga.mop.gob.cl/Paginas/ap_aguas_superficiales.aspx
48
https://dga.mop.gob.cl/Paginas/ap_aguas_subterraneas.aspx
49
https://www.ssffaa.cl/asuntos-maritimos/concesiones-maritimas-2/
85
Figure 29. Block Flow Diagram of demineralized water flux
Source: Annex 15.11
Sea water required for water treatment of The Plant (pretreated for the cooling water loop and
demineralized for the electrolysis process and the makeup water for the boiler) is estimated at
10 t/h, considering that wasted water condensates from the methanol process are sent back to
the water treatment, thus reducing the consumption of new sea water.
Steam
As previously described in Activity N° 4, the Direct Air Capture (DAC) technology of adsorption
works venting air from the atmosphere that flows through a fixed bed of solid adsorbent. The
CO2 is retained from the air when it strikes the adsorbent, until the adsorbent structure reaches
a saturation level. When it is desired to collect CO2 from the adsorbent structure (and
regenerates the adsorbent structure), heat from steam is required. A steam flow is generated
and sent to the DAC system. Low pressure steam is considered for the distillation section and
also to cooldown the methanol loop.
Figure 30. Block Flow Diagram of steam flux
Source: Annex 15.12
Natural gas
For the operation of the boiler, 1,3 ton/hour of natural gas are burned in the furnace, producing
the hot gases formed by the combustion transfer the heat to the demineralized water that
transforms into steam. The consultant considered a gas boiler as the best option because natural
gas is available near the site area (via the ENAP gasduct of 18” from Posesion to Cabo Negro,
86
located at a distance of 1 to 1,5 kms, as shown in the figure). The boiler also needs a constant
operation for the steam production, which is obtained if the fuel is natural gas (on the other
hand, an electric boiler supplied by the wind farm would face the intermittency of the wind
profile and would require a battery). The real characteristics of the gas were not considered for
this stage of the project.
Figure 31. Gasduct network in Cabo Negro
Source: Geoportal CNE
One of the possible optimization solutions is to valorize the oxygen and to use it for the
combustion in the boiler (oxygen is a sub-product of electrolysis process and is normally vented
and lost to the atmosphere). This pure oxygen (4,3 t/h) can enrich the air mixture to reduce fuel
consumption and can be injected into the furnace of the boiler in order to produce an
oxycombustion (that means that O2 will be valorized in the boiler to make the oxyfuel
combustion happen) which produces 75% less flue gases and exhaust consisting primarily on
CO2. Oxycombustion boiler is an innovative technology, not typically used because of the price
of the O2. In The Plant, this is a suggested optimization that allows to capture CO2 from the
boiler for the methanolation unit, and thus reduce the installed capacity required for the DAC.
87
Figure 32. Block Flow Diagram of gas flux
Source: Annex 15.13
Another possible optimization is to recover small quantities of methanol distillation emissions

to feed the furnace of the boiler.
Storage and transport
Storage and transport of methanol are not the focus of this pre-feasibility study, but referential
information is provided for indicative purposes.
Methanol (CH3OH) is a colorless water-soluble liquid. It freezes at -97.6°C, boils at 64.6°C and
has a density of 0.791 kilograms (kg) per cubic meter at 20°C. The production of methanol at the
design rate is 2,7 ton/hr. At a later stage of the project, the developer can estimate a storage
volume considering a time linked to a certain frequency of delivery (one month for instance). A
pipeline connecting the e-methanol facility to the existing storage infrastructure of Methanex
can also be an option to be studied on later stages of the project.
It is important to precise that methanol, whether from fossil fuels or renewable sources, has the
same chemical structure: CH3OH. As such, renewable methanol could directly replace fossil
methanol in any of its current uses. The current expansion of fossil methanol as a fuel in some
applications could also ease the gradual transition to renewable methanol as the distribution
and transport infrastructure would remain the same. This is a good advantage for current players
such as Methanex.
Existing uses of methanol
According to IRENA and the Methanol Institute, the global methanol demand is directed to
synthesis chemicals such as formaldehyde (23%), acetic acid (7%), methyl methacrylate (2%),
and ethylene and propylene through the methanol-to-olefin MTO route (32%). These chemicals
are then processed to manufacture products such as paints and plastics, building materials and
car parts. Another important use of methanol is as an alternative fuel (17%), for gasoline
blending, biodiesel and dimethyl ether (DME).
88
Figure 33. Methanol uses
Source: Methanol Institute and MMSA
89
6.2 Timeline of required tasks for the implementation of the project
In the following section, a timeline for the project’s construction is provided with a brief analysis
of the different challenges involved in each development stage. The analysis will include health,
safety, environment, community, and permit challenges, which will be studied according to the
national laws for environmental and energy projects, and international suggestions and
certifications.
The section continues with contractual challenges involving the procurement of equipment and
takeoff contracts, which will be a milestone for the construction and commissioning of the
project. Here, procurement barriers will be highlighted, involving the possible challenges during
the acquisition of main components for e-methanol production, particularly for the electrolyser
and the DAC systems.
Finally, the main challenges are more related to ownership rather than the resources, as permits
related to water use, land rental, and maritime concessions, are overviewed and analyzed. These
challenges are examined considering the site where the project would be located and the use of
coastal zones due to the requirement of a desalinization plant to supply water to the
electrolysers.
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Table 24: Timeline of required tasks
2023 2024 2025 2026 2027 2028 2029 2030

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Ítem Stages Description T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3
1.1. Technical Bases & awarding process Wind, water, land & access studies
Prefeasibility
1.
Anticipated community outreach

1.2. Public entities, communities & stakeholders
and stakeholder engagement
2.1. Environmental Base Line Study to stablish an environmental baseline

Elaboration of Environmental
2. Feasibility
2.2.
Impact Study (EIA)
Evaluation of Environmental Impact
2.3.
Assessment System (SEIA)
Issuance of Environmental License
2.4.
Resolution (RCA)
3.1. Sectorial License Water license (DGA), maritime concesions (MD)
Preinvestment
Report of construction feasability (IFC), CONAF, health,

3.
3.2. Other licenses

SAG-MINVU, Municipality, others
4.1. Notice to proceed Manufacturing, procurement, works and commissioning

4.2. Wind farm Manufacturing, procurement, works and commissioning
4.3. Desalination plant Manufacturing, procurement, works and commissioning
4. Construction
Manufacturing, procurement, works and commissioning,

4.4. Electrolysis plant
25-30 months
4.5. DAC
32-36 months
4.6. Methanol plant
24-30 months
4.7. Other infrastructure Roads, ports, electricity lines, pipelines
Operation
5.1. Start of methanol production

5.
EIA: Environmental Impact Assessment Study Process dependant on other actors

SEIA: Environmental Impact Assessment Service Milestone
RCA: Resolución de Calificación Ambiental Process
DGA: General Waters Direction
SAG: Agriculture and Livestock Service
Minvu: Ministry of Housing and Urbanism
PAC: Permisos Ambientales Sectoriales
58
The previous table shows a timeline for the implementation of the project, ranging from the
prefeasibility stage until the construction and commissioning of the project. Moreover, a
technical, environmental, social, regulatory, and contractual challenge analysis is provided.
The first phase corresponds to prefeasibility, where early technical and economic studies are
developed. Also, in this stage, the analysis of the area’s stakeholders is carried out together with
an early relationship with the communities and public entities. The relationship with the
communities is an essential point to consider since 21.53% of Punta Arenas population, the
capital of the Magallanes region, declared to be part of an ethnic group related to indigenous
people (Punta Arenas municipality, 2021). Thus, it is crucial to perform an anticipated
community outreach with indigenous people in the region and determine the direct impact on
communities according to ILO 169 Convention (ILO, 1989).
Then, in the feasibility phase, an environmental baseline50 must be established, which will be
the input for the obtention of the project’s Environmental License Resolution (RCA for its
acronym in Spanish). It should consider (Environmental Assessment Service, n.d):
• Physical environment: climate, geology, water resources, among others

• Ecosystems: terrestrial, marine, and inland aquatic
• Historical heritage: both natural and artificial
• Landscape, protected areas, natural or cultural attractions, land use, human
environment: socioeconomic, demographic, geographic analysis, among others
• Projects or activities that have an RCA.
The procedure is governed by Law 19,300, and a delay in this procedure could be critical for
accomplishing the project's commissioning plan. Furthermore, it will be necessary to check the
norm NCh382.Of98:2003 (National Standards Institute, 2003) regarding the storage of
dangerous substances, transport of hazardous cargoes, and prevention of professional risks. Due
to the complexity of the project, and the sampling timeframes to establish a baseline for each
part of the value chain, a consideration to take into account is that the time to obtain the permits
and carry out the environmental evaluation would take more than 2 years. As an example,
obtaining a marine permit requires a baseline sampling of at least two years before its
presentation to the SEIA (Marine Contamination Group of the National Oceanographic
Committee, 2021). As a reference, Annexes 15.14 and 15.15 present the information of the
months required to obtain environmental permits (EIA and DIA) for selected wind farms and
desalination plants in Chile.
The pre-investment phase involves processing and obtaining sectorial licenses like water right
use (DGA), construction (report of construction feasibility), forestry (CONAF), health, SAG-
MINVU, and Municipal permits51. Good execution of the feasibility phase is key for obtaining
these permits, avoiding delays in the project.
The construction phase begins with a notice to proceed (NTP) with the construction. The
manufacturing, procurement, works, and commissioning of the wind farm, electrolysis plant,
50
The baseline consists of the detailed description of the area of influence of a project or activity, prior to
its execution.
51
More details about the licenses needed in this phase can be found from Annexes 15.17 and 15.21
58
DAC installation, methanol plant, and other auxiliary infrastructure are performed in this phase.
Likewise, the electrolysers and DAC delays could affect the operation and construction timeline
of the project.
The last phase corresponds to operation, where the whole project starts the e-methanol
production. This period could be modified depending on the regulatory situation and
Government initiatives to develop this market. For example, government initiatives to facilitate
the concession of national assets could help the project's early development52. Or in contrast,
potential modifications to the regulation of wind projects could impact the evaluation of the
project under the SEIA and produce a delay.
Therefore, the complete timeline of the project could take approximately 7 years from the
prefeasibility study until the start of operations.
6.2.1. Health, Safety, Environment, Community & Permits challenges

The current law establishes that infrastructure projects carried out in Chile must be evaluated
under the Environmental Impact Assessment System (SEIA by its acronym in Spanish) to obtain
construction and operation licenses. The criteria to evaluate the pertinence of the project are
found in the Law 19,300 (Ministry General Secretariat of the Presidency, 2021). Within this law,
Article 10 establishes a series of criteria to determine whether a project should be presented
under the SEIA. Among the criteria related to a e-methanol production project are (Ministry
General Secretariat of the Presidency, 2021):
• High-voltage electrical transmission lines over 23 kV capacity (Ministry of the Environment,

2014).
• Electricity generation facilities greater than 3MW of installed capacity.
• Ports, waterways, shipyards, and maritime terminals.
• Oil, gas, mining or similar pipelines.
• Production, storage, transport, disposal, or reuse of toxic, explosive, radioactive,
flammable, corrosive, or reactive substances. For this point to be considered, the quantity
produced, disposed, or reused must be greater than 10,000 kg /day. It is also considered
whether the storage capacity of toxic substances is equal to or greater than 30,000 kg
(Ministry of the Environment, 2014).
Within the SEIA, it is necessary to verify whether an Environmental Assessment Declaration (DIA)
or an Environmental Assessment Study (EIA) should be made. The differences between both
instruments are that a DIA takes about 60 days to be evaluated, while an EIA takes about 120
days. Nevertheless, although the deadlines for both are established, these are usually extended
due to the request for modifications or rejections, among others (DIA can be extended for 30
additional days and EIA can be extended for 60 additional days). Another point is that the EIA
should always include citizen participation, while in a DIA, citizen participation should only be
done under certain circumstances (Ministry of the Environment, 2021)). Moreover, in the case
52
In November 2021, the Ministry of National Assets issued Res. Exenta N° 998, to receive applications
for a Direct Assignment of Onerous Use Contracts for public land for energy generation and green
hydrogen production.
93
of an EIA, it is mandatory to carry out mitigation, remediation, and compensation plans due to
the environmental and social impacts generated (Ministry of the Environment, 2021).
The criteria for the applicability of an EIA are found in article 11 of Law 19,300 (Ministry General
Secretariat of the Presidency, 2021). Under the criteria above, the following points could justify
the applicability of the project understudy for an EIA (Ministry General Secretariat of the
Presidency, 2021) :
• Significant adverse effects on the quantity and quality of renewable natural resources,
including soil, water, and air.
• Resettlement of human communities, or significant alteration of the living systems and
customs of human groups.
• Significant alteration, in terms of magnitude or duration, of the landscape or tourist value
of an area.
• Alteration of monuments, sites with anthropological, archaeological, historical value and,
in general, those belonging to the cultural heritage. In addition, the D.S 40 sets the criteria
regarding the impact magnitude and duration allowed on the soil, water, or air; the effect
generated by the use and/or handling of substances; the difference between the estimated
noise levels of the project and the representative background noise level; and the
characteristic of the environment where native fauna is concentrated. (Ministry of the
Environment, 2014).
The EIA would imply a more complex process than a DIA, and therefore, a more extended period
should be considered for its approval. The applicability for a DIA or EIA will depend on the
intrinsic characteristics of each project. The consultant suggests that due to the complexity and
nature of the e-methanol plant (includes hydrogen plant, DAC unit, oxy-combustion boiler,
desalination plant, methanolisation unit) the project is presented integrally as one unit and as
an EIA. Besides, potential risks involving communities, existence of indigenous communities and
wildlife impact will require a detailed analysis and approach. These conditions could change in
the next years, accelerating the obtention of permits by the authorities.
Regarding safety challenges, hydrogen is classified as a hazardous substance in Class 2.1 of

flammable gasses, according to NCh382. Of98:2003 (National Standards Institute, 2003).
Therefore, during the plant's design, construction, and operation, regulations related to the
storage of dangerous substances, transport of hazardous cargoes, and prevention of
occupational risks must be addressed (GIZ & Ministry of Energy, 2020).
Despite the risks related to hydrogen handling, hydrogen is not fully covered in Chilean
regulations, leaving out "the needs of ventilation, measures against explosions, high-pressure
equipment, cryogenic equipment and provisions for handling and transfer" in hydrogen terms
(GIZ & Ministry of Energy, 2020, pág. 33). However, the Ministry of Energy, in conjunction with
the Ministry of the Environment, is presently analyzing the existing regulations regarding
hydrogen and its potential improvements (GIZ & Ministry of Energy, 2020).
Nowadays, a safety bylaw for hydrogen installations is under citizen consultation (Ministry of
Energy, 2021). This safety bylaw will seek to establish the minimum safety requirements, the
obligations, and the responsibilities that hydrogen installations must accomplish during the
94
design, construction, operation, maintenance, inspection, and ending of operations (Ministry of
Energy, 2021).
Additionally, it is suggested to take into consideration international standards, given that there
is a current regulatory gap in Chile (GIZ & Ministry of Energy, 2020). This is because until now
the use of hazardous substances, such as hydrogen, was limited to highly technological industrial
and laboratory applications with restricted access, so the massive use of hydrogen for energy
applications will expose people to new hazards with which they are not familiar (GIZ & Ministry
of Energy, 2020).
International standards are separated according to the following stages: production,

conditioning, storage, distribution, and consumption. Within these stages, the most common
standards are ISO, NFPA, and EIGA, which address safety, handling, and technology issues
related to hydrogen (Fichtner GmbH & Co. KG, 2020). In the case of the production and
conditioning stages, there is no specific international regulation for hydrogen. However, the
existing local regulation for industrial processes would address those stages in Chile (GIZ &
Ministry of Energy, 2020), so it would not be necessary to generate a particular regulation for
them.
6.2.2. Contractual challenges
Within the contractual challenges lies the issue acquiring electrolysers, which are one of the
main components of the e-methanol plant. It takes between 16 to 18 months to deliver them,
based on information obtained through a market consultation with electrolyser providers.
Today, the demand for electrolysers has grown due to the latest announcements of new projects
that need this type of equipment. However, it is expected that demand will grow from
approximately 0.20 GW in 2020 to 85 GW by 2030, representing an annual growth rate of nearly
83% per year (IRENA, 2020).
In response, the manufacturing industry for electrolysers is expecting the market signals that
could trigger the investment of new manufacturing capacity. An example for this purpose is the
French company McPhy, which plans to build a gigafactory for electrolysers at the end of this
decade. It stated that there are difficulties at the time of production regarding companies'
orders and project executions, particularly given the global public health context and associated
restrictions (McPhy, 2021). Another example is the company Nel ASA, which has secured a
location that will allow an electrolyser production capacity of more than 1 GW per year (Patch,
2019). This means that the largest electrolyser plant in the world would go from 0.36 GW to
around 1 GW, which would favor the production of green hydrogen since the prices of this
equipment should decrease (Patch, 2019). Therefore, purchasing 30 MW of electrolysers for the
e-methanol plant is a challenge, and its delivery times are a critical factor.
Another challenge is the size of commercial electrolysers, especially for PEM technology, which
usually presents a reduced size (< 1 MW) (Orkerstra, 2021) and the needs to scale up this
technology to satisfy the demand for large scale projects. Additionally, multiple electrolyser
suppliers are not yet present in Chile, which generates a placement gap in the market since after-
95
sales services do not have a local partner settled in the country. Hence, this could cause a
competitive disadvantage (Blix Ingeniería, 2021).
As for the Direct Air Capture (DAC) technology, there are currently nineteen DAC systems
operational in Europe, the United States, and Canada. The installation of the first large-scale
DAC plant has recently been announced, and that will be located in the United States. This large-
scale DAC plant is drawing more attention from the private and public sectors due to the
voluntary offsets market (International Energy Agency, 2021). Despite this, there are significant
challenges related to the provider for the technology and the time required for the acquisition.
6.2.3. Ownership over the resource challenges
In Chile, to install an e-methanol plant, several Sectorial Environmental Permits (PAS by its
acronym in Spanish) will be required, which have the purpose of environmental protection.
These permits are established by the article 111 and the following articles of S.D. N ° 40, of 2012,
of the MMA (SEA, 2012). The most relevant permits to the project are the following:
• Permit for dumping in waters under national jurisdiction from ships, aircraft, naval devices,
constructions, and port works (article 111 RSEIA).
• Permit to locate land facilities for the reception of oily mixtures in the ports and terminals
of the country (article 112 RSEIA).
• Permit for installing a maritime terminal and conductive pipes for the transport of polluting
substances or that are susceptible to polluting (article 114 RSEIA).
• Permission to introduce, or discharge harmful or dangerous materials, energy, or
substances of any kind into the waters subject to national jurisdiction (article 115 RSEIA).
The SEA and the Maritime Authority have established maritime permits that need to be
considered regarding the use of a coastal zone. For instance, the Maritime Authority sets the
technical minimums for the environmental evaluation of industrial desalination plant projects in
the stages like baseline, construction, operation, and closure when production exceeds 1,000
m3/d (Marine Contamination Group of the National Oceanographic Committee, 2021) .
In the baseline stage, it is established that since most of the coastal localities of Chile present
oceanic and environmental differences between the autumn-winter and spring-summer
periods, sampling of abiotic and biotic parameters should be carried out at least two times per
year for two years (Marine Contamination Group of the National Oceanographic Committee,
2021). Therefore, this permit must be seen well in advance to avoid delays in the project's
commissioning.
In addition, during the construction stage, the construction activities must not interfere with the
8-meter easement belt assigned to artisanal fishers. During this stage, the rescue and relocation
of hydrobiological resources that constitute natural banks must be carried out, besides a follow-
up of this process. Moreover, if the marine environmental impacts are significant, according to
article 12 letter f of Law 19,300 (Ministry General Secretariat of the Presidency, 2021), an
Environmental Monitoring Plan (PSA) about the marine environment must be drawn up (Marine
Contamination Group of the National Oceanographic Committee, 2021).
96
A PSA that incorporates monitoring the water column, the seabed, the communities, and the
bioassays must be carried out during the operational stage. The bioassays include continuous
salinity measurements of the discharges made to the sea, complying with the D.S 90/00. Hence,
there are also challenges at this stage because there must be constant monitoring to comply
with current Chilean regulations. In this case, as in construction stage, it must be regulated by
Article 12 of Law 19,300 (Marine Contamination Group of the National Oceanographic
Committee, 2021) .
Thus, given the technical requirements established by law, obtaining permits and the necessary
studies can take more than two years. Additionally, there are challenges in mitigation plans
because a detailed analysis of the impacts in biodiversity in the construction and operation
stages must be carried out.
On the other hand, in the site area selected for the project's development, ENAP has exploratory
oil & gas wells and there is also an Otway Special Contract for Oil & Gas Operation53 (CEOP by
its acronym in Spanish) awarded to Methanex, Wintershall and Geopark. This situation could
generate conflicts of overlapping activities during the development, construction and operation
stages of the e-methanol plant. Therefore, it is suggested to have an early relationship with Enap
and the other companies, to reduce conflicts; it is also recommended that during the future
phases of the project a detailed legal study of the implications of CEOPs operations should be
performed.
Finally, Chile has been characterized by stability for investment and ownership of projects for
the last years. Currently the country is going through a process of uncertainty due to a
constitutional process, which is expected to culminate with the exit plebiscite in mid-2022
(Communications Secretary, n.d). In this context, for investments to take place it is necessary to
have legal certainties, and so, it will be important that the Chilean H2 Association could take a
role in the process and encourage certain guarantees for investors during and after the process.
6.3 Conclusion
As previously shown, the obtention of the environmental resolution is a critical activity in the
route of the timeline. A proper evaluation of the pertinence of the project will be required, based
on criteria under article 10 of Law 19,300. Then, through the analysis of article 11 of Law, it
should also be determined if the project should be carried out through a DIA or an EIA. Knowing
if the project corresponds to a DIA or EIA is crucial for estimating the commissioning date. The
consultant suggests that due to the complexity and nature of the e-methanol plant, the
preferred option is to present an EIA.
At the same time, it is essential to permanently review the regulations that are in force in Chile
related to green hydrogen, mainly due to the growth of the hydrogen market in the country. In
this case, the project execution time depends on the tendencies related to the regulatory
situation and Government initiatives to develop this market that could delay or ease the process.
For example, government initiatives to facilitate land or maritime concessions could help the
53
Otway Block, with an extension of 6.000 km2, was awarded in July 2008 to a consortium composed by
Methanex (16%), Wintershall (42%) and Geopark (42%).
97
project's early development. Or in contrast, potential modifications to the regulation of wind
projects54 could impact the evaluation of the project under the SEIA and produce a delay.
Therefore, due to the application of international standards for the design and development of
the project , it is relevant to frequently review potential changes in international regulations
or certification that may affect some of the phases of the project.
In relation to the maritime permits, these can take more than two years because of the constant
monitoring to comply with current Chilean regulations and the mitigation plans that need a
detailed analysis of the impacts in biodiversity in the construction and operation stages. The
time to obtain these types of permits needs to be considered in the plant design and
construction plans. However, some steps could be taken to speed up this process, some of which
are:
• Identify key measurement points to provide data to developers, for example, have the
government generate the data.
• Identify the potential for reuse of infrastructure for different projects, for example,
oversizing a desalination plant so that two projects can benefit from it.
Accelerate permit approval processes
Additionally, it is suggested to have an early relationship with Enap, Methanex, Wintershall and
Geopark, to ensure no conflicts at the time of project development arise due to possible parallel
activities in the site, related to oil and gas exploration.
Given the project's considerations, the complete timeline of the project could take
approximately seven years from the prefeasibility study until the start of operations.
54
There is a proposal of law that is under discussion in the Congress to regulate the construction of wind
farms (Boletin N° 14443-12 of the Deputy Chamber).
98
7. Activity 6: Design parameters
The definition of the design variables and values for the selected area or site considering the
expected operation of The Plant and related facilities was undertaken in this Activity N°6. An
engineering assessment is provided with all the high-level drawings, schematics, and diagrams
necessary to carry out subsequent potential cost assessments and procurement. The chapter and
the Annexes contain block flow diagrams (BFD), plot plans, process flow diagrams (PFD), piping &
instrument diagrams (P&ID), heat and material balance (H&MB), electrical online diagram, and
general equipment arrangement drawings.
Several simulations were made, and the main results and assumptions are given in the following
chapter. The aim of this study is to give the main keys and elements for the realization of a first
costing and sizing of a methanol production plant, with a broad view to cover the widest range of
technologies.
The following process units for The Plant shall be considered as the minimum indicative and
referential components (specifying technical equipment, instruments and other technical means is
not suggested at a pre-feasibility stage as many decisions remain open regarding technology of the
different parts of The Plant, global availability required, final existing available site area, specific
geotechnical constraints, specific regulatory requirements, battery limits, budgetary and time
constraints).
Auxiliary systems for fire control were not considered for the CAPEX, but the hydrogen and
methanol installations must be compliant with Chilean regulation and international security
standards and rules, such as NFPA2 (Hydrogen Technologies Code that safeguards the generation,
storage, piping, use and handling of hydrogen in compressed gas or cryogenic liquid form) and
NFPA30 (Flammable and Combustible Liquids Code that safeguards the hazards associated with the
storage, handling, and use of flammable and combustible liquids). A comprehensive guide for Fire
Safety, Emergency Response and Safeguards is found in the Methanol Safe Handling Manual 55.
Additionally, the developers must consider a Guide recently published by the Ministry of Energy and
SEC (Guía56 de Apoyo para solicitud de autorización de proyectos especiales de hidrógeno, Chapter
13 related to Security of Installations).
This chapter includes:

• Equipment lists for the main equipment.
• Technical hypothesis for the basis of design: operating loads, plant sizing, intermediate storage.
• Production and consumption figures.
• General arrangement drawings for the plant and each sub-system.
55
https://www.methanol.org/wp-content/uploads/2020/03/Safe-Handling-Manual_5th-Edition_Final.pdf
56
https://www.sec.cl/sitio-web/wp-content/uploads/2021/05/final_Guia-Proyectos-Especiales-
Hidrogeno.pdf
99
7.1 Equipment lists for the main equipment
The minimum equipment considered for The Plant are listed below for indicative purposes.
Electrolyser installation
Cell stacks
H2-gas-separator
O2-gas-separator
H2-gas-cooler
O2-gas-cooler
Electrolyte-cooler Katolyte
Electrolyte-cooler Anolyte
PDU
Deoxidization Column
Adsorption column n°1
Adsorption column n°2
Cooler
Separator
Regeneration Blower
DAC: Direct Air Capture

Fans
Preheater
Condenser
Economizer
Preheater
Flash Drum
Condensate Water Pump
Cooling Water Pump
Steam Condensate Pump
Steam Condensate Pump to Methanol Unit
Oxy-combustion
Oxy-combustion Boiler
Condenser
Flash Drum
Cooling Water Pump
Condensate Water Pump
Methanolation unit
H2 Compressor
100
CO2 Compressor
Recycle Compressor
Reactor feed preheater
Distillation feed preheater
Reactor cooler
Reactor
Flash drum n°1
Flash drum n°2
Distillation column n°1
Distillation column n°2
Utilities
Water treatment unit
Instrument and Plant Air System
Nitrogen Generation System (Air Separation Unit)
Cooling Water System
Fire Fighting System
Potable Water System
Waste Water Collection
Safety Shower System
Emergency Power Generation
101
7.2 Technical hypothesis for the design
General considerations:
The meterological and climatic conditions of Cabo Negro in the Magallanes Region were analyzed.
The winds in Cabo Negro are principally from the west as presented in the following Wind Rose57.
This consideration was used for the wind farm layout and the position of the Direct Air Capture
(DAC) unit.
Figure 34. Wind Rose in Cabo Negro
Source: EDF based on Red Agrometereológica de Inia
Other climatic variables such as temperature, rainfall, humidity, atmospheric pressure and sea
water temperature in the Magallanes Strait were analyzed. Temperature and rain fall are presented
in the following figure while the rest of the figures are presented in the Annex. The average
temperature is 6,5°C and the average rain is 39 mm. The average temperature of the water in the
Strait is 7,6°C.
57
EDF Andes processing of monthly data in Station Punta Arenas Rural from Red Agrometereológica de Inia:
https://agrometeorologia.cl/
Note: Hourly data from Jan 2019 to Nov 2021 was processed.
102
Figure 35. Temperature and rainfall in Punta Arenas
Source: EDF based on Red Agrometereológica de Inia
Since discharge of liquids (brine and others) is considered due to the installation of a desalination
plant, the regulation for sea water temperatures was analyzed. According to Decree N° 9058 of 2001,
these are the limits established to liquid discharges: 35°C in rivers, 30°C in lakes, 30°C in the ocean.
Natural gas quality:
From the table below, quality of Gas N°3 was considered as a representative composition and was
used for simulations. Sulphur molecules (H2S, mercaptans) were considered absent from natural gas
at this stage of the study, therefore no sulphur treatment was included.
Table 25. Different possible compositions of natural gas
BASE Gas N° 1 Gas N° 2 Gas N° 3 Gas N° 4

Methane 88,88 90,14 93,5 90,37
Ethane 5,36 5,42 5,23 5,11
Propane 2,2 2,1 0,05 2,3
i - butane 0,4 0,38 0 0,46
n - butane 0,55 0,57 0 0,58
i - pentane 0,13 0,16 0 0,15
n - pentane 0,1 0,15 0 0,13
Hexane + 0,14 0,95 0 0,1
Nitrogen 2,21 0,13 1,12 0,73
CO2 0,03 0 0,1 0,07
Source: ENAP
58
Supreme Decree N° 90: Ministerio Secretaría de la Presidencia-Establece Norma de Emisión para la
regulación de contaminantes asociados a la descarga de residuos líquidos a aguas marinas y continentales
superficiales.
103
Load transient
The ramp up/down rate of a “CO2+H2” methanol plant depends on the specific technology licensor.
An indicative rate of around 10% per hour can be considered as a preliminary assumption.
Minimum loads
For electrolysis, minimum electrical load depends on the technology (see Activity 4). A hypothesis
of 10% was taken, considering a PEM electrolyser technology.
For the methanol process, although the reactor can operate from 10 % to the nominal capacity (this
should be done modifying the auxiliary units accordingly and shall be studied in detail), the
distillation unit limits the minimum load of the plant at 40% of its nominal capacity. This could
impact importantly the MeOH annual production as the plant would stop several times during the
year. Partial load on methanol unit has an impact on the specific energy consumption as the
compressors will recirculate at lower loads.
Solutions to optimize the MeOH production
One of the solutions would be to install smaller plant sized to run simultaneously. As the distillation
unit is the debottlenecking, it could be interesting to study the possibility to resize the column rated
flow to have constant production, providing a buffer storage of crude methanol at the outlet of the
methanol synthesis loop. Last solution would be to consider a hydrogen storage to provide
additional flow to meet the low limit when required. The first assumption was considered for the
present study.
Shutdown load
Gas flowrates at the inlet of the methanol unit are reduced to 10% of the capacity for shutdown
mode.
Stand-by mode
The plant can operate on a stand-by mode with a full recycle on the methanol synthesis loop from
10% load to 40% load to keep the lines at the operating conditions (the part load on stand-by mode
could change regarding the technology licensor).
Hydrogen compression
The electrolyser produces hydrogen at 30 bar which then requires to be compressed up to 80 bar
before entering into the methanol reactor. The consultant suggests to use only one compressor
stage, which is technically reasonable.
Hydrogen storage
As previously said, a dedicated hydrogen storage was not considered for The Plant, but sensitivity
analysis shall be done in a feasibility stage in order to determine the advantages of this
supplementary equipment regarding the deliverability gains on the final product (MeOH) and
availability of The Plant. Fluctuations of electric power supply are considered to be compensated by
the turn down rate of the electrolysers, the compressors and the methanol plant. In case of a total
104
power outage from the wind farm the process plants will be shut down until restarted whenever
sufficient amount of power is available again.
Carbon dioxide compression
Carbone dioxide is directly captured from the ambient air by the Direct Air Capture (DAC) system
and is also captured from the exhaust from the oxycombustion boiler. It is produced in both cases
at atmospheric pressure. Captured carbon dioxide then needs to be compressed up to 80 bar before
entering in the methanol reactor; to comply with this condition, more compression stages with
intermediate cooling were considered.
Methanol production
For the purpose of this study the methanol process for green methanol has been supposed to supply
hydrogen and carbon dioxide at approximative 80 bar and 260°C to the methanol reactor; therefore,
slight modifications due to vendor, catalyser and reactor requirements should be considered.
Design features
The design has the following key features:
• For a production of 2,7 t/h of methanol the methanolisation unit is fed by an amount of 3,99
t/h of CO2 (2,99 in the DAC and 1 t/h in the boiler) and 0,543 t/h of green H2.
• Steam necessary for the DAC and the methanol loop are produced by the oxycombustion boiler.
7.3 Production and consumption figures
The results below were obtained after running simulations on Prosim (process simulator) and
Simulis for the thermodynamic fluid calculations.
Electrolysis Plant
Hydrogen Parameters Value Unit

Quality 99,9% Mol
Temperature 30 °C
Pressure 30 Bar
Flowrate 6643,6 Nm3/h
Value Unit
Oxygen Parameters
Temperature 30 °C
Pressure 30 Bar
105
DAC + Oxy-combustion
Carbon Dioxide Parameters Value Unit

Temperature 30 °C
Flowrate 3,99 t/h
Methanol Plant
Methanol Parameters Value Unit

Quality 99,5% Mass
Flowrate 2,715 t/h
Water Parameters Value Unit

Quality 99,8% Mass
Flowrate 1,63 t/h
Demineralized Water
Parameter Value Unit

Flowrate 8 t/h
Consumption Figures
Electrical Power
Consumer Value Unit

Electrolysis Plant 30 Mwe
Oxy-combustion Boiler 0,02 Mwe
DAC 0,8 Mwe
Methanol Plant 1 Mwe
Pumping station 2 Mwe
Hydrogen
Parameters Value Unit

Temperature 30 °C
Pressure 30 bar
106
Oxygen
Parameters Value Unit

Temperature 30 °C
Pressure 30 bar
Carbone dioxide

Temperature 30 °C
Flowrate 3,99 t/h
Demineralized Water
Consumer Temperature Unit Flowrate Unit

Electrolysis Plant 20 °C 5,4 t/h
Oxy-combustion Boiler
30 °C 0,27 t/h
(Make-up)
Methanol Plant 10 °C 2,33 t/h
Sea Water
Parameters Value Units

For demin. water production
Temperature 10 °C
Flowrate (in operating case) 9,2 t/h
For cooling
Temperature 10 °C
Flowrate 1618 t/h
Effluent Figures
As requested by the Ministry of Energy, the typical emissions and effluents during normal operation
of The Plant including the electrolysis plant, Direct Air Capture, oxy-combustion boiler were studied
and listed. Related offsites and utilities are not included in the document. Emission currents through
safety valves, relief valves, breather, or during start-up, shutdown or upset operations are not
included in this document. Please note that all figures listed below are typical values for normal
operation and are given for indicative purposes only.
107
Liquid Emissions
Condensate Water
From Main impurity Flow Unit

CO2 Capture in Oxy-
CO2 0,827 t/h
combustion
Water from methanol

Flow 1,63 t/h
Blow down
From Flow Unit

Oxy-combustion Boiler 0,16 t/h
Methanol Units 0,03 t/h
7.4 General arrangement drawings for The Plant and subsystems
The engineering assessment resulted in following engineering deliverables:
• Global Block Flow Diagram of The Plant (Annex 15.3)

• Plot Plan of The Plant (Annex 15.4)
• Piping & Instrument Diagrams for DAC & Oxycombustion (Annex 15.5)
• Piping & Instrument Diagrams for Electrolysers (Annex 15.6)
• Piping & Instrument Diagrams for Methanol Unit (Annex 15.7)
• Heat & Material Balance (Annex 15.8 and 15.9)
• Electrical One Line Diagram (Annex 15.10)
These diagrams are also sent as separate pdf, excel and visio files.
General arrangement drawings:
Electrolysis plant: the layout of alkaline electrolysis technology was considered as it is the most
conservative and public data of suppliers for similar capacities were the basis for the 30 MW
considerations. The footprint indicates a surface of 40 m x 70 m (2.800 m2).
108
Figure 36. Plot plan: Electrolyser installation for H2 production
104: Control room
Electrolyser stack
(capacity of each stack:
2MW)
Electrolyser module
(capacity of each
module: 8MW)
Gas separation unit (2

separation units for H2
and O2 for each stack)
Transformer – rectifiers
(one electrical module
for each process module)
Source: EDF Ingeum
Figure 37. Example of a 20 MW PEM electrolyser indoor installation 400 m2
Source: Hydrogenics
109
Figure 38. Example of a 25 MW PEM electrolyser installation (40 x 20 ) 800 m2
Source: Hydrogenics
Figure 39. Example of PEM electrolyser design
Source: Hybalance.eu
110
Direct Air Capture (DAC)
DAC installation: the possible layout of Climeworks technology was considered as it is the most
conservative compared to Global Thermostat (footprint ≈ 5.000 m2). The global footprint considered
8 units as shown in the figure. This consideration was suggested by installation experts and public
data from existing projects.
Figure 40. Plot plan - DAC and Oxycombustion boiler
Superposed
modules of 6
adsorbent units
each
Mutualized output
pipeline for
captured CO2
112:
Oxycombustion
boiler
Source: EDF Ingeum
111
Figure 41. Example of DAC module
Source: Climeworks
Figure 42. Climeworks' first industrial realization in 2017, 900 tCO2 captured/year at Swiss plant via 18 modules
Source: Climeworks
Methanolation unit
The footprint considered was almost 2.500 m2 based on information from technology licensors
under cover of confidentiality in the scope of other projects, therefore no source can be disclosed
here. The information varies from a supplier to another, the plot plan considered takes a
conservative area to set-up this part of The Plant.
112
Figure 43. Plot Plan of methanol unit
125: Methanol tank 2500 m3 of

for one hour of MeOH production
(for indicative purpose only)
121: CO2 compression
126: Control room
Reactor. Considered diameter:

3,5 m
Distillation columns.
Calculated diameters: 1,6 m and

3,6 m.
Source: EDF Ingeum
113
8. Activity N° 7: Cost Estimation
Activity N° 7 consists of the estimation of investment and operational costs for the methanol plant
defined in the previous activities, at a Class 5 estimation level as defined by AACE59.
Figure 44. Definition of Class 5 AACE estimation
Source: AACE International Recommended Practices
[a] The state of process technology and availability of applicable reference cost data affect the range markedly. The +/-
value represents typical percentage variation of actual costs from the cost estimate after application of contingency
(typically at a 50% level of confidence) for given scope. [b] If the range index value of “1” represents 0.005% of project
costs, then an index value of 100 represents 0.5%. Estimate preparation effort is highly dependent upon the size of the
project and the quality of estimating data and tools.
8.1 Capex & Opex estimation Class 5
• CAPEX and OPEX costs were estimated by analogy with other similar projects, non-binding
discussions with suppliers and EDF Ingeum expertise.
• Capital costs include the manufacture and supply of listed equipment but also other main costs
like transport, installation, commissioning and works.
• Operational costs are averaged in a year basis.
• Exchange rate: 1,14 USD/€
The results of the economic analysis are synthetized below.
Part of The Plant CAPEX OPEX Project Reference
TOTAL 304,4 MUSD 6,3 MUSD/year

Wind Farm (66,4 MW) 82 MUSD 2,6 MUSD/year - EDF expertise, feedback of
other projects on the same
region in Chile (confidential)
59
AACE International Recommended Practice N° 18R-97, according to Cost Estimate Classification System –
As Applied in Engineering, Procurement, and Construction for the Process Industries.
114
Electrolyser installation (30 MW) 59 MUSD 2 MUSD
(i.e. 1,97 - On-going projects
MUSD/MW) - Internal studies for EDF
Cell stacks included Group
H2-gas-separator Included -Benchmark of electrolyser
suppliers and EPCs
O2-gas-separator Included
H2-gas-cooler Included
O2-gas-cooler Included
Electrolyte-cooler Katolyte Included
Electrolyte-cooler Anolyte Included
PDU Included
DAC: Direct Air Capture (34 000 122 MUSD 0,7 MUSD -Ingeum Study
t/year) (i.e. 5 MUSD -Discussions with DAC
every 7 years for technology suppliers
maintenance)
Fans included
Preheater included
Condenser Included
Economizer Included
Preheater Included
Flash Drum Included
Condensate Water Pump Included
Cooling Water Pump Included
Steam Condensate Pump Included
Steam Condensate Pump to Included
Methanol Unit
Oxy-combustion boiler 0,75 MUSD Negligible -EDF Ingeum experience in
thermal Power Plants
projects
Oxy-combustion Boiler Included
Condenser Included
Flash Drum Included
Cooling Water Pump Included
Condensate Water Pump Included
Methanolation unit (24 kton/year) 35 MUSD 1 MUSD -Discussions with technology
licensors
H2 Compressor Included
CO2 Compressor Included
Recycle Compressor Included
Reactor feed preheater Included
Distilation feed preheater Included
Reactor cooler Included
Distillation reboiler n°1 Included
Distilation reboiler n°2 Included
Distilation condenser n°1 Included
Distilation condenser n°2 Included
Reactor Included
115
Flash drum n°1 Included
Flash drum n°2 Included
Distilation column n°1 Included
Distilation column n°2 Included
Steam condensate drum Included
Utilities 4 MUSD Negligible -EDF Ingeum experience in
thermal Power Plants
projects
Water treatment unit (pumps Included
included)
Instrument and Plant Air System Included
Nitrogen Generation System Included
(Air Separation Unit)
Cooling Water System (pumps and Included
piping included)
Fire Fighting System Not
considered
Potable Water System Included
Waste Water Collection Included
Safety Shower System Included
Emergency Power Generation Not
considered
The following figures present the distribution of the CAPEX for the components of The Plant,
considering the wind farm and also without it.
Figure 45. Cost Allocation of the Investment for The Plant (Wind Farm included) – Prefeasibility stage
Source: EDF Ingeum
116
Figure 46. Cost Allocation of the Investment for The Plant (Wind Farm not included) – Prefeasibility stage
Source: EDF Ingeum
Emergency Power Generation
The emergency power generation aspect is not included in the previous economic analysis as it will
not impact the global results on the prefeasibility stage.
Taking into consideration EDF experience in Power-to-X installations studies and electrical
emergency requirements for a safe shutdown of the Plant, the estimation of the installed capacity
results on 1 MVA backup power requirement. There are on the market gas/diesel engines
commercialized by Wartsila, Cummins or Kohler that can respond to this requirement easily, at a
cost estimated in 0,3 MUSD. The fuel can be obtained by ENAP´s gas grid passing near the location,
to avoid gas or diesel storage. With that said, the power available to the process plant provided by
the Wind Farm is rarely lower than 1 MVA (only 400 hours a year, or 4% of the time and less than
20 continuous hours at a time).
On the other hand, if stand-by mode has to be secured for the overall equipment of the Plant, the
backup power requirement raises to 8 MVA and represents an estimated CAPEX of 2,6 MUSD,
considering 4 gas engines of 500 kVA. This backup energy covers 16% of the time in a year where
the power provided by the Wind Farm would be not enough to maintain the equipment on stand-
by mode (i.e. power available to process plant is less than 8 MVA). The fuel storage can also be
avoided in that case considering a possible connection of the engines to the gas grid.
117
8.2 Economic assumptions
GENERAL ECONOMICS DATA
Unit Value
US CPI infation % 2,1%
Chile CPI infation % 2,3%
Inflation escalation starting date year 2021
Exchange rate EUR/USD 1,14
Discount rate % 5,0%
Taxes % 25,00%
Methanol selling price USD/mt 1000
FINANCING
Unit Value
Subsidy % 0,0%
Equity % 50,0%
Commercial loan % 50,0%
Commercial loan amount (WTG only) MUSD 43,8
Commercial loan amount (total) MUSD 167,7
CAPEX Breakdown - Wind Turbine Generator Unit Value

2022 % 0,0%
2023 % 0,0%
2024 % 100,0%
CAPEX Breakdown - Plant Unit Value

2022 % 0,0%
2023 % 60,0%
2024 % 40,0%
Loan duration years 20,00

First instalment date date 01/01/2025
Annuity of reimbursement (WTG only) MUSD 3,5
Annuity of reimbursement (total plant) MUSD 13,5
Interest rate % 5,0%
Wind Turbine Generator - depreciation period years 25,00

Wind Turbine Generator - residual value % 0,0%
Plant - depreciation period years 25,00

Plant - residual value % 0,0%
118
9. Activity N° 8: Interviews Analysis
The following section presents the main insights from the interviews60 conducted as part of the
project. These ideas were divided into three themes, as they are the most important for the project’s
development, and allow to gather insights from the industry, reinforcing the recommendations and
validations of the report. The first topic is the validation of the assumptions and hypotheses, the
second is the business model adjustments, and finally, the validation of the barriers and challenges.
The companies and institutions that collaborated with an interview were the following: Axens,
Airbus, BP, Copec, ENAP, Enex, Hapag-Lloyd, Maersk, Methanex, Ministry of Energy (Hydrocarbons
Unit), Siemens, Sowitec, Universidad de Magallanes, Universidad Austral, and Wärtsilä.
9.1 Validate assumptions and hypotheses.
Assumptions of the study are within the stakeholder’s expectations, in relation to the fact that green
methanol is an energy carrier that can be exported and that the wind potential in Magallanes is
essential to position the region as a competitive site to install a synthetic fuel plant. Additionally,
the location of the project in Cabo Negro was validated by interviewees as an advantage, due to its
vicinity to key companies as ENAP and Methanex and the potential possibility to share existing
infrastructures.
Regarding the design of the plant, which considers Direct Air Capture (DAC), some interviewees
consider that it is the most expensive alternative and that there could be a potential reduction in
costs if other sources of CO2 are considered. They recommended to explore other alternatives such
as Carbon Capture, Utilization and Usage (CCU) technologies or options used in other countries that
transport CO2 by ship or road from industrial sources in other locations. The latter requires an
environmental analysis of the GHG emitted during the transport of CO2. Other interviewees pointed
out that the project should have a back-up unit that uses local natural gas to complement the
intermittency of wind energy, to optimize green methanol production; although this condition could
affect the levelized cost and the green nature of the final product, this is a solution that might be
studied.
In other countries, for the CCU system, biogenic and unavoidable sources have been used to secure
the quality of the green commodity (mainly from cement and cellulose industries). In section 3.6.2
a total of 388 kton of CO2 from ENAP, Methanex and Edelmag were reported for Magallanes Region.
This CO2 feedstock could be used, but these three companies may use it for their own purposes or
could offer it to other green hydrogen projects that are announced in the region.
Backing the project up with natural gas could compensate for the variability of the renewable
sources and provide ramp-up services. However, it could also compromise the quality of the green
commodity for a potential off-taker depending on the amount of carbon-intensive fuels used to
produce the green commodity. Therefore, this must be considered under international certification
schemes and the definition of low-carbon hydrogen or low-carbon methanol discussions.
60
For further details about the interviewees and the companies that participated, refer to Interviews summary
119
9.2 Adjustments to the business model.
Organizations such as World Economic Forum and the Global Maritime Forum are enforcing policies
and initiatives to encourage the decarbonization of the sector being methanol one of the possible
fuel solutions. For the international market, the maritime sector can be an early adopter of green e-
methanol due to the characteristics of its demand and consumers. This condition allows it to pass
on cost overruns to the final customers, which have less alternatives to transport their goods in
transcontinental or long-distance trips through other carriers. It should be considered that there is
a willingness to pay a green premium to comply with sustainability standards by shipping companies
and their clients. Moreover, there is a turning point in the market where clients or providers of
maritime transport services would be willing to incorporate green e-methanol in their operations
over green ammonia given its physical-chemical advantages that allow reusing more infrastructure,
and even though green ammonia price is lower. The green e-methanol project that offers a better
price and certifies sustainable attributes will have an advantage in this market, regardless of the
location of the fuel loading port.
In the methanol market, spot transactions are a normal practice, and there is no willingness to pay
a green premium for a low carbon commodity which is more expensive than its fossil fuel equivalent.
This difficult the implementation of a project based on long term contracts that could back-up the
financial closure of the project.
For domestic demand, blending with gasoline could be a good alternative to create demand,
considering that the motor system could also be operative with minimum changes with a methanol-
gasoline blending (as observed in China (Methanol Institute, 2019)). This market should be triggered
by a quota policy, replacing a small amount of fuel, and dividing it among many users to avoid
perceiving a significant increase in the commodity price. Therefore, proper regulation is needed to
define the quota and safety issues such as storage and transport of synthetic fuels. To date, there is
no synthetic fuel regulation for the domestic market, and decrees as SD 60 and SD 160 could be
used as a good framework for the development of this market.
9.3 Validate barriers and challenges.
The use of water and territory could present a challenge due to the number of projects being
contemplated in the region. The management of the brine produced by the desalination plant is a
challenge that must be taken into consideration since poor management of this by-product can
generate environmental problems in the area. To avoid costs overruns, the guidelines for the
environmental assessment of desalinization plants should be considered (DIRECTEMAR, 2015).
Wetlands and wildlife should also be considered in the development of the project; the Canquén
Colorado or other endangered species, could become a source of environmental risk. Additionally,
turbines near duck nesting areas can be a problem because they would affect the normal breeding
cycle of the species. Therefore, special care must be taken for the layout of turbines, and it is
recommended to elaborate environmental and territorial studies, including a thorough
environmental baseline study, to have all the information needed during the assessment of these
types of projects.
120
Universities have a role as facilitators of new projects. Local industries in Magallanes analyses with
the authorities and local stakeholders the need to create synergies between projects (to share
infrastructures to reduce environmental & construction impacts). Moreover, they are open to
analyze case to case alliances with companies and to share services related to the common use of
docks, desalination plants, physical spaces, pipelines, working camps. The University of Magallanes
(UMAG) offers services related to the preparation of social, environmental, and territorial analysis,
and local expertise in energy assessments, that are key for environmental impact assessment
studies.
Collaboration between private developers and Universities will be crucial. For example, two project
developers (Total Eren and HIF) have collaborations with UMAG for the realization of courses to
close the workforce gap, the promotion of R+D, the creation of test labs, and the preparation of
adequate sensibilization and communication strategies of the projects in the local context.
The green e-methanol main competitor in the shipping sector is green ammonia (IRENA, 2021).
However, green e-methanol is considered a more energy-efficient fuel and less toxic in contrast with
green ammonia.
121
10. Activity N° 9: Economic Analysis
Activity N° 9 focuses on the calculation of LCOM, showing the weight on different components
(CAPEX and OPEX) considered.
10.1 Calculation of LCOM
First, the calculations of LCOE were made in the study (refer to activity 5). As a reminder, calculations
of LCOE were made with sensibility analysis on the discount rate61, as follows:
Table 26 Results from sensitivity analysis of LCOE for different Discount Rates
LCOE (US$/MWh) 23.2 25.3 27.4
Taking into consideration a more conservative discount rate of 12%, LCOE results in 39.2 US$/MWh.
The discount rate is the interest rate used to determine the present value of future cash flows in a
discounted cash flow (DCF) analysis. This helps determine if the future cash flows from a project or
investment will be worth more than the capital outlay needed to fund the project or investment in
the present. The lower range values of 5%, 6%, 7% and higher value of 12%62 are possible discount
rates made for the economic calculations at this prefeasibility stage.
LCOE formula used to do the calculations:

𝐼𝑡+𝑀𝑡
𝑆𝑢𝑚 𝑜𝑓 𝑐𝑜𝑠𝑡𝑠 𝑜𝑣𝑒𝑟 𝑙𝑖𝑓𝑒𝑡𝑖𝑚𝑒 ∑𝑛
𝑡=1(1+𝑟)𝑡
𝐿𝐶𝑂𝐸 = = 𝐸𝑡
𝑠𝑢𝑚 𝑜𝑓 𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑎𝑙 𝑒𝑛𝑒𝑟𝑔𝑦 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑 𝑜𝑣𝑒𝑟 𝑙𝑖𝑓𝑒𝑡𝑖𝑚𝑒 ∑𝑛
𝑡=1 (1+𝑟)𝑡
Considering:
o It = investment expenditures in the year t

o Mt = operations and maintenance expenditures in the year t
o Et = electrical energy generated in the year t
o r = discount rate
61
ImplementaSur in its study “Estudio para definer esquemas de financiamiento para proyectos de
exportación de hidrógeno verde en Chile“, used a private discount rate of 7% based on a hydrogen study for
Chile by Armijo and Philibert in 2019, which is representative of the electrical industry and a good proxy of
hydrogen projects backed by long term supply contracts. In the same study a social discount rate of 6% was
used, based on the value used by the Ministry of Social Development of Chile for project evaluations.
Another reference of discount rates for recent operations in Chile is the following: in June 2021 Enel
Generation prepared a merger with a hydro company (Empresa Electrica Pehuenche), and analysts published
the discount rates for the operation in dollars (Deloitte: 7.0% to 7.7%, Banco Santander: 6,7%, Providence
Capital: 6,84%). Green hydrogen business for synthetic fuel production could be assimilated to have similar
risks to PPA from hydraulic generation assets.
62
The discount rate of 12% was selected after discussions with IDB, due to the fact that multilateral banks as
IDB and World Bank use this discount rate to evaluate infrastructure projects in Latin America. Studies by both
entities show that the cost of capital for developing countries is higher than 10%, which leads to the
convention that as a minimum to be ‘acceptable’ a project should have an NPV greater than zero or an IRR
greater than a 12% discount rate for Bank funded infrastructure public projects (Source: Economic Evaluation
Notes by World Bank:
https://documents1.worldbank.org/curated/en/234331468329400081/pdf/339270rev.pdf ),
122
o n = expected lifetime of system or power station (25 years)
It is important to point out that LCOE does not represent cost of electricity for consumer and is most
meaningful from the investor point of view. Care should be taken in comparing different LCOE
studies and the sources of the information as the LCOE for a given energy source is highly dependent
on the assumptions, financing terms and technological deployment analyze.
The estimation of total investment and operational costs for the methanol plant were calculated
and presented in Activity 7.
Calculation of LCOM were made considering the calculations of CAPEX and OPEX engaged in Activity
7:
Table 27 CAPEX and OPEX of The Plant
Part of The Plant CAPEX OPEX
TOTAL 304.4 MUSD 6.3 MUSD/year

Wind Farm (66,4 MW) 82 MUSD 2.6 MUSD/year
Electrolyser installation (30 59 MUSD 2 MUSD
MW)
DAC: Direct Air Capture (34 000 122 MUSD 0,7 MUSD
t/year)
Oxy-combustion boiler 0.75 MUSD Negligible
Methanolation unit (24 35 MUSD 1 MUSD
kton/year)
Utilities 4 MUSD Negligible
Source: EDF
The estimations of LCOM were made considering a project commercial lifetime of 25 years (for the
Windfarm and the industrial facility) with sensibility analysis on the discount rate.
LCOM formula used to do the calculations:
𝐼𝑡+𝑀𝑡
∑𝑛
𝑡=1
Sum of costs over lifetime (1+𝑟)𝑡
𝐿𝐶𝑂𝑀 = = 𝑀𝑒𝑂𝐻𝑡
Total Production output over lifetime ∑𝑛
𝑡=1 (1+𝑟)𝑡
Considering:
o It = investment expenditures in the year t

o Mt = operations and maintenance expenditures in the year t
o MeOHt = Methanol generated in the year t
o r = discount rate
o n = expected lifetime of system or power station (25 years)
123
Table 28 Results from sensitivity analysis of LCOM for different Discount Rates
LCOE (US$/tMeOH) 2,367 2,540 2,720
Taking into consideration a more conservative discount rate of 12%, LCOM results in 3,737 US$/t.
The LCOM takes into consideration all variables: electricity costs, CAPEX of The Plant (excluding
Wind Farm as electricity costs already consider it), OPEX of Electrolyser unit, OPEX of Methanol Unit
and OPEX of DAC unit.
The Commercial loan is also considered taking following hypothesis:

Table 29 Financing hypothesis
Unit Value
Grant % 0.0%
Equity % 50.0%
Commercial loan % 50.0%
For more clarity, the LCOM is presented below showing the different parameters composing the
value and taking into consideration a discount rate of 5%.
Table 30 LCOM breakdown
Electricity Cost 551.9 USD/t
CAPEX Plant 1,165.4 USD/t
OPEX Electrolyser 172.3 USD/t
OPEX DAC 49.9 USD/t
OPEX Methanol 86.1 USD/t
Commercial loan 341.4 USD/t
LCOM 2,367.0 USD/t

Source: EDF
124
Figure 47 LCOM breakdown
3,6% 14,4% 23,3%

2,1%
7,3%
49,2%
Electricity Cost CAPEX Plant OPEX Electrolyser

OPEX DAC OPEX Methanol Commercial loan
Source: EDF
As the graph shows, the CAPEX Plant contributes the largest share of the LCOM, followed by the
electricity costs. It is worth mentioning that DAC unit represents about 40% of the total CAPEX costs
and electrolyser unit almost 20% of it.
10.2 Backup energy costs impacts on the LCOM
Considering the scenarios where backup power generation is required:
o For emergency shutdown (1 MVA), the supplementary cost of 0,3 MUSD CAPEX and
0,12 MUSD OPEX (total in 25 years) for capacity required and estimated previously,
results on a LCOM of 2.369 USD/ton.
o For emergency shutdown and to maintain the equipment on stand-by mode (8
MVA) the supplementary cost of 2,6 MUSD CAPEX and 0,9 MUSD OPEX (total in 25
years) for capacity required and estimated previously, results on a LCOM of 2.386
USD/ton.
o It is worth noting that the fuel consumption for the backup energy (potentially gas,
or diesel) has not being considered in those calculations. The fuel storage has
neither being taken into account as both scenarios contemplate a connection to the
gas pipeline. These aspects have to be evaluated on the next stages and future
feasibility studies for the development of a synthetic fuel plant.
10.3 Economic results analysis
LCOM calculations shows that competitiveness of the green solution compared to conventional
methanol must improve, since the result of the model shows that green e-methanol is at least 5
times more expensive than the conventional methanol cost (about 500 USD/ton in international
markets).
125
Prices for conventional methanol produced primarily from natural gas have fluctuated significantly
between 300 USD/ton and more than 500 USD/ton in the last decade (as observed in the following
figure), indeed they are related to the prices of fossil sources (fluctuating prices for fossil methanol
can also be expected in the future). This effect, as well as an increase of CO2 prices, could make
future price calculations uncertain.
Figure 48 Methanol Prices Reference
Source: Methanex Corporation prices from 2001 to 2022
Note: Nominal currencies; US and Asian prices are expressed in US dollars while European prices are in Euros
The next figure presents a price forecast of fossil methanol by IRENA and MMSA, which indicate
levels between 350 and 450 USD/ton from 2025 to 2030 (nominal dollars). This future trend could
imply that competitive prices for green methanol for 2030 must be in the range between 600 to 800
USD/ton, considering a premium price that is twice the price of traditional fossil fuel.
126
Figure 49 Industry methanol price forecast
Source: IHS methanol price forecast (June 2021) and MMSA methanol price forecast (March 2021)
An advantage of green e-methanol production is that costs are dominated by investment costs and
are thereby highly predictable and constant, from project launch over the plant lifecycle. The current
price gap between grey and green methanol is then projected to decrease. Nevertheless, due to
their significantly lower CO2 footprint, and to strengthen the worldwide fuel decarbonization efforts,
a price premium for green e-fuels is needed.
According to IRENA1, the current production cost of green e-methanol is estimated to be in the
range of USD 820-1.620/t assuming CO2 is sourced from Bioenergy with Carbon Capture and Storage
(BECCS) at a cost of USD 10-50/t. If CO2 is obtained by DAC, where costs are currently USD 300-600/t,
then green e-methanol production costs would be in the range USD 1.120-2.380/t.
As already mentioned, the cost of green e-methanol depends, to a large extent, on the cost of
hydrogen and CO2. The cost of CO2 depends on the source from which it is captured, (e.g., from
biomass, industrial processes, or DAC). DAC being the most conservative scenario, the results of
LCOM estimated in the study are on the higher range.
It is worth mentioning that future cost of green hydrogen production mainly depends on the
combination of further reductions in the cost of renewable power generation, electrolysers, and
gains in efficiency and durability.
10.4 Sensitivity analysis
The LCOM calculated is based on CAPEX and OPEX estimations, considering economic assumptions
presented in Activity 7.
The calculation of Levelized Cost of CO2 (LCOCO2) has been included in this activity as a complement
of the study and leads to a price of 415 USD/tCO2, which is on the range estimations of IRENA for
current DAC technology (from 300 to 600 USD/ton CO2), but is still high compared to the cost of
other CO2 sources for synthetic fuel projects.
In a case where CO2 costs are reduced, for example by capturing the CO2 from industrial processes
or considering an important reduction on the CAPEX costs of DAC in the future as indicated by some
127
vendors (view Section 2.7), a more favorable hypothetic scenario is presented, where CO2 costs
decrease from 415 USD/ton to 100 USD/ton. IRENA also estimates that CO2 from DAC could be
reduced in 2030 to a range between 150 to 300 USD/ton CO2. This consideration allows to reduce
LCOM to 1.776 USD/tMeOH and thereby improving the competitiveness for the green methanol
produced.
In the figure below, the business model shows Net Present Value (NPV), Profitability index (PI),
Internal Rate of Return (IRR) and the payback time, taking into consideration a hypothetical selling
price of 1.800 USD/t and a nominal discount rate of 5%:
10.5 Conclusions
Considering that CAPEX is 303 MUSD and OPEX is 6.3 MUSD per year, LCOM's calculation results in
2.367 USD/ton, which is almost five (5) times higher than the average cost of grey methanol. This
result is in the upper side of the IRENA estimates and studies, which indicate that green e-methanol
production costs from DAC sources would be in the range of 1.120 to 2.380 USD/ton.
On the other hand, the current price gap between grey and green products is expected to decrease
with the improvement of H2 and CO2 technologies. Furthermore, due to their significantly lower CO2
footprint, and to reinforce fuel decarbonization efforts worldwide, a higher price for green e-fuels
is necessary.
CO2 emissions analysis
The abatement cost (AC) is an indicator aimed to characterize a green action in economic terms
compared to a so-called reference option. This indicator is calculated by comparing the additional
cost of the green project option to the volume of GHG emissions it avoids. It is a useful efficiency
indicator for identifying solutions avoiding one emission unit at the lowest cost.
The CO2 emissions associated with the production of methanol from natural gas are about 0.5 kg of
carbon dioxide equivalent [CO2-eq] per kg methanol and the emissions associated with the
production of methanol from coal are 2.6-3.8 kg CO2-eq/kg methanol [Kajaste et al., 2018; MI,
2020c]).
As an initial approach, the following simplified calculation formula is suggested :

𝐶𝑜𝑠𝑡𝑠 𝑎𝑠𝑠𝑜𝑐𝑖𝑎𝑡𝑒𝑑 𝑡𝑜 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡
𝐴𝐶 =
𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑎𝑣𝑜𝑖𝑑𝑒𝑑
Considering following results from the engineering assessment :
• Total CO2 capture from DAC (25 years period) : 600 122 tCO2
• Total e-methanol produced (25 years period) : 388 680 tMeOH
Reference scenarios to produce the same amount of methanol :
• (1) CO2 emissions considering a natural gas based methanol production :
128
o 0.5 kg [CO2-eq] x 388 680 000 [kg methanol] = 194 340 t[CO2-eq]
• (2) CO2 emissions considering a coal based methanol production :
o 3.8 kg [CO2-eq] x 388 680 000 [kg methanol] = 1 476 984 t[CO2-eq]
Avoided emissions :
(1) Emissions avoided compared to natural gas based methanol production :
600 122 tCO2 + 194 340 t[CO2-eq] = 794 462 t[CO2-eq]
(2) Emissions avoided compared to coal based methanol production :
600 122 tCO2 + 1 476 984 t[CO2-eq] = 2 077 106 t[CO2-eq]
AC results :
Compared to a natural gas based methanol production :

𝑇𝑜𝑡𝑎𝑙 𝐶𝐴𝑃𝐸𝑋 + 𝑎𝑛𝑛𝑢𝑎𝑙 𝑂𝑃𝐸𝑋 𝑥 25 𝑦𝑒𝑎𝑟𝑠 460,5 𝑀𝑈𝑆𝐷
𝐴𝐶 (1) = =
𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑎𝑣𝑜𝑖𝑑𝑒𝑑 794 462 t[CO2 − eq]
= 𝟓𝟖𝟎 𝑼𝑺𝑫/𝒕𝑪𝑶𝟐
Compared to a coal based methanol production

𝑇𝑜𝑡𝑎𝑙 𝐶𝐴𝑃𝐸𝑋 + 𝑎𝑛𝑛𝑢𝑎𝑙 𝑂𝑃𝐸𝑋 𝑥 25 𝑦𝑒𝑎𝑟𝑠 460,5 𝑀𝑈𝑆𝐷
𝐴𝐶 (2) = =
𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑎𝑣𝑜𝑖𝑑𝑒𝑑 2 077 106 t[CO2 − eq]
= 𝟐𝟐𝟐 𝑼𝑺𝑫/𝒕𝑪𝑶𝟐
129
Figure 50 Business Model sensitivity scenario
LCOM USD/t 1 775,90

Discount rate % 5%
Methanol selling price USD/t 1 800
NPV MUSD 84,0
Profitability Index (PI) = NPV / I % 39,9%
IRR % 8,7%
Payback 2039
Payback time years 12
Cash flow
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
Source: Own elaboration.
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It is worth mentioning that, even with favorable hypothesis on CO2 costs, LCOM is still higher than
the current value for the conventional methanol (600-800 USD/tMeOH).
Other hypothesis of selling prices for e-methanol were included on the sensitivity analysis, varying
this parameter from 1.800 USD/t to 2.500 USD/t (in 100 USD/t intervals) as well as the discount
rate (8%, 10% and 12%). The Annex 15.28 shows the different business model scenarios requested
by Ministry of Energy. The results are presented on the table below:
Table 31 Business Model results for different case scenarios: sensitivity analysis results.
Profitability
Discount Methanol Payback
NPV Index (PI) = IRR Payback LCOM
rate selling price time
NPV / I
% USD/t MUSD % % year years USD/t
5% 1 800 84 39,9% 8,7% 2039 12 1 776
5% 1 900 102 48,4% 9,3% 2038 11 1 776
5% 2 000 120 56,9% 10,0% 2037 10 1 776
5% 2 100 138 65,4% 10,6% 2036 9 1 776
5% 2 200 156 73,9% 11,2% 2036 9 1 776
5% 2 300 174 82,4% 11,8% 2035 8 1 776
5% 2 400 192 91,0% 12,4% 2035 8 1 776
5% 2 500 209 99,5% 13,0% 2034 7 1 776
8% 2 200 58 29,6% 11,2% 2039 12 2 158
8% 2 300 70 35,9% 11,8% 2038 11 2 158
8% 2 400 83 42,2% 12,4% 2037 10 2 158
8% 2 500 95 48,6% 13,0% 2036 9 2 158
10% 2 500 46 24,8% 13,0% 2039 12 2 438
12% 2 800 35 19,9% 14,6% 2039 12 2 735
Source: Own elaboration
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11. Activity N° 10: Project Workforce Generation
11.1 Workforce estimation
One of the benefits of carrying out an infrastructure project is the creation of employment in the
region where it operates. Currently, the global renewable energy industry has employed 12 million
people, but under a 1.5 °C scenario this number is expected to increase to 38 million by 2030 and
43 million by 2050 (IRENA and ILO, 2021). Today’s scenario shows 1.3 million employees
corresponding to the wind energy sector, and it is expected to increase to 5.5 million by 2050. In the
case of Chile, there are about 9,400 workers in this sector (IRENA and ILO, 2021). This shows an
opportunity to provide additional local benefits during the construction and operation of low carbon
infrastructure projects. These benefits must be identified and quantified beforehand to manage
expectations and maximize the benefits perceived by the communities within the context of the
project.
As an example, the Cerro Dominador concentration solar plant (CSP), located in northern Chile,
estimated a generation of employment in the construction phase of a maximum of 2,000 people
(SEA, 2014). This company also stands out for having 30% of women working in the company and
that 90% of the workers are from the location where the project is being developed, which is well
above the average for the sector (Venegas, 2019). It is also committed to collaborating with the
development of local suppliers (Ministry of Energy, 2018). In addition, in 2017 Enaex defined its
purpose as being an agent of change in the communities where it operates, as part of this
commitment it created the dual education program, which seeks to promote the quality of
technical-professional education (Enaex, 2017). Also, they have an “open doors” program, which
seeks to respond to the information requirement of the local community regarding safety standards
(Enaex, 2017). More details on the employment estimated of green hydrogen projects in Chile can
be seen in the table below.
Table 32 Number of Workers declared by developers for green hydrogen projects in Chile
Hydrogen Plant in
HyEx Hydrogen Plant HyEx Ammonia Plant HIF pilot project
Quintero
Stages / 25 MW electrolyser; Ammonia production: 1,25 MW electrolyser; 10 MW electrolyser;

Project 20,5 kg H2/hour
details 18 kton H2/yr 18 ktons / year 640 ton H2/yr
Maximum
Average Maximum Average Maximum Average Average Maximum
number
number of number of number of number of number of number of number of
of
workers workers workers workers workers workers workers
workers
Construction 69 154 52 212 150 200 150 200
Operation 10 22 5 101 6 10 6 10
Close 69 150 52 11 100 150 150 150
Total 148 326 109 100 256 360 306 360
Sources: Own Elaboration based on (SEA, 2021), (SEIA, 2021), (SEA, 2020), (SEA, 2021b)
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The stages considered for the estimation of workforce potential are the following ones:
• Installation and construction: This activity includes the construction of the facilities, as well as
site preparation, civil works, interface connection, and commissioning (GIZ, 2020).
• Operation and maintenance (O&M): This activity considers the day-to-day tasks of the value
chain facilities, such as operation, security, cleaning, and maintenance (GIZ, 2020).
• Others: This includes planning, equipment procurement, equipment manufacturing and
marketing, transportation, and decommissioning stage (GIZ, 2020). This may be the category
that generates the most employment, given that these are more qualified jobs.
For each stage, direct63 and indirect64 jobs were estimated considering that 0.8 indirect jobs are
created for each direct job in the case of the wind power plant, and 0.9 indirect jobs in the case of
green hydrogen production. In the case of methanol production, a factor of 0.37 was used (GIZ,
2020), in the case of the desalination plant 0.2, and in the case of the DAC system 0.1 factor was
assumed (Markaki, Belegri-Roboli, Michaelides, Mirasgedis, & Lalas, 2013). Employability factors
(EF) of the different parts of the value chain were considered using a regional multiplier to adapt
the information used to the local context (GIZ, 2020).
Now breaking down the EF for the wind farm, an estimation of the EF is provided in the following
table:
Table 33 Employability factor for the wind farm
Direct
Activity Unit Employability
Factor
Construction FTE65/MW 3.41
O&M FTE/MW 0.2
Total FTE/MW 4.9
Source: (GIZ, 2021a)
The table below shows EF for green hydrogen production data based on the study “Quantification
of the labor linkage for hydrogen development in Chile under an export scenario” (GIZ & HINICIO
Chile, 2021).
63
Corresponds to jobs generated directly by the basic activities of the project but does not consider the
intermediate inputs needed for the manufacture of equipment (GIZ, 2021). In other words, they are those
related to planning the project, construction and installation, assembly of the plant, operation and
maintenance of the plant, and decommissioning activities.
64
Considers the employment of the industries that support and supply the basic activities necessary for the
project (GIZ, 2021). In other words, they are those jobs that are produced by intermediate supply or services
in the value chain.
65
FTE means full-time equivalent, and is an employee's scheduled hours divided by the employer's hours for
a full-time workweek. When an employer has a 40-hour workweek, the FTE is 1.0. Meanwhile, when the
employees scheduled to work 20 hours per week the FTE is 0.5.
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Table 34 Employability factor for hydrogen production
Direct
Activity Unit Employability
Factor
Construction and
FTE/100MW 112.8
installation
O&M FTE/100MW 52.5
Total FTE/100MW 165.3
In the table below an estimation of EF for the methanol plant is provided based on different
publications on the subject (GIZ, 2021a).
Table 35 Employability factor for methanol production
Activity Unit Direct Employability

Factor
Construction and FTE/kton 0.76
installation
O&M FTE/kton 0.1
Total FTE/kton 0.9
And in Table 36, an estimation for the EF of the DAC system is provided based on a U.S. consulting
firm.
Table 36 Employability factor for DAC
Activity Unit Direct Employability

Factor
Construction and FTE/Ton 0.0015
installation
O&M FTE/Ton 0.0004
Total FTE/Ton 0.0019
Source: (Rhodium Group, 2020)
In the case of estimating the number of jobs at the desalination plant, no bibliographic data was
found, so the analysis was performed based on the data submitted to the SEIA by different
desalination projects in Chile normalized by the production capacity of each plant66.
66
For more details see estimated jobs for different desalination plants in the Anexxes.
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Figure 51 EF per L/s during construction stage
3,5
3
Index (worker/L/s)
2,5
1,5
0,5
0
0 500 1000 1500 2000 2500
Capacity (L/s)
Figure 52 EF per L/s during operation stage
1,2
0,8
Index (worker/L/s)
0,6
0,4
0,2
0
0 500 1000 1500 2000 2500
-0,2
Capacity (L/s)
Lastly, to estimate the amount of employment, the following input data were considered:
electrolyser of 30 MW, 8 wind power plants of 8.3 MW each, a methane production of 22 kt/y, a
DAC with a capacity of 34 kt/y, and a desalination plant with a production capacity of 46 kt/y.
135
Since the desalination plant designed is smaller than any benchmark in Chile, the EF of the smallest
project presented under the SEIA was considered, which is Planta Desalinizadora Piloto Minera
Escondida Limitada, as this project has similar characteristics to the one presented in this study.
The results are shown below:

Figure 53 Job creation summary
800
700
Amouunt of jobs (person)
600
500
400
300
200
100
0
Construction and
O& M Indirect jobs Total
installation
Total 339 46 253 638
Desalination Plant 10 3 3 16
DAC 52 12 6 70
Methanol synthesis 17 2 7 26
Electrolyzer 34 16 45 95
Wind Farm 226 13 192 431
In contrast with the employment data of other projects mentioned above. In the table below you
can see how the estimates made for this Plant are similar to those made in the other projects, being
a little higher because this plant also considers carbon capture and methanol production. This
conclusion is except for the HIF project which for the size of Ez has a high number of workers.
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Table 37 Number of workers per Ez MW
The Plant HyEx Ammonia Plant HIF pilot project Hydrogen Plant in Quintero
Phase/Project
(30 MW Ez) (25 MW Ez) (1.25 MW Ez) (10 MW Ez)
Construction 11.3 5.28 140 17.5
Operation 1.53 2.12 6.4 0.8
Source: Own Elaboration
Figure 54 Number of workers over time
350
Number of employees (person)
300
250
200
150
100
50
0
T3-2027 T1-2028 T2-2028 T3-2028 T1-2029 T2-2029 T3-2029 T1-2030
Total 339 339 339 329 103 103 103 46
Desalination Plant 10 10 10 0 0 0 0 3
Methanol synthesis 17 17 17 17 17 17 17 2
Electrolyzer 34 34 34 34 34 34 34 16
DAC 52 52 52 52 52 52 52 12
Wind Farm 226 226 226 226 0 0 0 13
Wind Farm DAC Electrolyzer Methanol synthesis Desalination Plant Total
Source: Own Elaboration
The figures above show the construction and installation phase, which would last approximately
two years, and represents the largest number of potential workers. The operation and maintenance
phase are the stage that generates the fewest jobs.
On the other hand, if we analyze the total number of jobs generated in the different parts of the
value chain, the wind power plant is the one that creates the largest number of jobs. Additionally,
the entire project would produce 339 direct new jobs in the construction and installation phase, 46
direct jobs in the operation and maintenance phase, and 253 indirect jobs category.
Among the indirect jobs, an important service that should be considered for the commercialization
of e-fuels is the testing of the final product to satisfy international standards. Based on the
interviews performed in the context of the study, information was obtained that Universidad de
Magallanes is generating a synthetic fuel testing laboratory, which could generate jobs for no more
than 8 people and could be scaled up to supply the demand of other projects in the region.
11.2 Consideration for the incorporation of women into the workforce
In the world, only 32% of the renewable energy workforce is constituted by women (IRENA and ILO,
2021) and in the case of Chile, that participation is limited to only 23% during 2019 (Orellana, 2021).
137
Therefore, there is a big gap to cover in this matter and should be considered during the
development of the project. In 2019 the “Energy + Women” plan was launched in Chile, this
voluntary plan seeks to identify opportunities for the incorporation of women in the energy industry
and thus generate proposals to reduce the gap that currently exists (Ministry of Energy, 2020).
In addition, labor flexibility programs can be implemented to retain, attract, and promote female
talent; measures can also be incorporated to promote women to reach leadership positions (Krauer,
Vilalba, Aiello, & Beaujon, 2021). The NCh 3262-2012 voluntary standard allows to obtain an Equal-
Conciliation Seal, therefore, it is recommended to take into consideration this standard at the time
of implementation, as it can incorporate the policies and recommendations from the beginning
(Faúndez, Peyrín, & Weinstein, 2013)
11.3 Services required
The growth of the renewable energy and hydrogen markets will trigger the creation of new jobs as
it will require new skills, major infrastructure overhauls, and new support services. Hence, in
addition to the social benefit of the Plant, other companies could benefit from participating in the
synthetic fuel industry providing services during the design, construction, and operation phases.
Some of these industries are shown below:
• Construction, which is associated with the early phases of the Plant.

• Electrical machinery manufacturing, which relates to the manufacturing and equipment
procurement phases.
• Wholesale and retail trade, which may be related to the transportation, and maintenance
phases.
• Renewable Energy production, which is related to the early phases allowing these types of
companies to reach domestic customers.
• Biomass crop cultivation or CO2 unavoidable sources storage and transport. Using CO2 as a
feedstock for synthetic fuels, biomass and other unavoidable sources (like the cement industry)
could provide cheaper sources of CO2. Bio-CCS is a carbon capture solution proposal in the
European Union on the biofuels side, and that can serve as a resource for e-fuels that require
CO2 (IEA, 2018). In the case of CO2 produced by unavoidable sources, this would help these
types of industries to reduce their emissions and carbon taxes. The capture, storage, and
transport of CO2 would be a niche in the domestic market.
• Mining of critical metals67. Minerals are essential components in many clean energy
technologies such as wind turbines, power grids, and even electric vehicles (IEA, 2021).
Therefore, the demand of these types of services will proliferate as clean energy transitions
accelerate. The Plant, in the construction phase, would require these types of materials that
could impact directly or indirectly the domestic companies dedicated to this industry
• Research and Development for the design, operation and scalability of the project.
67
A critical metal is a metal and non-metal considered vital to the economy, for example, neodymium in wind
turbines, tellurium in solar panels, and platinum in fuel cells.
138
In Chile, 817 large68 and medium-sized69 companies have been identified to participate in the green
hydrogen industry, of which 75% are domiciled in the Metropolitan Region and 25% are domiciled
in other regions (GIZ, 2020). It is worth noting that within this 25% there are no companies domiciled
in the region of Magallanes and Chilean Antarctica (GIZ, 2020), which would mean an opportunity
for new businesses or for the companies identified to open a branch and create new jobs in the
region.
Considering transportation and storage, there may be the opportunity to promote new companies
in the Magallanes region. It could also occur that local companies operating fuel storage and
distribution infrastructure may also provide services for new developments (GIZ, 2020). And hence,
in these types of services sectors-coupling could be a good alternative to meet the Plant services
demand.
Research and Development is related to professional, scientific, and technical services, which
supports the conceptualization and operation stages of the Plant (GIZ, 2020). For instance, research
goes hand in hand with the development of new technology that facilitates the industry's growth
during its early and late stages, fostering human capital generation and postgraduate degrees.
There are also services related to methanol quality certification in the operation, which is a relevant
requirement of the fuel industry.
Regarding the decommissioning phase, no renewable energy project in Chile has reached the end
of its operational life, but existing recycling companies can likely carry out this phase, and new
recycling companies could also be created to cover this sector (GIZ, 2020).
The following table shows the number of companies in Chile that could benefit according to size and
phase:
Table 38 Potential beneficiary companies in the green hydrogen industry
Project Manufacture and Installation and Operation and Decommissioning

development commercialization assembly of maintenance
of equipment connections
Large 107 89 71 73 71
Medium 196 86 94 99 94
Source: (GIZ, 2020)
The table above shows the potential for improvement of the local economy, particularly of medium
and large-scale industries. In addition, it is estimated that 2,016 small70 companies could participate
in this industry, which would also benefit the country's small and medium-sized enterprises (GIZ,
2020).
11.4 Community outreach
A project like this has an important impact on the community where it will be carried out, and
therefore it is necessary to set up a suitable plan for community outreach. A community
68
Large company: Sales volume greater than 100,001 UF/year (GIZ, 2021).
69
Medium company: Sales volume between 25,000 – 100,000 UF/ year (GIZ, 2021).
70
Small company: Sales volume between 2,401-25,000 UF/year (GIZ, 2021).
139
engagement plan should be drawn up based on the “Guide for the participatory development of
energy projects” (Ministry of Energy, 2019). The guide developed by the Ministry of Energy aims to
establish a framework for interaction between the community, companies, and the State,
promoting sustainable development of investment projects. This guide indicates that every project
development should be based on certain principles and criteria, such as early and continuous
dialogue, transparency, representativeness, respect for human rights, and the search for the
common good and sustainable development.
Furthermore, the guidelines present and explain the actions to be carried out according to the
project phase and corporate policies. Therefore, it is recommended that companies establish a
person in charge of relations with the territory inhabitants and communities. Moreover, for areas
and territories with indigenous people presence, the participation of experts in intercultural
relations is required. These guidelines would be a key strategy to face the presence of indigenous
communities, protected territories and species, and heritage routes.
In addition to carrying out the aforementioned plan, it is necessary to establish relationships with
higher education institutions in the area, in this case, the Universidad de Magallanes (UMAG). It is
proposed to collaborate with UMAG in the preparation of the EIA, as well as in the preparation of
the Citizen Participation Plan. This type of collaboration has already been carried out during the
development of other projects, as the agreement was made with Total EREN and HIF (UMAG, 2021).
In this agreement, it was also agreed to collaborate in the development of research and study
programs that can contribute to the social, environmental, and R&D fields (UMAG, 2021).
These agreements consider the exchange of researchers, students, and professors, university
internships at HIF, support for doctoral and master's degree programs (ELECTRICIDAD, 2021). The
most important point of this agreement is the joint survey of the technical and professional profiles
that will be necessary for the new green hydrogen industry (ELECTRICIDAD, 2021). Given the above,
it is recommended to generate links with the UMAG that can contribute to the current efforts in the
academic and technical fields.
11.5 Conclusions
There is the potential to develop 339 new jobs in Magallanes in the construction and installation
phase, 46 in the operation and maintenance stage, and 253 in the indirect jobs category. These
numbers will help increase the number of employed people in Magallanes71 that to date are 72,330
(INE, 2022). Additionally, up to 8 jobs could be generated with the synthetic fuel laboratory that is
being carried out. It is also important to consider the participation of women in the generation of
employment, for which it is possible to participate in plans such as "Energy + Women" or in the NCh
3262-2012 standard.
On the other hand, 871 large and medium-sized companies with the potential to participate in the
hydrogen industry were identified. Even though, none of the companies are domiciled in the region
of Magallanes and Chilean Antarctica. This opens an opportunity for smaller companies located in
71
As a reference, ENAP Magallanes has 1.098 workers. Methanex informs in its Sustainable Report 2020 that
15% of its workers are in Chile (around 224 workers).
140
the region, the creation of new companies, or attract these non-domiciled industries that could be
tempted to open a branch in the region, increasing employability.
The primary services that will be required and will benefit from the Plant in the early phases are
going to be: constructions sector, research and development, electrical machinery manufacturing,
renewable energy production, mining of critical metals, and biomass crop cultivation and CO2
capture, storage and transport. Meanwhile, in the transportation, and maintenance phases the
services required will be wholesale and retail trade sector.
Finally, a community engagement plan should be made based on the "Guide for the participatory
development of energy projects" (Ministry of Energy, 2019). In addition, relationships should be
established with universities present in the region, with which support can be sought for the
development of the EIA and citizen participation plans.
141
12. Activity N° 11: Project Business Model Assessment
12.1 Business Model Structure
Nowadays, there is a private initiative in the Region for the production of fossil fuel methanol,
financed by private funds without any subsidy or public policy involved. Therefore, the
implementation of subsidies could distort today’s market. Because of this every public policy or
subsidies must comply with providing a minimum concessionally able to reflect the socio-
environmental benefits that this project provide, and improving the competitivity of the project to
compete with fossil fuels commodities.
The development of national and international green hydrogen projects has shown that such
complex systems require the collaboration of several actors, each one covering a specific part of the
hydrogen value chain. These type of partnerships between companies has helped to reduce the risks
associated with the project, ensuring its funding and development. Moreover, external actors such
as funding institutions, multilateral agencies, and the market itself will also play a key role in the
development of green e-methanol projects.
Figure 55 Stakeholders for the development of a green hydrogen project
Source: (GIZ, 2021)
As it can be seen in the Figure above, the project developer will integrate the technology supply and
services for the construction and operation of the plant, while coordinating the relationship with
the off-taker. Here the off-taker’s motivation to procure a green commodity will be triggered by the
demand or potential regulation that enforces to incorporate this product into its feedstock. Enabling
infrastructure will also be crucial for the project operation, relying on distribution infrastructure,
142
ports, laboratories, etc. Funding will have concessional and private components in the form of
blended funds, where concessional funds will probably be an important milestone for the financial
closure.
Based on today’s green hydrogen projects, a Project Sponsor could be an initial investor which
operates and develops part of the value chain (electricity utilities, chemical industries, or O&G
companies), a technology provider interested in the implementation and testing of its technology,
or even the off-taker of the project interested in securing the provision of the green commodity in
the long-term. Each participant could assume more than one role within this generic architecture.
For example, a technology provider could compromise equity to implement a component of the
H2V value chain, or an end-user could monetize their long-term purchase commitment, as a
contribution to equity for the project.
The following diagram aims to organize the previous concepts in the context of the green methanol
project studied. The diagram illustrates the theoretical role of each actor for the development of
the plant. The revenue streams of the project are highlighted in blue to illustrate the source of
income associated to the delivery of the commodity, and to the economic value of the green
attribute associated with the product.
Figure 10 shows how the project’s vehicle (or the SPV) is the entity that links all the components
throughout the development of the value chain. In other words, it is where the design, construction,
and operation are integrated, achieving the final production of the commodity.
Figure 56 Business model of the project
143
The methanol consumer may be motivated by regulation or market trends, both of which are closely
related to the expectations of downstream markets regarding the attributes behind the commodity
they are purchasing. Instead, the technology suppliers will play an important role in guaranteeing
the performance of the project and avoiding cost overruns in its execution and operation.
12.2 Off-takers
An increasing global demand for methanol is expected to reach 500 Mt by 2050, as seen in the
following Figure72, projecting a large potential market for green e-methanol covering 50% of its total
(250 Mt by 2050) (IRENA & Methanol Institute, 2021). IRENA indicates that to produce 250 million
tons of e-methanol, it is required to construct 280 methanol plants (with a capacity of 2.500
tons/day) and that the construction of an e-methanol plant would require about 2-3 years to build
if modularised and standardised.
Figure 57. Renewable Methanol Production Forecast
Source: IRENA Transforming Energy Scenario
Renewable methanol will play a key role in supporting the low carbon transition for hard-to-electrify
applications, such as some heavy or long-haul trucks as well as ship engines. There are some
initiatives to foster this transition, for example, in the European Union, the RED II directive mandates
that 14% of the energy used in transport should come from renewable sources by 2030 (IRENA &
Methanol Institute, 2021). Another example is the Renewable Transport Fuel Obligation (RTFO)
scheme introduced by the United Kingdom in 2008. This scheme incentivizes renewable fuels such
as green e-methanol by awarding double credits per liter or kilogram supplied. These credits are
known as Renewable Transport Fuel Certificates and can be traded between suppliers of fossil
72
The demand projections presented in the Figure, unlike the market size shown in section 3.2, assume an
optimistic scenario for green e-methanol considering, for instance, the maritime industry demand, which was
not considered in the analysis in section 3.2
144
transport fuels such as diesel or gasoline. In addition, the consolidation of grey methanol as a fuel
in many applications, eased the gradual transition to green e-methanol, considering that the
distribution and transport infrastructure could be reused.
Furthermore, it is expected that green e-methanol addresses part of the fuel needs for the chemical
industry, light vehicles, heavy trucks, and ships in the longer term as stated previously. Due to its
high-octane rating, methanol is a versatile fuel that can be employed in internal combustion engines
(gasoline or diesel), hybrid systems, fuel cells, cookstoves, and boilers (IRENA & Methanol Institute,
2021). For instance, more than 1,000 boiler units consumed 2 million tons of methanol in China in
2018 (IRENA & Methanol Institute, 2021). As a transportation fuel for applications such as trains and
heavy-duty, e-methanol is attracting growing interest in parts of the world, like Israel, India, and
Europe (IRENA & Methanol Institute, 2021). In the case of fuel cell vehicles, companies like Ford,
General Motors, Honda, Mazda, Mitsubishi, Nissan, and Toyota had demonstrated in multiple
prototypes the potential of methanol as a fuel (IRENA & Methanol Institute, 2021).
The maritime sector use fuel oil and diesel and is responsible for about 3% of all greenhouse gases
(GHG) emissions and 9% of the GHG emissions associated with the transport sector considering CO2,
sulfur oxides (SOx), nitrogen oxides (NOx) and particulate matter (PM) (IRENA & Methanol Institute,
2021). The International Maritime Organization has set a goal to reduce greenhouse gas emissions
(GHG) from international shipping by at least 50% by 2050, compared to 2008 levels, and a reduction
of SOx emissions from 3.5% to 0.5%, being e-fuels one of the possible alternatives or solutions to be
implemented (Ash, N. and Scarbrough, T., 2019). Taking these goals into consideration, compared
with e-gasoline or e-diesel that still emit large amounts of SOx, NOx, and PM into the atmosphere.
Green e-methanol production process is sulfur-free and, when burned, produces almost no PM and
low amounts of NOx. For example, compared with fuel oil, methanol generates 99% less SOx, 95%
less PM, and 60-80% less NOx (IRENA & Methanol Institute, 2021)73, being a good alternative for
methanol dual-fueled, and vessels based on fuel cells to reduce all their GHG emissions (Chatterton,
C., 2019). Even though the high cost of green e-methanol, associated with CO2 capture, this e-fuel
has advantages that could compete with its other competitors in the shipping sector in the long
term. Furthermore, according to the interviews, it is the most promising sustainable fuel in this
sector. For example, compared with green ammonia (considered the backbone for the
decarbonization of the sector (IRENA, 2021)), green e-methanol emits 60-80% less nitrogen oxide,
is less toxic, and doesn't need to be pressurized because it stays in a liquid state, making it easier to
handle and cheap in infraestructure terms (Ash, N. and Scarbrough, T., 2019) (IRENA & Methanol
Institute, 2021). Liquefied Natural Gas (LNG) is another potential competitor of methanol since it
has similar emissions rates. However, green e-methanol continues to be a cheaper alternative due
to the fact that methanol remains in a liquid state, making the infrastructure investment cost lower.
For instance, converting a bunker vessel to LNG could cost fifteen times more than converting it to
methanol (FCBI Energy & Methanol Institute, 2015). This situation could also be seen in the
refuelling stations, as the cost of the methanol refuelling stations is similar to refuelling stations for
73
Methanex also indicates in 2020 Sustainability Highlights, that methanol used as a clean-burning marine
fuel, significantly reduces emissions of SOx by 99%, NOx by 80%, particulate matter by 95% and CO 2 from
combustion by 15%, when compared to Tier I vessels running on traditional marine fuel (heavy fuel oil).
145
liquid fuels (i.e. gasoline and diesel) and cheaper than the other competitors such as LNG and green
ammonia that are similar to hydrogen (see Figure below).
Figure 58 CAPEX of Service Station Infrastructure by fuel type
CAPEX of Service Station Infraestructure

3.000
2.500
CAPEX (USD million)
2.000
1.500
1.000
500
0
Hydrogen Methanol Liquid Fuels Electricity
(diesel, gasoline)
Source: Own Elaboration based on (Chatterton, C., 2019)
Although the conversion of the existing large and small ships could take more than 15 years due to
a new fleet is needed and container ships are usually written off over 25-30 years (Dansk Energi,
2020), the conversion to methanol could be achieved at a moderate cost (IRENA & Methanol
Institute, 2021). Nowadays, more than 20 large ships are powered by methanol (IRENA & Methanol
Institute, 2021). For instance, companies like Viking line (1 unit), Ocean network Express (11 units),
Stena Line (1 unit), Innogy HTWG Konstanz (2 units) are currently developing ferries, tourist boats
and chemical tankers that use methanol as fuel (Chatterton, C., 2019). Moreover, companies like
Maersk are developing methanol large powered vessels expected to be operational by 2024
(MAERKS, 2021). From the interviews it can be stated that a green e-methanol provider is being
sought for these types of methanol-powered ships. Hence, it could be affirmed that the demand for
green e-methanol will begin to grow as these initiatives increase. For example, as early as 2024,
there could be a demand for green e-methanol from MAERSK vessels.
Methanol also is part of the chemical industry market. Nonetheless, methanol is not the final
product; instead, it is used for producing other chemicals such as formaldehyde, acetic acid, and
plastics. As shown in the next figure, 69% of methanol end-use demand correspond to the chemical
industry. The conversion of this industry into a potential market may be a good opportunity, given
that to date it has shown an intention to reach net zero in the long term. An example is the Chemical
Industries Association from the United Kingdom, which goal is to achieve net-zero by 2050 through
more than energy-saving solutions, being open to innovative solutions (CIA, 2021).
146
Figure 59 World 2020 methanol demand by end use
Note: Alternative Fuels refers to gasoline blending, biodiesel & dimethyl ether (DME)
Source: (IRENA & Methanol Institute, 2021)
One of the green e-methanol advantages is that this fuel could be converted into other types of
fuels like e-gasoline, e-diesel, and e-kerosene, allowing it to be a pivotal step to reach markets where
these fuels are used and set net-zero targets. Furthermore, methanol could be a candidate to be
implemented for more advanced hybrid airplanes utilizing a combination of fuel cells and batteries
(IRENA & Methanol Institute, 2021).
In terms of distribution and transport infrastructure, methanol can also be transported through
pipelines. Moreover, refueling stations dispensing methanol are essentially identical to current
filling stations, requiring very little change in consumer habits (IRENA & Methanol Institute, 2021).
However, if methanol is used as a transport fuel, a retrofit must be made to the tank size due to the
lower energy density of methanol in contrast to fossil fuels.
147
Figure 60 World methanol demand by region
Source: (Methanol Institute, 2016)
Worldwide, methanol demand is concentrated in China, followed by the rest of Asia (excluding
China), Europe, North America, and South America (as can be seen in the figure above). Chinese
methanol consumption had grown to 54% of global demand (Methanol Institute, 2016), a country
that had promoted methanol as a transport fuel, essentially to decrease its dependence on imported
fuels. If China decides to change its goals to encourage the use of renewable methanol in line with
the Announced Pledges Scenario (APS), declared in 2020 for reaching a CO2 emission peak before
2030 and net zero by 2060 (IEA, 2021b), the Asian country won't be able to produce its entire
demand because the theoretical feasible e-methanol Chinese production is only 1.79 million tons
(Bazaluk et al., 2020), just a 2.56% of its total methanol production and 2.24% of its demand in 2019
(Methanol Institute, 2021).
In consequence, the potential markets in order or importance (size) are Asia, Europe, and South
America. Although North America currently represents a significant methanol demand, with the re-
emergence of North American production, the region could shift from an importer to an exporter
(Methanol Institute, 2016). In the case of Chile, there are existing agreements with Germany and
Japan for green hydrogen export (GIZ, 2021c). Considering that hydrogen transportation is still
expensive, it is important to consider that the methanol value chain is a viable option to transport
hydrogen with the lowest final costs (GIZ, 2021c). Some of the ports considered in these agreements
are Rotterdam, Antwerp and Zeebruge, Hamburg, Chiba, and North Rhine-Westphalia ports,
expanding Chile's capacity to reach the potential markets mentioned above (GIZ, 2021c).
Finally, the low hanging fruit for the development of this market could be using it in blending
applications with fossil fuels like gasoline or diesel for internal combustion engines (ICEs). As a
reference, the use of methanol in a blend with gasoline or diesel, has also grown rapidly since the
mid-2000s. The leading cause for the growing methanol demand in China has been the
implementation of blending to improve the thermal efficiency of methanol ( (Methanol Institute,
2016), (Bazaluk et al., 2020)). For instance, Chinese automotive manufacturers offer methanol-
powered vehicles, including cars, vans, trucks, and buses able to run on M85 (85% methanol, 15%
gasoline) and M100 (pure methanol), and these vehicles costs are like regular ones (IRENA &
Methanol Institute, 2021).
148
In 2017, Methanex, ENAP and UMAG developed a pilot project in Punta Arenas to test methanol
blending in internal combustion engines, with reduced percentages of methanol below 5% (CERE,
2019). Further testings are recommended to verify the effect of such blends in the gears and internal
motor components.
Also, actual regulation of fuels in Chile74, considers conditions for methanol blending with gasoline.
Therefore, future regulations must consider blending of synthetic fuels and diesel. The Ministry of
Energy is working in the update of Decree N° 160/2009, to adopt the security conditions for the new
liquid fuels that are not based on fossil fuels. Another regulatory aspect that must be addressed by
the authorities is the quality specifications for liquid synthetic fuels, which could imply a
modification of Decree N° 60/2012. If part of the future synthetic fuels are to be used in the local
market, these modifications are required at least in the mid-term. The Ministry of Energy has
advanced in the regulation of fuels and particularly of hydrogen (see the regulatory map75) but is
aware that it is important to advance with this regulation.
12.3 Breakeven price analysis
As developed in Activity N° 9:, LCOM has been calculated to be between 2.300-2.700 USD/ton, 5 to
6 times higher than grey methanol traded in the international spot market (between 400 and 500
USD/ton for the last five years). This is a challenge for the development of the project since if there
is no off-taker willing to pay five times the price of the commodity, other instruments should be
used, such as carbon market instruments, concessional funding instruments, or a project promoter
that could accept a short-term economic disadvantage, with the expectation to gain an
advantageous position in the mid to long term. As a good benchmark, in the LNG market, there is
experience selling “carbon-neutral”76 fuels, where the price of the green premium for that
commodity is close to 6% of the commodity price, very low compared with the green premium
calculated in this exercise (Institute for Energy Studies, 2021). On the other hand, meetings with
stakeholders have evidenced that there is no willingness on paying a high green premium in the
methanol market.
If the project relies on carbon markets to close the viability gap, a certificate price of 1.800
USD/tonCO2 would help to reduce the gap fully. The certificate price was calculated considering the
emission factor of the Plant obtained from the GHG emission reduction estimation Tool for synthetic
fuel projects (4e, 2021), using as input the parameters specified in the Plant hypothesis of this study.
The reduction of emissions gave a value of 30,218 tCO2/year. A relevant point is that this Tool
considers the emission reductions from the combustion emissions that the final consumer stops
74
Decreto 160/2009: "Reglamento de Seguridad para las instalaciones y operaciones de producción y
refinación, transporte, almacenamiento, distribución y abastecimiento de combustibles líquidos".
Decreto 60/2012: "Especificaciones de calidad de combustibles gasolina para motores de ignición por chispa,
petróleo diesel grado B1 y B2, kerosene, petróleo combustible N°5 y N°6".
75
Fuels Regulatory Map of the Ministry of Energy:
https://energia.gob.cl/sites/default/files/documentos/mapa_de_regulacion_nacional_de_combustibles.pdf
Regulatory Guide of Fuels in Chile:
https://energia.gob.cl/sites/default/files/documentos/documento_de_regulacion_nacional_de_combustible
s.pdf
76
In this market, this means selling a commodity where its life-cycle emission factor has been mitigated
through offsets mechanisms, usually from the supplier.
149
emitting when buying green e-methanol compared to fossil methanol's consumption (combustion).
Considering as a baseline the emission reduction from the combustion reflects how green e-
methanol would benefit some sectors such as maritime transport with a dual fuel system or vehicles
that use methanol blending and that burn methanol. Today’s scenario shows a big challenge to
reach those prices, as can be seen in the next graph.
150
Figure 61 Carbon market prices for voluntary and compliance international markets
The graph shows that today’s most attractive market would be a compliance market (Emission Trade
Systems and carbon taxes), but it is restricted to each jurisdiction where it develops, reducing the
possibility of participating in those markets. A voluntary international market presents prices
between 0.45 – 59.17 USD/tonCO2, with an average value close to 10 USD/tonCO2. However, higher
prices are restricted to projects based in nature, since there is a huge demand on this attribute
thanks to the co-benefits associated with the project and the compliance with Science Based Targets
initiative (SBTi) to become Net-Zero. For this reason, closing the viability gap with offsets would only
help to reduce it, but won’t be enough.
Moreover, to fully close the viability gap based on subsidies, a contribution equal to 95% of the
project CAPEX would be required (close to 285 MMUSD). Chile is no longer a member of the Official
Development Assistance (ODA) list, so it is also very difficult to receive this kind of funds for
infrastructure projects, especially for the amount of investment required. In 2021, Chile’s
Government assigned 50 MMUSD to six (6) green hydrogen projects (Corfo, 2021) in the framework
of its green hydrogen strategy. Even if there were subsidies for these projects, it’s uncertain that
more resources would be intended for these initiatives in the future, especially for the amount
required in this case.
Due to the high CAPEX investment for this project, a potential developer could be a major energy
company interested in investing in a synthetic fuel project. A company that could assume an
economic loss in the short-term, but in the long-term expects to generate an advantageous position
by a green commodity uprise, which could be triggered by an increase in the demand for the green
product.
A synthetic fuel project will mean a long-term investment, initially expensive and uncertain during
the first years of operation. Oil & Gas (O&G) major companies are being involved in renewable
151
energy projects encouraging the development of these technologies and taking the risk related to
them.
Companies like BP, Shell, Chevron, Total, Eni, and Exxon have invested billions into clean energy
projects (NS Energy, 2020). From these companies, BP was the one that took the risk considering a
long-term horizon, started investing in renewable energy from 1980 looking toward other energy
sources beyond oil (NS Energy, 2020). Shell, for example, is investing in projects like SkyNRG, a
project plant that will produce 100,000 tons/yr of Sustainable Aviation Fuel (SAF) (NIRAS, 2020).
Furthermore, Shell also has the New Energies 2016 strategy, which pursues an energy transition
with three main approaches: incorporating new fuels for transport, such as biofuels and hydrogen,
integrating new energy solutions, and connecting customers with new business models for energy
(Shell, NEW ENERGIES, 2016). Initiatives as the ones mentioned above demonstrate the potential of
O&G companies to be part of a project for this magnitude and their willingness to take the risk
associated with it. As well, other initiatives like Net Zero Teesside, where BP, Eni, Equinor, Shell, and
Total are part of an alliance that invested $1 billion from the Oil and Gas Climate Initiative fund (BP,
2020b), show the willingness to form an association to foster the development of Net Zero projects.
Considering the previous insights, a project of this kind would face several economic challenges and
bringing down the LCOM would require a mix of different initiatives and funds. Among the initiatives
that could help the viability of the project are bringing down the cost of technology77, catalyzing
climate funds to generate new revenue streams, and identifying an actor willing to invest in the
short-term at a potential loss, but expecting to generate interesting revenues in the long term with
the uprise of a green commodity price.
12.4 Conclusions
Consistent with current green hydrogen projects, a project sponsor could be an early investor
operating and developing part of the value chain (electricity utilities, chemical industries, or oil and
gas companies), a technology provider interested in implementing and testing its technology, or
even the buyer of the project, interested in ensuring the long-term supply of the product.
Unlike the technology providers that will play an essential role in guaranteeing the project's
performance and thus avoiding cost overruns, in terms of demand, the methanol consumer may be
motivated by regulation or market trends.
Renewable methanol will play a key role in supporting the low carbon transition for hard-to-electrify
applications, such as some heavy or long-haul trucks as well as ship engines. Moreover, due to its
high-octane rating, methanol is a versatile fuel that can be employed in internal combustion engines
(gasoline or diesel), hybrid systems, fuel cells, cookstoves, and boilers (IRENA & Methanol Institute,
2021). The maritime sector is potential niche because, in line with its decarbonization goals and and
compared to its competitors green e-methanol has advantages ranging from lower emissions, low
infrastructure costs, and ease of handling. The chemical industry is also a potential market, given
that to date it has shown an intention to reach net zero in the long term and is one sectors that
demand most methanol. Additionally, one of the green e-methanol advantages is that this fuel could
77
Waiting for technology to reduce investment costs or modify the configuration of the project (using CCU
instead of DAC or backing electricity generation with NG within the boundaries of green hydrogen definitions).
152
be converted into other types of fuels like e-gasoline, e-diesel, and e-kerosene, allowing it to be a
pivotal step to reach markets where these fuels are used and set net-zero targets. In terms of
countries the potential markets in order or importance (size) are Asia, Europe, and South America.
The high LCOM of the Plant it is a challenge for its development since if there is no off-taker willing
to pay five times the price of the commodity, other instruments should be used, such as carbon
market instruments, concessional finance instruments, or a project promoter willing to implement
the solution speculating a price increase in the short term. As a good benchmark, in the LNG market,
there is experience selling “carbon-neutral” fuels, where the price of the green premium for that
commodity is close to 6% of the commodity price, very low compared with the green premium
calculated for this project (Institute for Energy Studies, 2021). On the other hand, meetings with
stakeholders have evidenced that there is no will on paying a high green premium in the methanol
market.
If the project relies on carbon markets to close the viability gap, a certificate price of 1,800
USD/tonCO2 would help to reduce the gap fully. Beside to fully close the viability gap based on
subsidies, a contribution equal to 95% of the project CAPEX would be required (close to 285
MMUSD). Due to the high CAPEX investment for this project, a potential developer could be a major
energy company, such as O&G, interested in investing in a synthetic fuel project. A company that
could assume an economic loss in the short-term, but in the long-term expecting to generate an
advantageous position by a green commodity uprise, which could be triggered by an increase in the
demand for the green product. A synthetic fuel project will mean a long-term investment, initially
expensive and uncertain during the first years of operation.
153
13. Activity N° 12: Policies and Strategies Recommendations
The following chapter aims to provide recommendations for the Ministry of Energy of Chile and
other public institutions to facilitate and promote investment in projects such as the Plant defined
in this study. Hence, based on the information analyzed and the interviews conducted, some
technical, economical, strategic, and environmental recommendations are provided for potential
policy development:
13.1 Technical
• Undertaking additional studies to optimize the concept of the plant considering location,
renewable sources potential, and access to port infrastructure: Evaluating the possibility of
changing the location to other areas of the country with more industries nearby may be
beneficial to obtain an industrial source for CO2 that does not involve the installation of the
DAC system that represents 40% of the overall CAPEX. An interesting alternative to analyze is
to evaluate the implementation of CCU or Bio-CCS in unavoidable sources and transporting it
to the production site, instead of using a DAC system, since the cost could be cheaper in the
short term. For a CO2 source to be viable, it must be unavoidable78 and generate more than
0.01Mton/yr (GIZ, 2021d). In Chile there are 32 sources that meet these requirements emitting
a total of 18,036 CO2 kton/year (RETC, 2019). The sources are mainly located in the Maule,
Ñuble, and Bío-Bío regions, representing 71% of the total CO2 emissions. Hence, if the Plant
requires 34 kton/year will only consume a 0.19% of the Chilean CO2 emissions available.
Execution time: Short term. Institution in charge: Project Developer.
• Generate guidelines for safe operation and incorporation of green e-methanol as fuel for use
in vehicles or electricity generation. Methanol is corrosive to some metals, and a technical
standard considering safety requirements to use green e-methanol in vehicles engines or
guidelines about how modify vehicles engines, could accelerate the process of vehicles
adaptation (Methanol Institute, 2021). As presented in the interviews, safety is a key step to
consider methanol blending as a possible fuel for vehicles, thereby creating guidelines to use
green e-methanol or any synthetic fuel in Chile would facilitate the adaptation of green e-
methanol as transport fuel reducing the emissions of the sector. These guidelines could be in
line with update of Decree N° 160/2009, and a modification of Decree N° 60/2012.
Additionally, encouraging the deployment of renewable fuels through a quota system would
facilitate price incentives to provide stability for sustained growth and investment. The UK
RTFO regulation is an example of a policy that encourages the use of renewable fuels through
a quota scheme incentivized through "credits” (IRENA & Methanol Institute, 2021). Also, a
percentage of countries have encouraged the use of methanol by blending it with gasoline
through local standards, as in the case of China's GB/T standard, the US STM standard for M85
(85% methanol), and the Israeli standard for M15 (15% methanol) (DTI, 2019; Methanol
Institute, 2019). Execution time: Long term. Institution in charge: Ministry of Energy,
Superintendence of Electricity and Fuels (SEC by its acronym in Spanish), and Ministry of
Environment.
78
The sectors considered as unavoidable are: Energy generation, cement, food industry, wood industry, and
paper and cellulose industry (GIZ, 2021d).
154
• Development of environmental studies to determine the impact of synthetic fuels on
ecosystems: Such as the possible cumulative effects of plant construction in a given area, the
impact of wind farms on birds, or the impacts of desalination plants on the coastal ecosystem.
Execution time: Short term. Institution in charge: Ministry of Energy and Ministry of
Environment.
• Advantages and disadvantages of a Synthetic fuel plant in the Magallanes Region. Among its
comparative advantages, the Magallanes region has low costs in renewable energy such as
wind power and access to existing ports and pipelines that, to date, have export routes. For
instance, projects such as Haru Oni and H2 Magallanes will use ports in the region, such as the
Mardones port (Aqua, 2021) (H2Chile, 2021). From the interviews, it can be concluded that
there is pertinent infrastructure for the project's development, but it will be necessary to
estimate future demand for port infrastructure and articulate new actors to share this
infrastructure. In addition, since Methanex owns the infrastructure and routes to destinations
such as Asia, providing services to access its infrastructure for green e-methanol exportation
could be considered. Finally, the Magallanes region has the heritage route “Canquén-
Colorado”, that passes through the high wind resources districts of Cerro Sombrero, Porvenir,
Punta Arenas, and San Gregorio (Bienes Nacionales, 2020). According to the interviews held,
the restriction and area associated with this route should be evaluated and limited to provide
certainty to project developers.
13.2 Economical
• Encourage carbon pricing, blended finance instruments and quota regulations to reduce the
viability gap: The economics from the analyzed Plant result in a LCOM five times higher than
its fossil fuel equivalent, in a market where there is no evidence of an intention to pay a high
green premium for a green commodity. A carbon market could help to shorten this gap but not
to fully close it, since average offset prices in a carbon voluntary market are close to 10
USD/tonCO2, far from the required 1,800 USD/tonCO2 to achieve parity for the present Project.
On the other hand, applying subsidies to shorten the gap would require to subsidy 95% of the
CAPEX to fully close the gap, close to 285 MMUSD, which is far from the 50 MMUSD awarded
to 6 GH2 Chilean projects in 2021. With a drastic reduction of the CO2 and GH2 prices79, the
LCOM resultant would still be 914 USD/tonMeOH, two times higher than the fossil methanol
price. Therefore, complementary instruments would be required to reduce the price gap of the
project, among these are the optimization of the configuration of the project (for example,
using a CCU system instead of a DAC system), the use of carbon market instruments, using
concessional finance instruments, or the implementation of stronger regulations.
To implement the Plant a combination of efforts from the carbon market, concessional finance
and off-takers will be required to fully close the viability gap, along with new configuration of
the project or technology cost reduction that could help to lower LCOM of the commodity.
On the other hand, encouraging the blending of co-fuels can help to develop the domestic
market, this would also generate a good instance to generate pilot projects. In Chile, a study
79
Considering a GH2 price of 1.5 USD/kg, CO2 price equal to 100 USD/t, and a discount rate of 5% (optimistic
scenario)
155
conducted to evaluate the blending of methanol with gasoline found that the optimal blend
was close to 1%, with a maximum close to 2% (information obtained from interviews).
However, new tests show that blending with methanol could be used in Fiat vehicles with
minimal modification (DTI, 2019). This could help validate the technology, develop standards,
and decarbonize the transportation and/or agriculture sector.
One thing to keep in mind is that if the development and supply of methanol-powered vehicles
increase without proper regulation, this could trigger illegal blending. Therefore, illegal
blending should be confronted with policies that clearly define the labeling and sales process.
Execution time: Medium term. Institution in charge: Ministry of Energy, Ministry of
Environment, Ministry of Transport, fuel distributors companies, and isolated fuel consumers.
• Assess the implementation of price-based approaches for market enhancement (a Contract-
for-Difference scheme): Price-based mechanisms aim to provide a stable and predictable
source of revenue for clean energy investments to achieve a specific installed capacity. This
mechanism would require an intermediary who would handle double-sided80 auctions to
conclude long-term contracts between aggregated buyers and providers. Then, a reliable fund
would cover the difference between the offered price from providers and the strike price for
buyers. The funding would attract private capital with the expectation of creating incomes as
the gap between costs and price decreases. Hence, when the technology becomes more
competitive, reducing the price of green e-methanol, and the demand for synthetic fuels
becomes greater, this cost-price gap would be inverted, allowing to recover the funds.
Therefore, it would be like a refundable grant that ensures a minimum concessionally. This
measure would provide investment security and would suit mainly export-oriented clients who
are willing to pay a premium, such as the case of the Oil & Gas or the maritime sector. Yet, it
could also target domestic industrial consumers' demand (for example, blending applications).
Moreover, a Contract-for-Difference (CfD) mechanism would install, ensure, and monitor
optimal environmental and social criteria for the proposals accepted in the auction process81.
Execution time: Medium term. Institution in charge: Ministry of Energy
13.3 Strategic
• Prioritize unavoidable sources for the development of synthetic fuel industry: Identifying and
prioritizing the production of e-fuels with unavoidable sources would improve the
competitiveness of e-fuel initiatives, in this line, the CCU will be more competitive than DAC
systems.
Moreover, the creation of a company to capture the unavoidable CO2 and then transport it to
the different areas where it will be used can be encouraged. This would make the
implementation of a CCU easier. Execution time: Medium term. Institution in charge: Ministry
of Energy
80
A double-sided auction aims to obtain the most competitive price from the supply side and simultaneously
obtain the highest availability to pay from the demand side.
81
The CfD scheme is being implemented through the H2Global initiative to bring supply and demand closer
together with a double auction mechanism. An intermediary (HINT.CO) handles the auctions, whose
objective is to conclude long-term purchase agreements on the supply side and short-term resale
agreements on the demand side. The intermediary compensates for the difference between the offer and
the asking price through financing. For more information see: https://h2-global.de/
156
• Encourage the development of professionals in Chile for a synthetic fuel industry: Identify the
work force gap for the development of synthetic fuel projects. UMAG has already identified the
gap that exists in working capital and therefore the development of professionals and/or
technicians should be focused on reducing the gap that was identified. For example, laboratory
technicians specialized in synthetic fuels or wind turbine specialists, who can participate in the
synthetic fuels industry, specialized in different parts of the value chain. Furthermore,
international cooperation should be encouraged to share knowledge and create jobs.
Partnerships between new developers and universities should also be encouraged. Execution
time: Short term. Institution in charge: Ministry of Energy and Ministry of Education.
• Facilitate and encourage sector-coupling: This means the reuse of existing infrastructure as
pipelines and transport or the complementary use of ports. For example, in some cases, a good
alternative to face the elevated cost of DAC is to generate e-methanol from the CO2 obtained
from a bio-methanol plant. Therefore, if one project considers the production of bio-methanol,
this project could be coupled with a green e-methanol project in the same location (IRENA &
Methanol Institute, 2021). Execution time: Short term. Institution in charge: Ministry of Energy
• Encourage agreements with Asian countries: Asia already has experience in working with fossil
fuels and is a large consumer of methanol. Therefore, a strategy to generate agreements with
Asian countries would help facilitate the demand for synthetic fuels, especially green e-
methanol. An example of the type of agreement that could be signed is a Memorandum of
Understanding (MoU) with South Korea to share experiences and knowledge between both
nations (Mineria Chilena, 2021). This is a key agreement for Chile as Korea is a key political and
commercial partner in Asia, being one of the largest hydrogen markets in the world (Minería
Chilena, 2021). These agreements open the possibility of collaborating in GH2 derivatives, such
as green methanol. In addition, Japan has the potential to be a partner in the methanol market,
given the low transportation costs despite the long distances between Chile (GIZ, 2021e). It
should also be considered that there are already methanol export routes from Chile to Asian
cities, such as Tokyo, Seoul, Beijing, Shanghai, and Hong Kong, from Punta Arenas. Execution
time: Short term. Institution in charge: Ministry of Energy and Ministry of Foreign Affairs.
• Develop policies and strategies encouraging the use of synthetic fuels in the domestic
maritime demand: Given the characteristics of the maritime transport demand, this sector
could early adopt synthetic fuels and have a higher likelihood of passing on costs to end
customers. Furthermore, the International Marine Organization (IMO) has established a
reduction of sulfur emissions from 3.5% to 0.5%, which has been implemented in Chilean ports
according to information gathered in the interviews. These voluntary requirements will
become mandatory as demand adopt these strategies, and Chile will need to implement them.
Chile has more than fifty ports and harbors. The top ten ports in Chile, San Antonio, San Vicente,
Quintero, Mejillones, Coronel, Huasco/Guacolda, Valparaíso, Caldera/Calderilla, Caleta Patillos,
and Puerto Ventanas represent two thirds of the national total commercial throughput and are
located in the northern half of the country (Ash, N., Sikora, I. & Richelle, B, 2019). Based on
trade activity, the hypothetical bunker oil consumption of merchant fleet visiting Chilean ports
is approximately 15,000 m3/day (Ash, N., Sikora, I. & Richelle, B, 2019), which is equivalent to
12,675 ton/day (with bunker oil density of 0.845 ton/m3). In this market, the companies would
prefer the harbor that offers reasonable prices no matter the location and would be willing to
pay a green premium. Therefore, the competition will be based on price and the sustainable
157
attributes associated with this green e-methanol. For this, it will be necessary to reduce the
final fuel price as much as possible (i.e., using blended finance mechanisms, or other CO2
sources as CCU) and ensure compliance with high-level environmental criteria. These
environmental criteria include: use greenfield renewable energy projects, prioritize off-grid
renewable production over the use of renewable supply contracts, incorporate Measurement,
Reporting and Verification (MRV) mechanisms in the project to guarantee the quality of the
commodity, ensure a stable source of CO2 from unavoidable sources.
Hence, developing policies and standards that regulate this process and encouraging synthetic
fuels according to IMO strategies would facilitate integrating this demand. Moreover, to date
the IMO states the key role of ports in the decarbonization of shipping. IMO net-zero strategy
promotes the cooperation between ports and shipping sector through encouraging, for
example, safe and efficient bunkering of alternative low-carbon and zero-carbon fuels (IMO,
2019). Execution time: Medium term. Institution in charge: Ministry of Energy and SEC
• Development of policies to incorporate synthetic fuels in Chilean ports. Due to the location and
geography of Chile, a potential market is the maritime transport sector, specifically ships that
dock and sail in Chile and need to refuel (Ash, N., Sikora, I. & Richelle, B, 2019).
•
13.4 Regulatory
• The Ministry of Energy must track and ensure the consistency of regulatory changes made to
the law or decrees that affect the development of this type of project. For example, the current
discussion of the law to regulate the construction of wind farms82 is also amending the Law on
General Bases of the Environment (Diario Constitucional, 2021). There is also a proposal to
modify the use of seawater for desalination83, which seeks to establish that the water resulting
from a desalination process constitutes a national asset for public service. Another proposal
plans to create a National Desalination Strategy to develop guidelines and priorities for the use
of seawater (Senado, 2019). A new regulation obliges desalination projects to have 2 years of
data collection84. Another relevant point is to follow up constituent process to lower the level
of uncertainty that exists today with the future of this type of project in the country and
consider possible changes that would impact or benefit hydrogen or synthetic fuel projects.
• Magallanes already has regulatory instruments that favour investments in the region, such as
Law 19.606 (Austral), Law Navarino for Tierra de Fuego (duty and VAT exemptions) and the
economical conditions of Free Zone. However, additional instruments could be studied by the
authorities to promote green hydrogen investments, with special tax or incentive regimes as
others implemented recently in the region by other countries85 that are also planning to export
green hydrogen derivatives.
82
There is a proposal of law that is under discussion in the Congress to regulate the construction of wind farms
(Boletin N° 14443-12 of the Deputy Chamber).
83
Boletin N° 11.608-09 of the Senate “Modifications of water usage for desalination”.
84
New regulation “Armada de Chile- Guía para la evaluación ambiental de proyectos industriales de desalación
en jurisdicción de la autoridad marítima. Nov 2021”.
85
Colombia approved Law 2099 in July 2021 (which modified Law 1715/2014), to include green hydrogen as
a non conventional renewable source. The investments, goods, equipments and machinery used for the
158
• Execution time: Short term. Institution in charge: Ministry of Energy, Ministry of Finance
13.5 Conclusions
Market signals that allow the implementation of these types of projects are necessary, given a
relevant feasibility gap. One of the required changes is the decrease in technology prices. For
example, the decrease of DAC prices (which represent 40% of the total CAPEX) and/or the obtention
of CO2 from other sources through CCU or Bio-CCS technology, could be positive for reducing the
CAPEX. Capturing CO2 in other regions of the country and transporting it to the Plant in Magallanes
is another option, apparently cheaper than the others. However, the GHG emissions of the transport
medium (road or ship), could affect the green attributes of the project. Location of a synthetic fuel
plant in other areas of Chile could also be analyzed, considering a tradeoff between renewable
energy sources and CO2 feedstock sources.
The maritime sector is a potential market due to its hard-to-electrify characteristic. Thanks to the
comparative advantages that methanol has with other sustainable fuels and the willingness of the
industry to pay a green premium, shipping is a relevant niche for e-methanol at the international
and national levels. Hence, it should be considered a key product to facilitate the adaptation of this
sector offering a competitive e-fuel that meets international standards.
Another market niche that should be considered for policy development is blending methanol with
gasoline, an option requiring specific regulations about safety issues, storage, and transport. The
Ministry of Energy is advancing with the modifications of security rules for sustainable liquid fuels
(Supreme Decree N°160/2009) and technical specifications of sustainable liquid fuels (Supreme
Decree N° 60/2012), but this task requires additional priority.
Collaboration between private developers and Universities will be crucial, for the advancement of
work force training and the creation of capacities of local small and medium companies.
It is relevant to consider that the Government must persist in its strategy of signing international
agreements with countries that have potential off-takers, such as Asian countries, to facilitate the
development of synthetic fuels in Chile.
production, storage, conditioning and distribution of hydrogen will benefit from the deduction of income tax,
VAT and duties exemption, and accelerated depreciation.
159
14. Activity N° 13: Final Workshop
The final workshop was held in English through the zoom platform and was recorded (the video will
be delivered to the IDB and the Ministry of Energy by the Consultant). The event was created as a
seminar to allow a more comfortable interaction between the parties. The invitations were sent in
Spanish and English, with the schedule of the workshop, and a request to register to the event. Once
registered, the link to the event was sent personalized to each person. The presenters were Natacha
Marzolf (IDB), Camilo Áviles (Ministry of Energy), Rafael Caballero (EDF Andes), Rodrigo García
(ImplementaSur), Cristina Figueroa (ImplementaSur), Camila Torres (EDF Ingeum), Stephan Seidelt
(EIFER-EDF), and Pablo Cruz (Consultant). The questions were sent through the “Questions &
Answers” section, and answered at the end of the presentation and by e-mail.
14.1 Workshop Structure

Table 39. Structure of the Workshop
Topics Details Presenter

Reception & general overview by EDF EDF (Rafael Caballero)
Welcome to the Introductory Words, and objective and
IDB (Natacha Marzolf)
event (15 mins) motivation of the project
Introductory Words Ministry of Energy (Camilo Avilés)
Technical analysis of synthetic fuel
EDF (Stephan Seidelt)
production
Commercial analysis ImplementaSur (Cristina Figueroa)
Pablo Cruz
Evaluation Matrix of synthetic fuels EDF Ingeum (Camila Torres)
Technologies and providers.
EDF Ingeum (Camila Torres)
Summary of
methodologies & Infrastructures, supplies & sizing of the
results (55 mins) EDF Ingeum (Camila Torres)
plant, Plot Plan
CAPEX, OPEX, LCOM EDF Ingeum (Camila Torres)
Timeline and social, environmental &
ImplementaSur (Cristina Figueroa)
territorial challenges
Interviews ImplementaSur (Cristina Figueroa)
Jobs & Services, Business Model ImplementaSur (Rodrigo García)
Recommendations ImplementaSur (Rodrigo García)
Questions (20 mins) Q&A Moderation EDF (Rafael Caballero)
Closing (5 mins) Closing remarks EDF/IDB/Ministry of Energy
160
14.2 Workshop assistance statistics
A total of 78 people were invited to the event, with the possibility to resend the invitation to three
other people from their own institution, reaching a total of 121 people invited to the event. 63
persons submitted the form and received the link to the event. There was a total of 32 different
registered institutions86, of which 26 attended the event (as can be seen in the following graph).
Figure 62 - Institutions Registered for Workshop
INSTITUTIONS REGISTERED
Attend Didn't attend
19%
81%
The number of attendees reached 64 people, without counting the panelists. Most of the attendees
were related to the company's business, finance, or business development positions and also
professionals from the academia.
The name of the institutions and companies that attended the Workshop, listed in alphabetical
order, is the following:
Aes Chile, AME, Asesorias Enersur Ltda, Asociación de H2 Chile, Axens, BP, Colbun, Copec, CORFO,
Enap, Enex, GHD, GIZ, Gore Magallanes, HIF, Ifpen, Methanex, Ministerio de Energía, Seremi de
Energía, Siemens, Sowitec, Total Eren, Universidad Autónoma, Universidad Católica, Universidad de
Magallanes, World Bank Group.
The questions and answers asked during the workshop can be seen in the following table.
Question Answer
What is the market value FOB/CIF-Europe that The study did not focus on offtake prices, however it
was considered for the pre-feasibility study? can be said that green e-methanol prices are not
available in the market today. There are
announcements of MoU signed by developers and
offtakers, but offtake prices are not disclosed. The fossil
methanol prices were analysed, because they are a
reference. For example, prices for conventional
methanol from natural gas have varied between 300
USD/ton and 500 USD/ton in the last decade. Future
86
Details about the institutions and companies that registered and attended, can be found in Annex 15.29
161
Question Answer
prices of e-methanol will be also affected by carbon
taxes, which adds uncertainties to price forecasts.
What data did you consider for the dimensioning Regarding the wind farm and its dimensioning, a
of the wind farm? Does the project include backup sensibility analysis was done for the wind farm's
generation? What plant factor did they get? capacity considering the electrolysis capacity of 30 MW
I understand that the methanol plant needs a high defined to determine which size of WF was the best
capacity factor, which means a stable electricity option (i.e., resulting in the lowest LCOH). Once
connection. Have you taken this into account, defining the wind farm capacity and considered losses
since you are feeding it with intermittent energy? (like internal losses from the Wind Farm and
Because in the proposed location, there is no transmission line losses), we could determine the
possibility of connecting the wind farm to an number and type of turbines to be considered for the
electrical network, the wind turbines will work in project. The gross capacity factor resulted in 62%, and
“island” mode. What solution was considered to the net capacity factor resulted in almost 55% at the
maintain the electrical balance of the park due to process plant inlet.
the intermittence of the wind resource? Regarding backup generation, we considered
Do you have the values for the LCOH and the emergency energy backup systems and backup systems
levelized cost of carbon captured? that would allow maintaining the equipment on
standby mode when there is not enough wind. This was
addressed with gas or diesel engines with a CAPEX of
approximately 2.5 million dollars that have to be added
to the CAPEX showed.
The methanol-gasoline blending project The pilot project referred is effectively the Methanex
mentioned in Chile was the one developed by pilot project in Punta Arenas. Other pilot projects for
Methanex? methanol in vehicles are also named within the study
that could serve as a reference for future projects.
162
15. Annexes
163
15.1 Annexes for Activity 1
The following Annexes present the Technology Fact Sheets for each one of the eight fuels analized.
15.1.1 Technology Factsheet: CO2 to Methanol

Reaction equation: CO2 + 3H2 -> CH3OH + H2O + 50 kJ/mol
Process description: H2 and CO2 react in an exothermal CuO/ZnO/Al2O3 catalyzed reaction to

methanol, water, and heat. The process runs typically at temperature of 200-250 °C and at 30-80
bar. However, conversion rate of CO2 in direct methanolation is only about 20-35%, so recycling of
unreacted gases is mandatory for high efficiencies. Methanol upgrading comprises two-column
distillation. The process heat from the synthesis reactor generates steam, which provides some heat
for distillation. Electricity is mainly required for compression of CO2 and H2 to reaction pressure.
Simplified mass & energy balance:
H2O
0,6 t
0,2 t
H2
1t
MeOH synthesis MeOH
CO2
1,4 t
0,4 MWh
Heat
Low-carbon alternatives: The only other way to produce methanol from non-fossils sources are
from biomass/wastes via gasification and catalytic syngas conversion to methanol.
Parameter Value
Net water consumption 2,2 kg H2O/ kg methanol
CO2 1,4 kg CO2/ kg methanol (95% carbon efficiency)
Energy balance Net electricity & heat consumption (heat from reactor < heat for distillation)
Process steps 1 (methanol synthesis)
TRL 8
Power-to fuel efficiency 55% (65% electrolysis; 85% methanol synthesis)
Production costs 800 US$/t methanol (±15%)
(Electricity 25 US$/MWh; 300 US$/t CO2; 1500 US$/t H2)
164
15.1.2 Technology Factsheet: CO2 to DME via Methanol
Reaction equation: 2 CO2 + 6 H2 -> (2 CH3OH + 2 H2O) -> CH3OCH3 + 3H2O + 73 kJ/mol
Process description: Methanol is produced from CO2 via direct methanolation (see factsheet “CO2
to Methanol “). Afterwards, the methanol is dehydrated over acid alumina catalysts or zeolites at
250-400°C and 10-30 bar into DME. Upgrading of DME in a two-column distillation is similar to
methanol. Electricity is mainly required for compression of CO2 and H2 to reaction pressure. DME
synthesis is commercially available, several large-scale plants run in the world.
H2O H2O
0,8 t 0,4 t
0,3 t
H2 MeOH 1t
MeOH synthesis DME synthesis DME
1,4 t
CO2
2,0 t
0,6 MWh 0,1 MWh
Heat Heat
Low-carbon alternatives: DME is considered as a clean substitute for diesel; so, all low-carbon diesel
fuels are potential alternatives: biodiesel from oil crops, diesel from biomass/waste gasification +FT
as well as hydrogenated vegetable oils.
Parameter Value
Net water consumption 2,6 kg H2O/ kg DME
CO2 2,0 kg CO2/ kg DME
Energy balance Net electricity consumption and net heat production (heat from
both reactors > only heat for DME distillation; no high methanol
purity not required)
Process steps 2 (methanol synthesis & DME synthesis)
TRL 8+8
Power-to fuel efficiency 50% (65% electrolysis; 85% methanol synthesis 90% DME)
Production costs 1035 US$/t DME (±15%)

165
15.1.3 Technology Factsheet: CO2 to Gasoline via Methanol
Reaction equation: 1. CO2 + 3H2 -> CH3OH + H2O + 50kJ/mol
2. CH3OH -> (-CH2-) + H2O + 56 kJ/mol
to Methanol“). Afterwards, methanol is converted in MtG process into gasoline, either in a fixed-
bed or fluidized-bed process latter one not demonstrated at large scale so far). The fixed-bed
process is carried out in two steps. In the first step, methanol is dehydrated to dimethyl ether. This
step is carried out catalytically at pressures between 14 and 24 bar and temperatures around 400
°C. In the second step, the dimethyl ether is converted to gasoline on ZSM-5 catalyst at the same
temperature and pressure range. The catalyst deactivation through coke formation during the
process requires a regularly off-burning. In the fluidized bed process, the dehydration of the
methanol takes place in the same step as the conversion of the dimethyl ether, with a continuously
discharge and regeneration of the catalyst. Due to the catalyst pore sizes, no carbohydrates with
more than 12 Carbon-atoms are formed, resulting in high-quality gasoline fuel mixture, with only
minor post-treatment requirements (durene reduction). Electricity is mainly required for
compression of CO2 and H2 to reaction pressure, the plant is a net heat producer.

H2O H2O
1,5 t 1,5 t
0,5 t
H2 MeOH 1,0
Gasoline
MeOH synthesis MtG synthesis t
2,7 t 0,2 t LPG
CO2
3,7 t
1,2 MWh 1,3 MWh
Heat Heat
Low-carbon alternative: For gasoline, bioethanol, hydrogen as well as electricity/batteries are the
low-carbon alternatives for gasoline usage.
Parameter Value
Net water consumption 4,3 kg H2O/ kg gasoline
CO2 3,6 kg CO2/ kg gasoline
Energy balance Net electricity consumer and heat producer
Process steps 2 (methanol synthesis & gasoline synthesis)
TRL 8+8
Power-to fuel efficiency 52% (65% electrolysis; 85% methanol & 95% gasoline synthesis)
Production costs 1700 US$/t product (±15%)

166
15.1.4 Technology Factsheet: CO2 to Kerosene via Methanol
Reaction equation: 1. CO2 + 3H2 -> CH3OH + H2O + 50kJ/mol
2. CH3OH -> (-CH2-) + H2O + 56 kJ/mol
to Methanol“), the subsequent kerosene production equals chemically the MtG conversion.
Methanol is converted into kerosene via MTSynfuels process. First, methanol is dehydrated to DME
and water similar to MtG. Subsequently, the mixture is converted in a second reactor over zeolite
catalysts into C2-C4 olefins. These olefins form through oligomerization, hydrotreatment as well as
fractionation a middle distillate crude with roughly 40% diesel, 50% kerosene and 10% gasoline
fractions. Therefore, the methanol-to-kerosene process and its product composition resembles
more the FT than MtG process. So far, no industrial demonstration plant is run on this process.
However, all process steps - methanolation, olefin formation (well-known as widely applied
methanol-to-olefin process) as well as the upgrading of syncrude - are fully commercialized.
H2O H2O
2,6 t 2,6 t
0,9 t
H2 1t
MeOH Kerosene Kerosene
MeOH synthesis
4,6 t synthesis 1t
CO2 byproducts
6,3 t
2,0 MWh 2,3 MWh
Heat Heat
Low-carbon alternative: Due to the difficulties of electrification or direct hydrogen use for aviation,
many different fuels are envisaged to replace fossil kerosene in the future, like HEFA, bioethanol or
butanol via alcohol-to-jet conversion and FT fuel from gasification of biomass & wastes or CO2.
Parameter Value
Net water consumption 7,3 kg H2O/ kg kerosene
CO2 6,3 kg CO2/ kg kerosene
Process steps 3 (methanol & syncrude synthesis & upgrading)
TRL 8+8+8
Power-to fuel efficiency 50% for syncrude (65% electrolysis; 85% methanol; 90% kerosene
synthesis)
Production costs 1800 US$/t product (±15%)
167
15.1.5 Technology Factsheet: CO2 to Kerosene via RWGS & FT
Reaction equation:
1. RWGS CO2 + H2 -> CO + H2O - 42 kJ/mol
2. FT CO + 2H2 -> (-CH2-) + H2O +160 kJ/mol
Total: CO2 + 3H2 -> (-CH2-) + 2 H2O +118 kJ/mol
Process description: CO2 and hydrogen are converted into syngas (CO/H2) through RWGS. The
syngas is then synthesized to syncrude via Fischer Tropsch process and upgrade to fuels. RWGS is
an endothermic reaction of CO2 with H2 to produce CO and water. So, the reaction requires heat
and runs at temperatures between 800-1000 °C and at pressures up to 30 bar; some electricity is
required for gas compression. The RWGS plant is a net electricity and heat consumer. With
additional hydrogen, syngas composition can be adjusted for further synthesis. CO2 conversion is
assumed to be 100%.
In FT, syngas is converted with iron or cobalt catalysts into a waxy FT syncrude. This syncrude
consists of long chain hydrocarbons and is subsequently upgraded by a hydroisomerisation,
hydrocracking, oligomerization, aromatizing, alkylation and distillation to the desired fuels. With FT,
diesel, kerosene and a light fraction used for energy are produced. Their product ratios can be
adapted in some range, maximized share for diesel are 60% and 50% for kerosene. The light fraction
share is around 15-25%. CO conversion is assumed to be 88%. The FT plant is a net electricity and
heat consumer, and so also the combined RWGS & FT plant.

H2O H2O
2,6 t 2,6 t
0,9 t
H2 1t
syngas kerosene
RWGS FT synthesis
4,6 t byproducts
CO2 1t
6,3 t
1,7 MWh 6,3 MWh
Heat Heat
Low-carbon alternative: Defossilation of aviation is difficult; but, many different substitutes for
fossils can contribute: HEFA, bioethanol or butanol via alcohol-to-jet as well as CO2-based fuels.
Criteria KPIs
Process steps 3 (RWGS & FT crude synthesis & Upgrading)
TRL 6+9+9
168
Power-to fuel efficiency 49% for FT syncrude (65% electrolysis; 100% RWGS; 75% FT)
Production costs FT products: 1700 US$/t syncrude (±15%)

169
15.1.6 Technology Factsheet: CO2 to Diesel via RWGS & FT
Reaction equation:
1. RWGS CO2 + H2 -> CO + H2O -42 kJ/mol
2. FT CO + 2H2 -> (-CH2-) + H2O +160 kJ/mol
Total: CO2 + 3H2 -> (-CH2-) + 2 H2O +118 kJ/mol
Process description: CO2 and hydrogen are converted into syngas (CO/H2) through RWGS. The
syngas is synthesized to syncrude via Fischer Tropsch process and upgrade to fuels afterwards. For
details, see Factsheet “CO2 to Kerosene via RWGS & FT”.
H2O H2O
2,1 t 2,1 t
0,7 t
H2 1t
syngas diesel
RWGS FT synthesis
3,8 t byproducts
CO2 0,7 t
5,2 t
1,4 MWh/t 5,3 MWh/t
Heat Heat
Low-carbon alternative: Due to the difficulties of electrification or direct hydrogen use for aviation,
many different fuels are envisaged to replace fossil kerosene in the future, like HEFA, bioethanol or
butanol via alcohol-to-jet conversion and methanol-to jet fuels from CO2.
Criteria KPIs
Net water consumption 6,1 kg H2O/ kg diesel
CO2 5,2 kg CO2/ kg diesel
Process steps 3 (RWGS & FT crude synthesis & Upgrading)
TRL 6+9+9
Power-to fuel efficiency 49% (65% electrolysis; 100% RWGS; 75% FT);
Production costs FT crude: 1700 US$/t (±15%)

170
15.1.7 Technology Factsheet: CO2 to Diesel via Co-Electrolysis & FT
Reaction equation:
1. Co-electrolysis 2 CO2 +4 H2O -> 2 CO + 4 H2 + 3 O2 -260 kJ/mol

2. FT 2 CO + 4 H2 -> 2 (-CH2-) + 2 H2O +160 kJ/mol
Total: 2 CO2 + 2 H2O -> 2 (-CH2-) + 3 O2 -100 kJ/mol
Process description: CO2, hydrogen and electricity are converted into syngas (CO/H2) and oxygen
through co-electrolysis in a solid-oxide electrolyser (SOEC). The syngas ratio at the outlet depends
on the CO2/H2O conversion rate. SOECs operate between 650-1000 °C and enable higher efficiency
level than other electrolyser, 80% today and 90% (HHV) envisaged in the next years. The electrical
efficiencies could be even more increased (up to 95 %) if heat and thermal coupling to exothermal
processes like Fischer Tropsch. First demonstration plant is running, next upscaling to 0,1 and 1 MW
are currently ongoing. The syngas is synthesized to syncrude via Fischer Tropsch process and
upgrade to fuels afterwards. For details to FT synthesis, see Factsheet “CO2 to Kerosene via RWGS
& FT”.
O2 H2O
4,3 t 5,7 t 2,1 t

H2O 1t
syngas diesel
Co-
FT synthesis
electrolysis 3,8 t
CO2 byproducts
0,6 t
5,2 t
10,3 MWh 5,3 MWh
Power Heat
Low-carbon alternative: see Factsheet “CO2 to diesel via RWGS & FT”.
Criteria KPIs
Net water consumption 2,2 kg H2O/ kg diesel
CO2 5,2 kg CO2/ kg diesel
Heat surplus/waste heat Net electricity consumer and heat producer
Process steps 2 (Co-electrolysis is an upstream process like for PEM/AEL for other
factsheets; FT crude synthesis & Upgrading)
TRL 6+9+9
Power-to fuel efficiency 60% (80% electrolysis; 75% kerosene)
Higher H2 costs due to higher CAPEX for co-electrolysis
171
15.1.8 Technology Factsheet: CO2 to Kerosene via Co-Electrolysis & FT
Reaction equation:
1. Co-electrolysis 2 CO2 +4 H2O -> 2 CO + 4 H2 + 3 O2 -260 kJ/mol
2. FT 2 CO + 4 H2 -> 2 (-CH2-) + 2 H2O +160 kJ/mol
Total: 2 CO2 + 2 H2O -> 2 (-CH2-) + 3 O2 -100 kJ/mol
Process description: CO2 and hydrogen are converted into syngas (CO/H2) through co-electrolysis.
The syngas is synthesized to syncrude via Fischer Tropsch process and upgrade to fuels afterwards.
For details, see Factsheet “CO2 to diesel via Co-electrolysis & FT”.
O2 H2O
5,1 t 6,9 t 2,6 t

H2O 1t
syngas diesel
Co-
FT synthesis
electrolysis 4,6 t
CO2 byproducts
1t
6,3 t
10,3 MWh 6,3 MWh
Power Heat
Low-carbon alternative: see Factsheet “CO2 to Kerosene via RWGS & FT”.
Criteria KPIs
Heat surplus/waste heat Net electricity consumer and heat producer
Process steps 2 (Co-electrolysis is an upstream process like for PEM/AEL for other
factsheets; FT crude synthesis & Upgrading)
TRL 6+9+9
Power-to fuel efficiency 60% (80% electrolysis; 75% kerosene)

Higher H2 costs due to higher CAPEX for co-electrolysis
172
15.1.9 Technology Factsheet: Methanol
Criteria KPIs
GWP potential e-Methanol 300 g CO2eq/kg methanol; adapted from (Liebich, 2020)
GWP potential fossil Methanol 1900 g CO2eq/kg methanol; adapted from (Liebich, 2020)
Flash point 10°C
Self-ignition temperature 455°C
Explosion limits 6-44 vol-%
Water solubility Up to 100%
GHS classification Flammable Liquid class: 2
Acute Toxicity class: 3 (oral)
Acute Toxicity class: 3 (dermal)
Acute Toxicity class: 3 (respiratory)
STOT SE class: 1
Not classified as hazardous to water
Vapour pressure 0,00128 bar @20°C
combustion emissions No soot, no particles
Energy density 5,5 kWh/kg LHV (6,3 kWh/kg HHV)
H2 content 12,5 wt-%
173
15.1.10 Technology Factsheet: DME
Criteria KPIs
GWP potential e-DME 350 g CO2eq/kg DME; adapted from (Liebich, 2020)
GWP potential fossil DME 2600 g CO2eq/kg DME; adapted from (Liebich, 2020)
Flash point -42°C
Water solubility 70 g/l @20°C
GHS classification Flammable gases class: 1

Gases under pressure: liquified gases
Slightly hazardous to water
Vapour pressure 5,1 bar @20°C

combustion emissions No soot, no particles
Energy density 8,0 kWh/kg LHV (8,8kWh/kg HHV)
174
15.1.11 Technology Factsheet: Gasoline
Criteria KPIs
GWP potential e-Gasoline 400 g CO2eq/kg gasoline; adapted from (Liebich, 2020)
GWP potential fossil Methanol 3500 g CO2eq/kg gasoline; adapted from (Liebich, 2020)
Flash point -35°C
Water solubility Not available; neglectable
GHS classification Flammable Liquid class: 2
Skin irritation class: 2
STOT SE class: 3
Aspiration toxicity 1
Aquatic chronic 2
Hazardous to water
Vapour pressure Not available; very low
combustion emissions soot, particles
175
15.1.12 Technology Factsheet: Diesel
Criteria KPIs
GWP potential e-diesel 420 g CO2eq/kg diesel; adapted from (Liebich, 2020)
GWP potential fossil diesel 3800 g CO2eq/kg diesel; adapted from (Liebich, 2020)
Flash point >55°C
Self-ignition temperature Not applicable
GHS classification Flammable Liquid 3
Acute toxicity 4
Skin irritation 2
Carcinogenicity 2
STOT RE class: 2
Aquatic chronic 2
Hazardous to water
Vapour pressure 0,00004 bar@38°C
Combustion emissions soot, particles
H2 content 16 wt-%
176
15.1.13 Technology Factsheet: Kerosene
Criteria KPIs
GWP potential e-Kerosene 430 g CO2eq/kg kerosene; adapted from (Liebich, 2020)
GWP potential fossil Kerosene 3200 g CO2eq/kg kerosene; adapted from (Liebich, 2020)
Flash point 29°C
Self-ignition temperature >200°C
GHS classification Flammable Liquid 3
STOT SE 3
STOT RE 1
Aquatic chronic 2
Hazardous to water
Vapour pressure 0,005 bar@38°C
Combustion emissions soot, particles
H2 content 16 wt-%
177
15.2 Evaluation Matrix Excel File
The Evaluation Matrix, for Activity N°3 is included separately as an editable Excel File.
178
15.3 Block Flow Diagram of The Plant
179
15.4 Plot Plan of The Plant (general arrangement drawings included)
180
15.5 Piping and Instrument Diagram (DAC & Oxycombustion unit)
181
15.6 Piping and Instrument Diagram (Electrolysers)
182
15.7 Piping and Instrument Diagram (Methanol Unit)
183
15.8 Heat and Material Balance (part 1/2)
Condensate
Air inlet to Air oulet to NG to O2 to H2 from CO2 from DAC + MeOH H2O from
Courants steam from
DAC DAC Oxycombustion Oxycombution Ely Oxycombustion Product Methanol
Methanol
Temperature °C -2 to 12 -2 to 12 20 30 30 30 65,01 100,3 158,9

Pressure Bara 1,013 1,013 1,013 31 31 0,8 1,013 1,013 6
Vaporised fraction 1 1 1 1 1 1 0 0 1
Overall flow (mass) kg/h 735800 732890 1239 4300 543 3990 2715 1630 2300
Overall flow (mol) kmol/h 25513,2 25412,3 77,4 134,4 271,5 90,7 80,3 82,8 127,8
Mass fractions
Hydrogen 0 0 0 0,001 0,943 0 0 0 0
Carbon Dioxide 400 ppm 0 0,001 0 0 0,971 0,002 0 0
Methanol 0 0 0 0 0 0 0,995 0,002 0
Water 0 0 0 0,001 0,01 0 0,003 0,998 1
Oxygen 0,210 0,21 0 0,999 0,05 0,014 0 0 0
Nitrogene 0,790 0,79 0,019 0 0 0,016 0 0 0
Methane 0 0 0,886 0 0 0 0 0 0
Ethane 0 0 0,093 0 0 0 0 0 0
Propane 0 0 0,001 0 0 0 0 0 0
184
15.9 Heat and Material Balance (part 2/2)
Demi water Sea water to Sea water for

Courants Blowdown
to Ely Treatment cooling
Temperature °C 20 10 10 100
Pressure Bara 31 1,013 1,013 1,013
Vaporised fraction 0 0 0 0
Overall flow (mass) kg/h 5400 11000 1618000 490
Overall flow (mol) kmol/h 300 611,1 89889 27,2
Mass fractions
Hydrogen 0 0 0 0
Carbon Dioxide 0 0 0 0
Methanol 0 0 0 0
Water 1 1 1 1
Oxygen 0 0 0 0
Nitrogene 0 0 0 0
Methane 0 0 0 0
Ethane 0 0 0 0
Propane 0 0 0 0
185
15.10 Electrical One Line Diagram
186
15.11 Block Flow Diagram of demineralized water flux
187
15.12 Block Flow Diagram of steam flux
188
15.13 Block Flow Diagram of gas and oxygen flux
189
15.14 Wind Farm Projects assessed under the SEIA in Chile
Environmental Evaluation of Wind Farms in Chile

Source: EDF Andes based on SEIA and information of developers
SEIA: Environmental Service for Environmental Assessment; RCA: Environmental Resolution
Name of Wind Farm MW Region Type Owner Capex (MMU$) Capex MUS$/MW Date to SEIA Date RCA Months for RCA RCA
Cabo Negro 2,55 Magallanes DIA Pecket Energy 5,3 2,1 31-ago-2009 13-nov-2009 2,5 Res. 259/2009
Vientos Patagonicos 10,35 Magallanes DIA ENAP 24 2,3 18-ago-2016 21-mar-2017 7,2 Res. 029/2017
Caman 306,6 Los Ríos EIA Mainstream 590 1,9 08-05-2018 17-12-2020 31,8 Res. 65
Kosten Aike 36 Aysen DIA AQM 62 1,7 23-11-2020 09-07-2021 7,6 Res. 63
Entre Ríos 310,5 BioBio EIA Ar Coihue 497 1,6 05-06-2018 30-07-2021 38,4 Res. 207
Horizonte 980 Antofagasta EIA Colbun 700 0,7 07-02-2020 13-09-2021 19,5 Res. 118
Vientos del Loa 204,6 Antofagasta DIA Engie 246 1,2 20-08-2020 28-09-2021 13,5 Res.130
Eolico Cabrero 95,2 BioBio DIA Wind3 SpA 156 1,6 22-06-2020 18-10-2021 16,1 Res. 1543
Rarinco 198 BioBio DIA Verano 280 1,4 21-10-2020 12-10-2021 11,9 Res. 139
VillaAlegre2 16,8 Los Lagos DIA Windkraft 17 1,0 21-07-2020 28-10-2021 15,5 Res. 146
Lomas de Taltal 353,4 Antofagasta DIA Engie 424 1,2 21-12-2020 02-12-2021 11,5 Res. 113
Average DIA DIA 1,6 11

Average EIA EIA 1,4 30
Average Average 1,5 16
190
15.15 Desalinization Projects assessed under the SEIA in Chile
Environmental Evaluation of Desalination plants in Chile

Source: EDFAndes based on "Estudio Interconexión Hídrica: Oportunidades y Desafíos para Chile", Feb 2019. Consejo Minero, Queensland University, SMIICE Chile, Corfo
LPS: Liters per second; RCA: Environmental Resolution
Capex US$
Name of plant Company LPS million Type Date to SEIA Date RCA Months for RCA
Planta Desaladora de Agua de Mar Antofagasta 30 DIA 01-06-2001 27-09-2001 4
Suministro Complementario de Agua Desalinizada para Minera Escondida Escondida 3.500 EIA 05-09-2008 16-06-2009 9
Suministro Cerro Negro Norte y Desalinizadora Pta. Totoralillo 33 DIA 26-07-2010 28-02-2011 7
Planta Desalinizadora Minera Candelaria Candelaria 300-500 270 EIA 29-07-2010 24-06-2011 11
Abastecimiento de Agua Desalada Mantoverde Mantoverde 62 DIA 20-05-2010 13-05-2011 12
Planta Desaladora Sur Antofagasta Antofagasta 600 120 DIA 21-09-2011 07-09-2012 12
Actualización del Sistema de Conducción de Agua Desalinizada de Minera Escondida Escondida 290 DIA 02-05-2013 23-12-2013 8
Actualización y Ampliación Planta Desaladora La Chimba 10 DIA 05-08-2013 07-07-2014 11
Planta Desaladora Bahía Caldera 13 DIA 09-12-2013 13-07-2015 19
Planta Desaladora Tocopilla Aguas Antofagasta 200 26 DIA 18-02-2015 13-05-2016 15
Planta Desaladora de Pisagua Pisagua 3 DIA 23-12-2015 12-07-2017 19
Minerales Primarios Minera Spence Spence 2.500 EIA 27-07-2015 04-08-2017 25
Adecuación Planta Desaladora RT Sulfuros Radomiro Tomic Codelco 1956 1.000 DIA 23-08-2017 09-03-2018 7
Totals 2.756 7.856
Avg DIA DIA 11

Avg EIA EIA 15
Average All 12
191
15.16 Climatic Variables in Cabo Negro87
87
Sources: EDF Andes processing of monthly data in Station Punta Arenas Rural from Red Agrometereológica de Inia: https://agrometeorologia.cl/
Sea Temperature Info; https://seatemperature.info/november/strait-of-magellan-water-temperature.html
192
15.17 Permits associated with: Desalination Plant
Area Decree / Law Permit Type Details Institution Phase Source
Approval of drinking water or domestic sewage projects for
HSEC & Permits SD 735 Health Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
private individuals.
License to introduce or discharge materials, energy, or
SD 736 Environmental substances of any species into waters under national Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
jurisdiction.
DS 40, Art 115 Ambiental Environmental License for fishing research Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
License for the construction, repair, modification, and

SD 40, Art 119 Environmental expansion of any particular public works for the evacuation, Ministry of Environment Feasibility (GIZ & INODÚ, 2020)
treatment, or final disposal of industrial or mining waste.
Approval of drinking water or domestic sewage projects for
SD 40, Art 139 Environmental Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
private individuals.
HSEC & Permits
SD 40, Art 155 Environmental Permit for the construction of specific hydraulic works Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
SD 40, Art 156 Environmental Permit to make modifications to a watercourse Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
Permit to carry out regularization or defense works of natural
SD 40, Art 157 Environmental Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
watercourses
Article 140, Chilean Water General Directorate of
Permit Solicitud de aprovechamiento de aguas Preinvestment (DGA, 2018)
Code Water (DGA)
Article 10° Law 19.300, & SD
Environmental Submission to the SEIA SEIA Feasibility (GIZ & INODÚ, 2020)
40
Autorización de sistemas de tratamiento de residuos
DFL – 725 Health Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
industriales líquidos (riles)
International/Domestic
- - Design contracts Feasibility
private actors
- - Land rent Domestic private actors Preinvestment
Contractual
- - Procurement of infrastructure and components International private actors Construction
- - Construction agreements Construction
private actors
About the granting of a major maritime concession in order to
Subsecretariat for the armed (Undersecretary of Armed
SD-9, 2018 Permit obtain authorization to develop activities in sectors that are Preinvestment
forces (SSFFA) Forces, 2021)
Ownership over national assets of public use
the resources
Ley 458 Art 116 Plan
Permits Certificado de Uso de suelo Ministry of Agriculture Preinvestment (GIZ & INODÚ, 2020)
regulador Comunal.
Art 57° Law 1.977 Permits Concesión de uso oneroso de un inmueble fiscal Ministry of National Assets Preinvestment (ChileAtiende, 2021b)
193
15.18 Permits associated with: ERNC Production
Decree /
Area Permit Type Details Institution Phase Source
Law
DFL- 4 Permit Project under construction application Ministry of Economy Construction (GIZ & INODÚ, 2020)
DFL- 4 Permit Project commissioning declaration Ministry of Economy Construction (GIZ & INODÚ, 2020)
DFL- 4 Permit Request for declaration of projects in operation Ministry of Economy Construction (GIZ & INODÚ, 2020)
Communication of withdrawal, modification, and
DFL- 4 Permit Ministry of Economy Construction (GIZ & INODÚ, 2020)
disconnection
DFL- 4 Permit Declaration of electrical installation Ministry of Economy Construction (GIZ & INODÚ, 2020)
DFL- 4 Permit Application for provisional concession Ministry of Economy Construction (GIZ & INODÚ, 2020)
DGAC Permit Certificate of installation of power lines Ministerio de Defensa Construction (GIZ & INODÚ, 2020)
HSEC & Permits
Communities Public consultation (PAC) SEIA Feasibility (ChileAtiende, 2021a)
Communities Indigenous people consultation SEIA Feasibility (ChileAtiende, 2021a)

Article 10° (Ministry General
Law 19.300, Environmental Submission to the SEIA, by letter c SEIA Feasibility Secretariat of the
& SD 40 Presidency, 2021)
Registration as production, import, transport, storage,
Combustible Permit Ministry of Economy Preinvestment (GIZ & INODÚ, 2020)
distribution, mixing, and marketing of new fuel
Request for determination of a project as non-conventional
Generación Permit Ministry of Economy Construction (GIZ & INODÚ, 2020)
renewable generation.
(Punta Arenas
Decreto 327 Permit Non-buildable Zones and High Voltage Lines Ministry of Mining Construction
municipality, 2021)
Procurement of infrastructure and components International private actors Construction
Land rent Domestic private actors Preinvestment

Contractual
Design contracts International/Domestic private actors Feasibility
Construction agreements International/Domestic private actors Construction

Ley 458 Art
116 Plan
Permits Land Use Certificate Ministry of Agriculture Preinvestment (GIZ & INODÚ, 2020)
Ownership over regulador
the resources Comunal.
Art 57°
Permits Concession of onerous use of a fiscal real estate property Ministry of National Assets Preinvestment (ChileAtiende, 2021b)
Law 1.977
194
15.19 Permits associated with: G2H Production (1/2)
Chilean
Hydrogen tanks must be governed by the Chilean Standard on (GIZ & Centro de
Standard NCh Safety Ministry of Health Operation
"Gas Cylinders for Industrial Use Identification of content" Energía UC, 2020)
1377
Operating license for special nuclear facilities (sealed source
SD 133 Environmental Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
instruments)
Sanitary authorization for persons working in radioactive
SD 134 Environmental Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
facilities (sealed source instruments)
Sanitary authorization to import radioactive substances and/or
DFL 725 Environmental Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
equipment with radioactive sources (sealed source instruments).
Customs Destination Certificate (CDA) for radioactive substances
and equipment with sealed radioactive sources
Use authorization for radioactive substances and equipment
(sealed source instruments)
Disposition authorization for radioactive substances and
equipment (sealed source instruments)
HSEC and Permits Sanitary authorization for the manufacture of hazardous
DFL 725 Health Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
substances
DFL 726 Health Authorization of use and disposal for hazardous substances Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
SD 43 Health Sanitary authorization for storage of hazardous substances Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
SD 148 Safety Hazardous waste management plan approval Ministry of Health Operation (GIZ & INODÚ, 2020)
SD 148 Health Sanitary authorization of hazardous waste storage sites Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
SD 148 Health Approval of a hazardous waste disposal facility project. Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
Authorization of closure plan for hazardous waste disposal

SD 148 Safety Ministry of Health Operation (GIZ & INODÚ, 2020)
facility
Ministry of Labor and Social (GIZ & Centro de
Decreto 40/95 Safety Regulation on prevention of occupational hazards Operation
Security Energía UC, 2020)
195
15.20 Permits associated with: G2H Production (2/2)

Comparativo Permit Third Party Conformity Cerficate Ministry of Energy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Communication prior to the start of construction Ministry of Energy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Pre-commissioning declaration Ministry of Energy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Communication of change of operator Ministry of Energy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Report on the end of operation Ministry of Energy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Gas installation declaration Ministry of Energy Construction (GIZ & INODÚ, 2020)
- Communities Public consultation (PAC) SEIA Feasibility (ChileAtiende, 2021a)
HSEC and Permits
- Communities Indigenous people consultation SEIA Feasibility (ChileAtiende, 2021a)
(Ministry General
Article 10° Law
Environmental Submission to the SEIA, by letter k & ñ SEIA Feasibility Secretariat of the
19.300, & SD 40
Presidency, 2021)
Regulations on basic sanitary and environmental conditions in the

SD 594/2018 Health Ministry of Health Operation (GIZ & INODÚ, 2020)
workplace
International/Domestic FeasibilityFeasi
- - Design contractsDesign contracts
private actors bility
Contractual - - Land rent Domestic private actors Preinvestment

- - Procurement of infrastructure and components International private actors Construction
private actors
Ley 458 Art 116 Plan

Permits Land Use Certificate Ministry of Agriculture Preinvestment (GIZ & INODÚ, 2020)
Ownership over regulador Comunal.
the resources
(ChileAtiende, 2021b)
Art 57° Law 1.977 Permits Concession of onerous use of a fiscal real estate property Ministry of National Assets Preinvestment
(ChileAtiende, 2021b)
196
15.21 Permits associated with: Methanol Production (1/2)

Permit to hunt or capture protected animals specimens. For research
SD 40 Art 146 Environmental purposes, the establishment of breeding centers or hatcheries, and the Ministry of Environment Feasibility (GIZ & INODÚ, 2020)
sustainable use of the resource.
SD 40 Art 148 Environmental Permit to cut down native forest Ministry of Environment Feasibility (GIZ & INODÚ, 2020)
Permit to cut down plantations on lands of preferential forestry

SD 40 Art 149 Environmental Ministry of Environment Feasibility (GIZ & INODÚ, 2020)
aptitude
Permit for the cutting, destruction, or clearing of xerophytic

formations
Permit to subdivide and develop rural land or for construction outside
the urban limits
SD 40 Art 161 Environmental Qualification of industrial and warehousing facilities Ministry of Environment Feasibility (GIZ & INODÚ, 2020)
Article 10° Law (ChileAtiende, 2021b)
Environmental Submission to the SEIA, by letter b, c, f, j, k & ñ SEIA Feasibility
19.300, & SD 40 (ChileAtiende, 2021b)
- Communities Public consultation (PAC) SEIA Feasibility (ChileAtiende, 2021a)
- Communities Indigenous people consultation SEIA Feasibility (ChileAtiende, 2021a)
HSEC & Permits
Permit for the construction, repair, modification and expansion of any
SD 40 Art 138 Environmental public or private work for the evacuation, treatment or final disposal Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
of sewage, sewage of any nature.
Permit for the construction, repair, modification and expansion of any

garbage and waste treatment plant of any kind or for the installation
SD 40 Art 140 Environmental Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
of any place destined for the accumulation, selection, industrialization,
commerce or final disposal of garbage and waste of any kind.
SD 40 Art 144 Environmental Hazardous waste disposal facilities permit Ministry of Environment Preinvestment (GIZ & INODÚ, 2020)
Consult the indigenous peoples affected, through appropriate
procedures and in particular through their representative institutions, Continuous dialogue
Agreement 169 Communities whenever legislative or administrative measures that may directly OIT/MOP throughout the (MOP, 2016)
affect them are envisaged. Must be done in early stages, pre-feasibility project process
and feasibility.
Permit to locate land facilities for the reception of oily mixtures in the
S.D 40, article 115 Permits Ministry of Environment Feasibility (SEA, 2012)
ports and terminals of the country
Permission to introduce, or discharge harmful or dangerous materials,
S.D 40, article 112 Permits energy, or substances of any kind into the waters subject to national Ministry of Environment Feasibility (SEA, 2012)
jurisdiction
197
15.22 Permits associated with: Methanol Production (2/2)

SD 40 Art EnvironmentalEnvir Permission to make archaeological, anthropological, and FeasibilityFeasib
Ministry of Environment (GIZ & INODÚ, 2020)
132132 onmental paleontological excavationsexcavations ility
Customs Destination Certificate (CDA) for radioactive substances and
DFL 725 Safety Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
equipment with sealed radioactive sources
Use authorization for radioactive substances and equipment (sealed
source instruments)
Disposition authorization for radioactive substances and equipment
(sealed source instruments)
DFL 725 Health Sanitary authorization for the manufacture of hazardous substances Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
DFL 725 Safety Use and disposal authorization for imported hazardous chemicals. Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
SD 40 Art EnvironmentalEnvir PreinvestmentPr
Permit for any site intended for the storage of hazardous waste Ministry of Environment (GIZ & INODÚ, 2020)
142142 onmental einvestment
ComparativoCo Registration as production, importation, transportation, storage, PreinvestmentPr
SafetySafety Ministry of EconomyEconomy (GIZ & INODÚ, 2020)
mparativo distribution, blending, and commercialization of new fuels. einvestment
SD 2385 Permits Commercial and industrial patents Ministry of Housing and Urbanism Preinvestment (GIZ & INODÚ, 2020)
HSEC & Sanitary authorization to import radioactive substances and/or PreinvestmentPr
Permits DFL 725725 HealthHealth Ministry of HealthHealth (GIZ & INODÚ, 2020)
equipment with radioactive sources (sealed source instruments). einvestment
SD 47 Permits Pre-commissioning declarationdeclaration Ministry of Housing and Urbanism Construction (GIZ & INODÚ, 2020)
SD 47 Permits Change of destination authorizationauthorization Ministry of Housing and Urbanism Construction (GIZ & INODÚ, 2020)
SD 47 Permits Preliminary project approvalapproval Ministry of Housing and Urbanism Construction (GIZ & INODÚ, 2020)
SD 47 Permits Preliminary works permit Ministry of Housing and Urbanism Construction (GIZ & INODÚ, 2020)
SD 47 Permits Building permitpermit Ministry of Housing and Urbanism Construction (GIZ & INODÚ, 2020)
SD 47 Permits Project modificationmodification Ministry of Housing and Urbanism Construction (GIZ & INODÚ, 2020)
Ministry of Housing and ConstructionCon

SD 4747 PermitsPermits Final acceptance of worksFinal acceptance of works (GIZ & INODÚ, 2020)
UrbanismUrbanism struction
Sanitary report for the installation, expansion or transfer of industries ConstructionCon
DFL 725725 HealthHealth Ministry of HealthHealth (GIZ & INODÚ, 2020)
and workshops. struction
OperationOperat
SD 148148 SafetySafety Hazardous waste management plan approvalapproval Ministry of HealthHealth (GIZ & INODÚ, 2020)
ion
198
15.23 Permits associated with: Transport and Storage
Authorization of access to a public road and/or
DFL 850 Permit Ministry of Public Works Feasibility (GIZ & INODÚ, 2020)
concessioned road.
Regulations for the transport of hazardous cargo on
Decreto streets and roads provide administrative and general (GIZ & Ministry of
Permit Preinvestment
298/2002 provisions for the transport of hazardous substances Energy, 2020)
on public roads and streets.
Industrial and warehousing establishments must
comply with all applicable provisions established in Secretaria Regional Ministerial de
SD 47 Permit Preinvestment (GIZ & INODÚ, 2020)
the general ordinance of the general urban planning Salud
and construction law.
HSEC & Permits
Decreto Sanitary authorization of hazardous waste storage
Health Ministry of Health Preinvestment (GIZ & INODÚ, 2020)
43/2016 sites
Comparativo Permit Provisional concession request Ministry of Economy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Application for definitive concession Ministry of Economy Construction (GIZ & INODÚ, 2020)
Comparativo Permit Maintenance of as-built DOM information Ministry of Economy Construction (GIZ & INODÚ, 2020)
Permit for pavement breakage and replacement of
Law 8,946 Permit Ministerio de Obras Públicas Construction (GIZ & INODÚ, 2020)
pavement
International/Domestic private
- - Design contractsDesign contracts FeasibilityFeasibility
actors
- - Land rent Domestic private actors Preinvestment
Contractual Procurement of infrastructure and
- - International private actors ConstructionConstruction
componentscomponents
International/Domestic private
actors
Art 57° Law Concession of onerous use of a fiscal real estate (ChileAtiende,
Permits Ministry of National AssetsAssets PreinvestmentPreinvestment
1.977977 propertyproperty 2021b)
Ownership over
the resources Ministerio de
DS 458458 Land Use CertificateLand Use Certificate ConstructionConstruction (GIZ & INODÚ, 2020)
AgriculturaAgricultura
199
15.24 Permits associated with: Fuel loading for export
Decree / Permit
Area Details Institution Phase Source
Law Type
Permit for dumping in waters under national
S.D 40,
Permits jurisdiction from ships, aircraft, naval devices, Ministry of enviroment Feasibility (SEA, 2012)
article 111
constructions, and port works
HSEC & Permits
Permit for installing a maritime terminal and
S.D 40,
Permits conductive pipes for the transport of polluting Ministry of enviroment Feasibility (SEA, 2012)
article 114
substances or that are susceptible to polluting
200
15.25 Interviews summary
Date Stakeholder Name of Company Description Interview reason Main ideas from the interview
interviewee
27/01/2022 BP José Luis BP is an integrated BP is one of the major The main topics discussed were BP's
Arango & energy company, O&G companies that goals to become an integrated
Julio primarily focused on oil has invested in energy company in line with its low
Marañón and natural gas, with renewables projects in carbon goals for 2025-2030. Today
locations in Europe, Asia, the long term. And to they are part of some renewable
North and South date, in line with its hydrogen projects such as Net-Zero
America, Australia, and low carbon goals is Teesside in the North of England,
Africa (bp, 2022). investing in hydrogen Castellón refinery in Spain and
projects. others.
21/01/2022 Enex Juan The company offers It is one of the main In the interview with Enex, points
Larroulet, products and services for distributors of fuels such as their prospects for the
Pablo the operation of its and lubricants in the development of the synthetic fuels
Caulier vehicles and equipment, country, local market, sustainable company goals
as well as support to representative of Shell and interest in the developments of
companies in the brand. local green hydrogen projects were
industrial sector in the discussed.
administration, safety,
management and
control of their needs in
the areas of fuels,
lubricants, asphalts and
chemicals (Enex, 2019).
28/01/2022 Methanex Alejandro One of the most It is the largest In the interview with Methanex,
Larrive, Boris important producer and producer and supplier company's goals, logistics, and
Vukasovic, supplier of methanol for of methanol in the market penetration were discussed.
Eduardo major international world (Methanex, In addition, the barriers and
Orlandini markets in North 2020). With a facility opportunities for e-methanol were
America, Asia Pacific, located at Magallanes analyzed in terms of regulation,
Europe and South Region, Methanex is adaptation of its current facilities
America (Methanex, the larger methanol and comparison of the current cost
2020). producer in Chile, of gray methanol versus green
which allows them to methanol.
combine the domestic Methanex has introduced methanol
and international in its tankers (10 of its 24 units), has
knowledge of this fuel. a green methanol plant in Iceland
and has a carbon capture project in
USA. Green methanol is not cost
competitive with fossil methanol in
the short term. Security is the main
issue considered for any modification
of its infrastructures (for a possible
synergy with a third-party e-
methanol plant).
18/01/2022 Copec Alexander It is a company It is the company with The interview with COPEC was based
Worner dedicated to the the most extensive on its interest in the methanol/e-
commercialization and network of service methanol market, the barriers, and
distribution of fuels and stations in Chile, opportunities for developing this
lubricants in Chile, and serving more than half
201
interviewee
with presence in a million people every market at the domestic and
Panama, Colombia, Perú, day (Copec, 2019). international levels.
Argentina, Uruguay With growing interest
(Copec, 2019). in green projects,
investing to date in the
assessment of green
hydrogen projects.
26/01/2022 Airbus Clement A company dedicated to Europe's largest In the interview with Airbus,
Dartigues, the design, manufacture, aeronautics and space opportunities, and barriers of
Tony Derrien and supply of aerospace company and a world synthetic fuels for aviation were
Christelle, products, services, and leader, it is at the raised.
Monteillet solutions to customers forefront of the Some of the topics covered were
Steven Le around the world aviation industry today’s high cost of green fuels, the
Moing, (Airbus, 2022). (Airbus, 2022). projected future demand and
Jean- Airbus plans to develop competition within the market.
Christophe zero emission
Hoguet, commercial aircraft by
Frederique 2035, powered by
Rigal liquid hydrogen
combustion through
modified gas turbine
engines; hydrogen fuel
cells create electrical
power that
complements the gas
turbine.
21/01/2022 ENAP Juris Agüero Company engaged in the Enap operates in the The interview with Enap was based
exploration, production, Magallanes region on its experience in synthetic fuel
refining, and marketing since the late 1950s. It projects in the country, commenting
of hydrocarbons and owns 3,000 km of oil on the barriers and the opportunities
their derivatives (ENAP, and gas pipelines. for the development of green
n.d.a). It operates Gregorio methanol projects as well as on
Refinery since 1980. concessions and required studies.
There are 1098
workers in ENAP
Magallanes.
12/01/2022 Universidad Humberto It is a public university It is the only university In the interview with the University
de Magallanes Vidal that prepares future located in the area of Magallanes, the role of the
professionals, develops where the study is academy in the development of
research works and being conducted. green projects such as synthetic fuel
outreach activities aimed was discussed.
at the development of Addressing the gaps in today existing
the southernmost region workspace, the need for R&D, and
of Chile (University of what demand is being generated at
Magallanes, n.d). the domestic level.
12/01/2022 Universidad Claudio It is a private institution Although it has no In the interview with the University
Austral Troncoso based in Valdivia which facilities in the of Magallanes, the role of the
offers both Magallanes region, it academy in the development of
undergraduate and does have them in the
202
interviewee
graduate programs. It surrounding areas, so green projects such as synthetic fuel
also has an area they provide a was discussed.
dedicated to research, different perspective. Addressing the gaps in today existing
development, and workspace, the need for R&D, and
creation (Austral what demand is being generated at
University of Chile, n.d). the domestic level.
18/01/2022 Sowitec Thomas It is a company It is one of the world's Sowitec goals in decarbonization
Schulthess dedicated to developing largest developers of projects were discussed in the
& Tabaré renewable energy renewable energy interview. In addition, the regulatory
Pagliano projects around the projects (Sowitec, barriers in Chile were covered, and
world, especially solar 2022). their perspective for the
and wind energy development of synthetic fuels
(Sowitec, 2022). projects.
28/12/2021 Siemens Marcelo Technology vendor, It is one of the leading The interview with Siemens focused
Merli which operates in the distributors of on the demand for electrolysers, and
industrial, energy, health electrolysers, and the company's production capacity.
and infrastructure green technology in
sectors (Siemens, 2022). the world.
04/01/2022 Axens Sebastien Le It is a company It is recognized as a In the interview with Axens, their
Carpentier, dedicated to providing leading provider of role and vision in the development of
Bruno technologies, products, refining technologies, synthetic fuel projects was discussed,
Domergue services, and equipment. services, and detailing the cost barriers such as
& Jordi It is currently active in 5 equipment (Axens, DAC and green methanol.
Pinent markets: oil refining, 2022).
gases, water,
renewables, and
petrochemicals (Axens,
2022).
17/01/2022 Wärtsilä Alejandro Wärtsilä focusses in Is the global leader in The interview with Wartsila allowed
Mcdonought providing innovation of innovative us to understand the goals towards
sustainable technology technologies and life the decarbonization of the maritime
and services for the cycle solutions for the sector at a national and international
marine and energy marine and energy level and its perspective as a
markets (Wärtilsä, markets (Wärtilsä, company in the incorporation of
2022). 2022). synthetic fuels such as green
methanol.
19/01/2022 Hapag-Lloyd Juan Carlos It is a shipping company It is one of the world's In the interview with Hapag-Lloyd,
Duk dedicated to the leading shipping their position on synthetic fuels, net-
maritime transportation companies (Hapag- zero goals to 2045, how they see the
of technology, Lloyd, n.d). evaluation of the maritime sector
medicines, trains, among towards decarbonization, and what
others (Hapag-Lloyd, alternative fuels they are considering
n.d). incorporating were discussed.
04/02/2022 Ministry of María de los The Hidrocarbon Unit of The interview was The experience in blending methanol
Energy, Ángeles the Ministry is conducted to with gasoline in Chile was discussed,
Hidrocarbon Valenzuela, responsible for the understand the current and the current feasibility of this
Unit Karla Chace, issuance of rules and regulations covering solution for the methanol market. In
new regulations for synthetic fuels in Chile addition, the pertinent decrees that
203
interviewee
& Álvaro hydrogen, in and the expectations must be modified or updated to
Ruiz coordination with SEC on this subject. cover synthetic fuels and encourage
(Superintendency or the blending market were
Electricity and Fuels) commented.
03/03/2022 Maersk Maria Maersk is an integrated It is one of the world's The interview remarked on the
Strandesen container logistics leading shipping reasons for Maersk to select
company operating in companies, which is methanol as the appropriate fuel to
130 countries. Its currently developing a develop a more sustainable fleet, its
mission is to digitize and fleet powered by comparative advantages, and the
decarbonize the world’s methanol (MAERKS, requirements that the provider must
supply chains to enable 2021) meet so that the shipping sector is
sustainable trade for a willing to buy green e-methanol in
growing world Chile (considering a green premium).
204
15.26 Estimated jobs for different desalination plants
Name Desalination Plant L/s Type Construction Operational Construction Operation

period period average average
(average # of (average # of (worker/L/s) (worker/L/s)
workers) workers)
1 Minera Santo Domingo 615 DIA 180 18 0.293 0.0293
2 Planta Desalinizadora Guacolda 800 DIA 319 25 0.399 0.0313
etapa 1
3 Planta Desalinizadora Guacolda 1400 DIA 167 25 0.120 0.018
etapa 2
4 Planta Desalinizadora Cerro 2000 EIA 991 80 0.496 0.04
Blanco
5 Planta desalinizadora y 1600 EIA 1380 26 0.863 0.017
suministro de agua industrial
6 Planta Desalinizadora de agua 158.33 DIA 35 15 0.221 0.095
de mar, Central Termoeléctrica
Angamos
7 Planta Desalinizadora de Agua 1200 EIA 210 15 0.175 0.013
de Mar para la Región de
Atacama, Provincias de
Copiapó y Chañaral
8 Planta Desalinizadora Minera 300 EIA 730 20 2.433 0.067
Candelaria
9 Ampliatio Planta Aguas 634 - 250 10 0.394 0.016
Antofagasta
10 Desaladora Tocopilla 200 - 150 40 0.75 0.2
11 Caitán SpA 1000 - 290 26 0.29 0.026
12 Planta Desalinizadora Hornitos 4.34 DIA 7 1 1.613 0.230
13 Planta Desalinizadora Piloto 2.8 DIA 10 3 3.572 1.071
Minera Escondida Limitada
14 Instalación Planta 4.34 DIA 10 1 2.304 0.230
Desalinizadora Moly- Cop Chile
S.A.
Source: (SEA, n.d)
205
15.27 Estimated jobs for different wind farms
Name of Wind MW Type Construction period Operational period Construction Operation

Farm (average # of workers) (average # of workers) (worker/MW) (worker/MW)
1 Horizon 980 EIA 600 50 0.61 0.051
2 Antofagasta 793.6 EIA 150 45 0.18 0.056
Wind
3 La Punta 364 EIA 225 15 0.61 0.041
4 Lomas de 353.4 DIA 316 10 0.89 0.028
Taltal
5 Entre Rios 310.5 EIA 300 26 0.96 0.083
6 Caman 306.6 EIA 441 20 1.43 0.065
7 Nolana 280 DIA 268 10 0.95 0.035
8 Ovejera South 252 EIA 300 10 1.19 0.039
9 Winds of the 204.6 DIA 150 8 0.73 0.039
Loa
10 Rarinco 198 DIA 84 6 0.42 0.03
11 Morros Wind 192 DIA 190 12 0.98 0.062
Farm
12 Atacama Wind 180 EIA 50 9 0.27 0.05
13 Loma Verde 173.6 EIA 200 10 1.15 0.057
14 Newen Kuruf 168 EIA 80 6 0.47 0.035
15 San Matías 140 DIA 160 10 1.14 0.071
16 San Andres 130.2 DIA 223 10 1.71 0.076
17 Litueche 107 DIA 183 5 1.71 0.046
18 Cabrero Wind 95.2 DIA 136 6 1.42 0.063
Farm
19 Cerro Piedra 63 EIA 106 10 1.68 0.158
20 El Alba 43.2 DIA 120 15 2.77 0.347
21 Kosten Aike 36 DIA 100 8 2.77 0.222
22 The Luma 18 DIA 32 7 1.77 0.388
23 VillaAlegre2 16.8 DIA 30 1.78
24 The German 2 13.5 DIA 24 5 1.77 0.37
25 Patagonian 10.35 DIA 50 2 4.83 0.193
Winds
26 Cabo Negro 2.55 DIA 50 4 19.6 1.568
Source: (SEA, n.d)
206
15.28 Business Model -Sensitivity analysis results
• DR : 5%
LCOCO2 = 100 usd/t
Variable selling price from 1800 usd/t to 2500 usd/t
LCOM USD/t 1 775,90
Discount rate % 5%
NPV MUSD 84,0
IRR % 8,7%
Payback 2039
Cash flow
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
207
Discount rate % 5%
NPV MUSD 101,9
IRR % 9,3%
Payback 2038
Cash flow
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
208
Discount rate % 5%
NPV MUSD 119,8
IRR % 10,0%
Payback 2037
Cash flow
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
209
Discount rate % 5%
NPV MUSD 137,8
IRR % 10,6%
Payback 2036
Cash flow
200,0
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
210
Discount rate % 5%
NPV MUSD 155,7
IRR % 11,2%
Payback 2036
Cash flow
200,0
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
211
Discount rate % 5%
NPV MUSD 173,6
IRR % 11,8%
Payback 2035
Cash flow
200,0
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
212
Discount rate % 5%
NPV MUSD 191,5
IRR % 12,4%
Payback 2035
Cash flow
250,0
200,0
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
213
Discount rate % 5%
NPV MUSD 209,5
IRR % 13,0%
Payback 2034
Cash flow
250,0
200,0
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
• DR : 8%
LCOCO2 = 100 usd/t
Variable selling price from 2200 usd/t to 2500 usd/t
LCOM USD/t 2 157,87
214
Discount rate % 8%
NPV MUSD 57,9
IRR % 11,2%
Payback 2039
Cash flow
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
215
Discount rate % 8%
NPV MUSD 70,3
IRR % 11,8%
Payback 2038
Cash flow
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
216
Discount rate % 8%
NPV MUSD 82,7
IRR % 12,4%
Payback 2037
Cash flow
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
217
Discount rate % 8%
NPV MUSD 95,0
IRR % 13,0%
Payback 2036
Cash flow
150,0
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
- 250,0
218
• DR : 10%
LCOCO2 = 100 usd/t
Selling price : 2500 usd/t
LCOM USD/t 2 438,00

Discount rate % 10%
NPV MUSD 46,2
IRR % 13,0%
Payback 2039
Cash flow
100,0
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
219
• DR : 12%
LCOCO2 = 100 usd/t
Selling price : 2800 usd/t
LCOM USD/t 2 735,21

Discount rate % 12%
NPV MUSD 35,5
IRR % 14,6%
Payback 2039
Cash flow
50,0
0,0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
- 50,0
- 100,0
- 150,0
- 200,0
220
15.29 Assistants to Final Workshop
N° Surname Name Institution Position

1 Lizana Macarena AES Chile
2 Bezler Philipp AME Head of Project Development
Asesorias
3 Barría Pedro Gerente
Enersur Ltda
Asociación de H2
4 Kulenkampff Hans Presidente
Chile
5 Domergue Bruno Axens LOHC Project Leader
6 Pinent Jordi Axens Business Development Manager
7 Arango José Luis BP Andean Region Head of Countries – RC&S
8 Garcés Cristóbal Colbún Especialista senior innovacion
9 Cruz Pablo Consultor
10 Fuentealba Jaime COPEC Jefe de Ingeniería
11 Labbe Francisco COPEC Gerente de Negocio Industrial
12 Worner Alexander Copec Hydrogen Business Developer
13 Mohr Andrea CORFO Subgerente de Programas y Desarrollo Estratégico
14 Alcázar Gabriela EDF
15 Barros Maximiliano EDF
16 Bueno Thomas EDF Gerente de Desarrollo
17 Dezaunay Gregory EDF
18 Garzon Alan EDF
19 Herrera Natalia EDF Gerente Comercial y Nuevos Negocios
20 Leiva Gonzalo EDF
21 Peralta Francisco EDF Gerente de Asuntos Corporativos
22 Martínez Pablo Enap Gerente ENAP E&P Magallanes
23 Olivos Ninette Enap Jefe de proyectos de Innovación
24 Bozzolo Andrea Enex Subgerente Desarrollo y Estudios
25 Caulier Pablo Enex Subgerente Nuevas Energías
26 Jutronich Juan José Enex Gerente Ventas Industriales
27 Larroulet Juan Luis Enex Jefe de Nueva Movilidad y Nuevas Energías
28 Barrera Felipe GHD Ingeniero de Control de Proyectos
29 Fuster Jose GIZ Asesor Técnico
30 Tello Pablo GIZ Asesor Técnico
31 Vasquez Rodrigo GIZ Asesor Senior Programa Energía
32 Navajas María José Gore Magallanes Profesional Fomento
33 Ojeda Walter Gore Magallanes profesional de la DIFOIN
34 Pedinian Aram HIF Commercial Manager
35 Bobenrieth Jorge IDB -
36 Marzolf Natacha IDB Principal
221
N° Surname Name Institution Position
37 Nakagawa Yumin IDB Secondee-INE/ENE
38 Laroche Catherine Ifpen Project leader
39 Alamos Tomás ImplementaSur
40 Hurtado Diego Methanex
41 Larrive Alejandro Methanex Gerente General
42 Orlandini Eduardo Methanex Director de Finanzas
Ministerio de
43 Áviles Camilo Jefe Unidad Nuevos Energéticos
Energía
Ministerio de
44 Baeriswyl Adelaida
Energía
Ministerio de
45 Bernardelli Federico
Energía
Ministerio de
46 Burgos Juan Carlos
Energía
Ministerio de
47 Chace Karla Analista Hidrocarburos
Energía
Ministerio de
48 Correa Max Jefe División Combustibles y Nuevos Energéticos
Energía
Ministerio de
49 Puga Verónica Profesional
Energía
Ministerio de
50 Ruíz Álvaro Profesional DCNE
Energía
Ministerio de
51 Stegmaier Fernanda Profesional UNE
Energía
Ministerio de
52 Verástegui Felipe Analista Políticas Públicas y Sostenibilidad
Energía
53 Merli Marcelo Siemens Area Sales Director
54 Domínguez Santiago Sowitec MD SOWITEC Argentina
55 Emck Paul Sowitec Asset Manager
56 Fernández Matías Sowitec Project Manager
57 Pagliano Tabaré Sowitec New Techs Analyst
58 Mosser Claire Total Eren Project developer
Universidad
59 Reyes Lorenzo Decano Facultad de Ingeniería
Autónoma
Universidad
60 Sandoval Claudia Secretaria Académica Faculta de Ingeniería
Autónoma
Universidad
61 Lillo Patricio Académico
Católica
Universidad de
62 Ríos Sergio Académico
Magallanes
Universidad de
63 Vidal Humberto Director CERE
Magallanes
64 Estevez Roberto WBG Especialista de Energia
65 Lopez Silvia World Bank
222
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BP. (22nd de July de 2019). Going big in biofuels. Obtenido de
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Copec. (2019). Quiénes somos. Obtenido de Copec: https://ww2.copec.cl/nuestra-empresa
CORDIS. (2020). FAST Track to Clean and Carbon-Neutral WATERborne Transport through Gradual
Introduction of Methanol Fuel: Developing and Demonstrating an Evolutionary Pathway for
Methanol Technology and Take-up. Obtenido de
https://cordis.europa.eu/project/id/860251
Corfo. (27 de 12 de 2021). Corfo adjudica propuestas de Hidrógeno Verde que atraerán inversiones
por 1.000 millones de dólares. Obtenido de
https://www.corfo.cl/sites/Satellite?c=C_NoticiaNacional&cid=1476730772854&d=Touch
&pagename=CorfoPortalPublico%2FC_NoticiaNacional%2FcorfoDetalleNoticiaNacionalWe
b
Dansk Energi. (November de 2020). Recommendations for a Danish Power-to-X strategy. Obtenido
de https://www.danskenergi.dk/sites/danskenergi.dk/files/media/dokumenter/2021-
03/Recommendations-for-a-Danish-Power-to-X-strategy.pdf
Deloitte. (28th de July de 2020). Electric vehicles: Setting a course for 2030. Obtenido de
https://www2.deloitte.com/us/en/insights/focus/future-of-mobility/electric-vehicle-
trends-2030.html
Department for Transport. (2019). RTFO Guidance Part One Process Guidance. UK. Obtenido de
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachmen
t_data/file/952228/rtfo-guidance-part-1-process-guidance-2021.pdf
DGA. (2018). GUIA PARA LA PRESENTACION DE SOLICITUDES DE DERECHOS DE APROVECHAMIENTO

DE AGUAS SUBTERRANEAS.
Diario Constitucional. (2 de July de 2021). Ingresan proyecto de ley para regular la construcción de
parques eólicos. Obtenido de Diario Constitucional:
https://www.diarioconstitucional.cl/2021/07/02/ingresan-proyecto-de-ley-para-regular-
la-construccion-de-parques-eolicos/
DIRECTEMAR. (2015). Directrices para la evaluación ambiental de proyectos industriales de

desalación en jurisdicción de la Autoridad Marítima. . Chile: DIRECTEMAR. Obtenido de
https://www.directemar.cl/directemar/site/docs/20170125/20170125122344/directrices
_desaladoras.pdf
DTI. (2019). Methanol as motor fuel. Danish Technological Institute.
EASA. (2019). European Aviation Environmental Report 2019. Obtenido de

https://www.easa.europa.eu/eaer/
Electricidad. (2020). Enel Green Power Chile destaca experiencia de planta hídrida solar-hidrógeno
para futuros proyectos. Obtenido de https://www.revistaei.cl/2020/10/13/enel-green-
225
power-chile-destaca-experiencia-de-planta-hidrida-solar-hidrogeno-para-futuros-
proyectos/?
utm_source=Newsletter+Grupo+Editorial+EDITEC&utm_campaign=1e7a70cef9-
EMAIL_CAMPAIGN_2020_10_14_10_34&utm_medium=emai
Electricidad. (20 de November de 2020a). Obtenido de Proyecto de hidrógeno verde para

desarrollarse en Punta Arenas ingresó a tramitación ambiental:
https://www.revistaei.cl/2020/11/20/proyecto-de-hidrogeno-verde-para-desarrollarse-
en-punta-arenas-ingreso-a-tramitacion-
ambiental/?utm_source=Newsletter+Grupo+Editorial+EDITEC&utm_campaign=703306dc6
e-EMAIL_CAMPAIGN_2020_11_23_10_32&utm_medium=email&utm_t
Electricidad. (2nd de December de 2020b). Obtenido de Hidrógeno verde: HIF recibe financiamiento
del gobierno alemán para proyecto piloto de eCombustibles en Magallanes:
https://www.revistaei.cl/2020/12/02/hidrogeno-verde-hif-recibe-apoyo-financiero-del-
gobierno-aleman-para-proyecto-piloto-de-ecombustibles-en-
magallanes/?utm_source=Newsletter+Grupo+Editorial+EDITEC&utm_campaign=5191e44
e9f-EMAIL_CAMPAIGN_2020_12_03_11_00&u
ELECTRICIDAD. (30 de Julio de 2021). Hidrógeno verde: HIF y Universidad de Magallanes

desarrollarán estudios en conjunto. Obtenido de Electricidad: La revista energética de Chile:
https://www.revistaei.cl/2021/07/30/hidrogeno-verde-hif-y-universidad-de-magallanes-
desarrollaran-estudios-en-conjunto/
Enaex. (2017). Gestión de comunidades. Obtenido de Memoria Enaex:

http://memoria.enaex.com/gestion-de-comunidades/
ENAP. (n.d.a). Descripción. Obtenido de ENAP: https://www.enap.cl/pag/509/1572/descripcion
Energía Estratégica. (3rd de November de 2021). Con 60 proyectos Chile apuesta a exportar más
hidrógeno que cobre. Obtenido de https://www.energiaestrategica.com/con-60-proyectos-
chile-apuesta-a-exportar-mas-hidrogeno-que-cobre/
Enex. (2019). Nuestra Empresa. Obtenido de Enex: https://www.enex.cl/nuestra-empresa/
Environmental Assessment Service. (n.d). Información línea de base de EIA. Obtenido de SEA:
https://www.sea.gob.cl/evaluacion-ambiental/informacion-linea-base-eia
ExxonMobil. (2019). Outlook for energy: a perspective to 2040. Recuperado el 11 de 2021, de

https://corporate.exxonmobil.com/-/media/Global/Files/outlook-for-energy/2019-
Outlook-for-Energy_v4.pdf
Exxonmobil. (2021). Carbon capture and storage. Obtenido de

https://corporate.exxonmobil.com/Climate-solutions/Carbon-capture-and-storage
Exxonmobil. (23 de April de 2021a). Developing and deploying scalable technology solutions.
Obtenido de https://corporate.exxonmobil.com/Sustainability/Energy-and-Carbon-
Summary/Strategy/Developing-and-deploying-scalable-technology-
solutions#Carboncaptureandstorage
226
Fasihi, E. B. (July de 2019). Techno-economic assessment of CO2 direct air capture plants. Journal of
Cleaner Production, 957-980.
Faúndez, A., Peyrín, C., & Weinstein, M. (2013). G U Í A Sistema de Gestión de Igualdad de Género y
Conciliación de la Vida Laboral, Familiar y Personal en las Organizaciones. Santiago.
FCBI Energy & Methanol Institute. (2015). METHANOL AS A MARINE FUEL REPORT. Sweden: FCBI
Energy. Obtenido de https://www.methanol.org/wp-content/uploads/2018/08/FCBI-
Marine-Fuel-Report-REVISED.pdf
Fichtner GmbH & Co. KG. (2020). Descarbonización del sector energético chileno Hidrógeno -
cadenas de valor y legislación internacional. Santiago: Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH.
Fraunhofer IEE. (2021). Atlas PtX. Recuperado el 16th de November de 2021, de

https://maps.iee.fraunhofer.de/ptx-atlas/
Frontier Economics. (2018). INTERNATIONAL ASPECTS OF A POWER-TO-X ROADMAP. Obtenido de

https://www.frontier-economics.com/media/2642/frontier-int-ptx-roadmap-stc-12-10-18-
final-report.pdf
Generadoras de Chile. (2021). Recuperado el 11 de 2021, de

http://generadoras.cl/prensa/gobierno-activa-estrategia-para-impulsar-regulacion-de-
hidrogeno-verde-y-forma-mesa-de-trabajo
GIZ & Centro de Energía UC. (2020). Proposición de Estrategia Regulatoria del Hidrógeno para Chile.
GIZ & HINICIO Chile. (2021). Cuantificación del encadenamiento laboral para el desarrollo del
hidrógeno en Chile bajo un escenario de exportación.
GIZ & INODÚ. (2020). Identificación de aspectos ambientales, sectoriales y territoriales para el
desarrollo de proyectos de hidrógeno verde en toda su cadena de valor. Chile: GIZ. Obtenido
de https://www.4echile.cl/publicaciones/estudio-identificacion-de-aspectos-ambientales-
sectoriales-y-territoriales-para-el-desarrollo-de-proyectos-de-hidrogeno-verde-en-toda-
su-cadena-de-valor/
GIZ & INODÚ. (2021). Análisis de la captura de carbono para la producción de combustibles sintéticos
en Chile.
GIZ & Ministerio de Energía. (2020). Proposición de Estrategia Regulatoria del Hidrógeno para Chile.
GIZ & Ministry of Energy. (2020). Proposición de Estrategia Regulatoria del Hidrógeno para Chile.
GIZ. (2020). Cuantificación del encadenamiento industrial y laboral para el desarrollo del hidrógeno
en Chile. Santiago.
GIZ. (2020). Identificación de aspectos ambientales, sectoriales y territoriales para el desarrollo de

proyectos de hidrógeno verde en toda su cadena de valor.
GIZ. (2021). Cuantificación del encadenamiento laboral para el desarrollo del hidrógeno en Chile bajo
un escenario de exportación.
227
GIZ. (2021). Potencial de Artículo 6 y otros instrumentos de financiamiento climático para fomentar
el uso de Hidrógeno Verde en Acero, Cemento y Minería.
GIZ. (2021a). Cuantificación del encadenamiento laboral para el desarrollo del hidrógeno en Chile
bajo un escenario de exportación. Santiago.
GIZ. (12 de August de 2021a). Jornadas de capacitación: ¿Es el Hidrógeno Verde un Negocio para el
Sector Financiero en Chile? Obtenido de https://www.unepfi.org/wordpress/wp-
content/uploads/2021/07/Primera-sesio%CC%81n-Introduccio%CC%81n-a-la-industria-
del-hidro%CC%81geno-verde.pdf
GIZ. (2021c). Condiciones y Oportunidades para el Comercio de Hidrógeno Verde desde Chile a
Alemania y Japón.
GIZ. (2021d). Análisis de la captura de carbono para la producción de combustibles sintéticos en

Chile.
GIZ. (13 de September de 2021e). Condiciones y Oportunidades para el Comercio de Hidrógeno

Verde desde Chile a Alemania y Japón. Obtenido de 4ea:
https://www.4echile.cl/publicaciones/condiciones-y-oportunidades-para-el-comercio-de-
hidrogeno-verde-desde-chile-a-alemania-y-japon/
Gogate, M. R. (2019). Methanol-to-olefins process technology:current status and future prospects.

Petroleum Science and Technology. Obtenido de
https://www.researchgate.net/deref/https%3A%2F%2Ffanyv88.com%3A443%2Fhttps%2Fdoi.org%2F10.1080%2F10916466.
2018.1555589
H2Chile. (2021). H2 Magallanes: Nuevo proyecto de hidrógeno verde en Chile. Obtenido de

https://h2chile.cl/h2-magallanes-nuevo-proyecto-de-hidrogeno-verde-en-
chile/#:~:text=En%20una%20solemne%20ceremonia%20en,de%20San%20Gregorio%20en
%20Magallanes
Hapag-Lloyd. (n.d). Nuestra compañía. Obtenido de https://www.hapag-

lloyd.com/es/company.html
ICAO. (2019). Environmental Report. Obtenido de https://www.icao.int/environmental-

protection/pages/envrep2019.aspx
ICAO. (2019a). POWER-TO-LIQUIDS (PTL): SUSTAINABLE FUELS FOR AVIATION. Obtenido de

https://www.icao.int/Meetings/a40/Documents/WP/wp_526_en.pdf
ICCT. (2018). GLOBAL PROGRESS TOWARD SOOT-FREE DIESEL VEHICLES IN 2018. Washington:
International Council on Clean Transportation.
IEA. (2018). Implementation of bio-CCS in biofuels production. Sweden: IEA Bioenergy. Obtenido de
https://www.ieabioenergy.com/wp-content/uploads/2018/08/Implementation-of-bio-
CCS-in-biofuels-production_final.pdf
IEA. (2021). Hidrógeno en Latinoamérica: De las oportunidades a corto plazo al despliegue a gran
escala. France: International Energy Agency.
228
IEA. (2021). The Role of Critical Minerals in Clean Energy Transitions. International Energy Agency.
Obtenido de https://iea.blob.core.windows.net/assets/24d5dfbb-a77a-4647-abcc-
667867207f74/TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf
IEA. (2021a). Oil 2021. International Energy Agency.
IEA. (2021b). An Energy Sector Roadmap to Carbon Neutrality in China.
ILO. (1989). C169 - Indigenous and Tribal Peoples Convention, 1989 (No. 169). Obtenido de
https://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0::NO::P12100_INSTRUMENT_ID,P
12100_LANG_CODE:312314,es:NO
IMO. (2019). Initial IMO GHG Strategy. Obtenido de

https://www.imo.org/en/MediaCentre/HotTopics/Pages/Reducing-greenhouse-gas-
emissions-from-ships.aspx
INACAP. (2021). INACAP refuerza su oferta académica en energía para responder a los nuevos
desafíos nacionales. Recuperado el 17th de November de 2021, de
https://portales.inacap.cl/noticias/destacadas/noticias-destacadas-2021/inacap-refuerza-
su-oferta-academica-en-energia-para-responder-a-los-nuevos-desafios-nacionales
INE. (2022). BOLETÍN ESTADÍSTICO: EMPLEO TRIMESTRAL. Región de Magallanes. Chile: INE.
Obtenido de https://regiones.ine.cl/documentos/default-source/region-
xii/estadisticas/ocupacion-y-desocupacion/boletines/2021/emp_ond_2021-(1-2)(3-
0).pdf?sfvrsn=f53fba39_4
Institute for Energy Studies. (2021). Voluntary markets for carbon offsets: Evolution and lessons for
the LNG market.
International Energy Agency. (2021). Direct Air Capture, more efford needed. Obtenido de
https://www.iea.org/reports/direct-air-capture
IRENA & Methanol Institute. (2021). Innovation Outlook: Renewable Methanol. Abu Dhabi:
International Renewable Energy Agency. Obtenido de
https://www.irena.org/publications/2021/Jan/Innovation-Outlook-Renewable-Methanol
IRENA. (2020). Green Hydrogen Cost Reduction: Scaling up Electrolysers to Meet the 1.5⁰C Climate
Goal. Abu Dabi.
IRENA. (2021). A pathway to DECARBONISE THE SHIPPING SECTOR By 2050. Abu Dhabi: IRENA.
Obtenido de https://www.irena.org/publications/2021/Oct/A-Pathway-to-Decarbonise-
the-Shipping-Sector-by-
2050#:~:text=Urgent%20action%20is%20needed%20to,transacted%20via%20ocean%20go
ing%20vessels.
IRENA. (2022). Geopolitics of the Energy Transformation: The Hydrogen Factor.
IRENA and ILO. (2021). Renewable Energy and Jobs - Annual Review 2021. Geneva.
229
ISCC. (2021). ISCC Certification for Sustainable Aviation Fuels. Recuperado el 11 de 2021, de
https://www.iscc-system.org/wp-content/uploads/2021/01/ISCC-for-Sustainable-Aviation-
Fuels_sales-presentation.pdf
Krauer, T., Vilalba, S., Aiello, R., & Beaujon, A. (18 de August de 2021). BID. Obtenido de ¿Cómo
promover y retener talento femenino en las empresas eléctricas? La experiencia de
Paraguay: https://blogs.iadb.org/energia/es/promover-retener-talento-femenino-
empresas-electricas-paraguay/
La Clase Ejecutiva UC. (2021). ENERGÍA Y RECURSOS NATURALES. Recuperado el 17th de November
de 2021, de https://www.claseejecutiva.uc.cl/programas/cursos-online/cursos-area-
energia-y-recursos-naturales/
La Clase Ejecutiva UC. (2021a). ENERGÍA Y RECURSOS NATURALES. Recuperado el 17th de November
de 2021, de https://www.claseejecutiva.uc.cl/programas/diplomados/area-energia-y-
recursos-naturales/
Liebich, e. a. (2020). Systemvergleich speicherbarer Energieträger aus erneuerbaren Energien.

Dessau-Rosslau: Umweltbundesamt. Retrieved from
http://www.umweltbundesamt.de/publikationen
MAERKS. (24 de August de 2021). Maersk accelerates fleet decarbonisation with 8 large ocean-going
vessels to operate on carbon neutral methanol. Obtenido de
https://www.maersk.com/news/articles/2021/08/24/maersk-accelerates-fleet-
decarbonisation
Marine Contamination Group of the National Oceanographic Committee. (2021). GUÍA PARA LA
EVALUACIÓN DE PROYECTO INDUSTRIALES DE DESALACIÓN EN LA JURISDICCIÓN DE LA
AUTORIDAD MARÍTIMA. Santiago: Directemar.
Markaki, M., Belegri-Roboli, A., Michaelides, P., Mirasgedis, S., & Lalas, D. (2013). The impact of
clean energy investments on the Greek economy: An input-output analysis (2010-2020).
Energy Policy, 263-275.
McPhy. (2021). McPhy Gigafactory. Obtenido de https://mcphy.com/en/press-releases/mcphy-

gigafactory/?cn-reloaded=1
Methanex. (2020). About us. Obtenido de Methanex: https://www.methanex.com/about-us
Methanol Institute. (2016). The Changing face of the global methanol industry. Obtenido de IHS
Chemical Bulletin: https://www.methanol.org/the-methanol-industry/
Methanol Institute. (2019). Methanol Fuel Blending In China.
Methanol Institute. (2021). METHANOL FUEL IN CHINA.
Mineria Chilena. (16 de November de 2021). Hidrógeno verde: Chile y Corea firman memorandum
de acuerdo para desarrollar este recurso. Obtenido de MCH:
https://www.mch.cl/2021/11/16/hidrogeno-verde-chile-y-corea-firman-memorandum-
de-acuerdo-para-desarrollar-este-recurso/#
230
Ministerio de Energía. (2020). National Green Hydrogen Startegy.
Ministerio de Energía. (2021). Recuperado el 11 de 2021, de https://energia.gob.cl/ley-y-plan-de-

eficiencia-energetica
Ministerio de Energía y SEC. (2021). GUÍA DE APOYO PARA SOLICITUD DE AUTORIZACIÓN DE

PROYECTOS ESPECIALES DE HIDRÓGENO.
Ministry General Secretariat of the Presidency. (13 de Agosto de 2021). Ley 19300. Santiago.
Obtenido de Bibloteca del Congreso Nacional de Chile: http://bcn.cl/2f707
Ministry of Energy. (3 de July de 2018). Comundida de María Elena conoce más del proyecto Cerro
Dominador. Obtenido de Ministerio de Energía:
https://energia.gob.cl/noticias/antofagasta/comunidad-de-maria-elena-conoce-mas-del-
proyecto-cerro-dominador
Ministry of Energy. (2019). Guía para el desarrollo participativo de proyectos de Energía. Obtenido
de
https://energia.gob.cl/sites/default/files/documentos/consultas_publicas/Tomo_etapa_te
mprana_y_evaluacion_para_consulta_p%C3%BAblica.pdf
Ministry of Energy. (2020). Plan "Energía+Mujer": Un Sector Energico Inclusivo. Santiago.
Ministry of Energy. (2021). APRUEBA REGLAMENTO DE SEGURIDAD DE INSTALACIÓN DE

HIDRÓGENO. Santiago.
Ministry of the Environment. (6 de Octubre de 2014). Decreto 40. Santiago. Obtenido de Biblioteca
del Congreso Nacional de Chile: http://bcn.cl/2f8a8
Ministry of the Environment. (2021). Servicio de Evaluación Ambiental. Obtenido de Servicio de

Evaluación Ambiental: https://www.sea.gob.cl/evaluacion-de-impacto-ambiental/cual-es-
el-proceso-de-evaluacion-de-impacto-ambiental
MOP. (2016). Pueblos Indígenas: Consulta y Territorio.
National Standards Institute. (2003). Sustancias peligrosas - Terminología y clasificación general .

Santiago.
NIRAS. (2020). Sustainable Jet Fuel for Aviation. Obtenido de

https://www.nordicenergy.org/wordpress/wp-content/uploads/2020/02/Sustainable-Jet-
Fuel-Update-FinalNER.pdf
NS Energy. (January de 2020). How the six major oil companies have invested in renewable energy
projects. Obtenido de https://www.nsenergybusiness.com/features/oil-companies-
renewable-energy/
Orellana, F. (8 de Marzo de 2021). Los avances de la industria energetica para inserta más mujeres.
Diario Financiero, págs. 30-33.
Orkerstra. (2021). Perspectivas de desarrollo de un mercado global del hidrógeno. Obtenido de

https://www.orkestra.deusto.es/images/investigacion/publicaciones/informes/cuadernos
231
-orkestra/210006-Perspectivas-desarrollo-mercado-global-hidr%C3%B3geno-
COMPLETO.pdf
Patch, K. (14 de September de 2019). Competition for World's Largest Capacity Electrolyser Factory.
Obtenido de Linkedin: https://www.linkedin.com/pulse/competition-worlds-largest-
capacity-electrolyser-factory-patch/
Pontificia Universidad Católica de Chile. (2021). Recuperado el 11 de 2021, de

https://educacionprofesional.ing.uc.cl/comision-de-evaluacion-ambiental-aprueba-por-
unanimidad-primer-piloto-de-hidrogeno-verde-en-chile/
Porsche. (2nd de February de 2020). Siemens Energy and Porsche, with partners, advance climate-
neutral e-fuel development. Obtenido de
https://www.porsche.com/international/aboutporsche/pressreleases/pag/?pool=internati
onal-de&id=619733
Punta Arenas municipality. (2021). PLan de desarrollo comunal 2021-2025.
Repsol. (23 de October de 2020). Repsol to build Spains first advanced biofuels plant in Cartagena.
Obtenido de https://www.repsol.com/en/press-room/press-releases/2020/repsol-to-
build-spains-first-advanced-biofuels-plant-in-cartagena/index.cshtml
Repsol. (20th de September de 2021). Repsol to start up the first electrolyser at its Petronor refinery.
Obtenido de https://www.repsol.com/en/press-room/press-releases/2021/repsol-to-start-
up-the-first-electrolyser-at-its-petronor-refinery/index.cshtml
Repsol. (2021a). Technology, one of the main ways to curb climate change. Obtenido de
https://www.repsol.com/en/sustainability/climate-change/new-technological-
developments/index.cshtml
RETC. (2019). Emisiones al Aire de Fuentes Puntuales. Obtenido de

https://datosretc.mma.gob.cl/dataset/emisiones-al-aire-de-fuente-puntuales
Rhodium Group. (2020). Capturing New Jobs: The employment opportunities associated with scale-
up of Direct Air Capture (DAC) technology in the US.
Ricardo. (2019). Quantifying future hydrogen demand for upgrading biofuels. Obtenido de
https://cdn.ricardo.com/ee/media/assets/hydrogen-demand-for-upgrading-biofuels-final-
report_v2-(002).pdf
SEA. (2012). Permisos y pronunciamientos ambientales sectoriales. Obtenido de

https://www.sea.gob.cl/documentacion/permisos-autorizaciones-ambientales/permisos-
pronunciamientos-ambientales-sectoriales
SEA. (2014). Informe Consolidado Nº 1 de Solicitud de Aclaraciones, Rectificaciones y/o Ampliaciones

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235

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Project #: CH-T1235-P003

"Prefeasibility study for a synthetic fuel project in

At the request of the Inter-American Development Bank (IDB)

March 15, 2022

Figure 1. Simplified Diagram of the components of The Plant .................................................. 14

AEL Alkaline Electrolysis

ALK Alkaline Electrolysis

BEV Battery electric vehicles

BioCCS Bioenergy with Carbon Capture and Storage

BtL Biomass to liquid fuels

CCS Carbon capture and storage

CCU Carbon capture and usage

CNE National Commission of Energy

CtL Coal to liquid fuels

DAC Direct air capture

DME Dimethyl ether

EIA Environmental Impact Assessment Study

FTE Full Time Equivalent

FCEV Fuel cell electric vehicles

GHG Greenhouse Gases

GtL Gas to liquid fuels

GWP Global warming potential

HEFA Hydroprocessed Fatty Acid Esters and Free Fatty Acid

LCOM Levelized cost of methanol

ME Ministry of Energy of Chile

MMSA Methanol Market Services Asia

MSA Moisture Swing Adsorption

O&M Operation and maintenance

PEM Proton Exchange Membrane Electrolysis

PtG Power to gas

PtL Power to liquids

PtCH4 Power to methane

RED Renewable Energy Directive

RWGS Reverse Water Gas Shift

SAF Sustainable Aviation Fuels

SEC Superintendency of Electricity and Fuels

SOEC Solid Oxide Electrolysis Cell

TRL Technology readiness level

TSA Temperature Swing Adsorption

The contents of this chapter are organized as follows:

• Definition of synthetic fuels.

The key findings of the chapter can be summarized as followed:

The contents of this chapter are organized as follows:

• Benchmark of synth fuel projects in Chile.

Chapter 5 develops Activity 4, which corresponds to the identification and description of

The contents of this chapter are organized as follows:

• Considerations taken for the sizing of the plant.

The key findings of the chapter can be summarized as followed:

Chapter 6 develops Activity 5, which corresponds to the description of major infrastructure,

The contents of this chapter are organized as follows:

• Description of utilities and required services.

The principal conclusions of the chapter are the following:

The contents of this chapter are organized as follows:

• List of components for the main equipment.

The principal conclusions of the chapter are the following:

Figure 1. Simplified Diagram of the components of The Plant

The contents of this chapter are organized as follows:

• Presentation of CAPEX and OPEX costs.

The principal conclusions of the chapter are the following:

The contents of this chapter are organized as follows: