Chile Advances Major Green Fuel Plant in Biobío Region

Chile is taking a major step toward climate-neutral transportation with a pioneering project that transforms industrial waste into clean fuel.

German technology company INERATEC is partnering with four Chilean companies to evaluate a Power-to-Liquids plant at ARAUCO's Biobío industrial complex, one of Latin America's largest forestry hubs. The facility would capture carbon dioxide from wood processing operations and combine it with locally produced green hydrogen to create sustainable fuels for vehicles, chemicals, and specialty applications.

The collaboration brings together ARAUCO's industrial infrastructure, Abastible's renewable hydrogen expertise, fuel distributor Copec's logistics network, and INERATEC's proven conversion technology. Together, they're conducting engineering studies to determine how existing facilities can integrate with cutting-edge clean energy systems.

The project started as a concept during Chile's Energy Challenge 2023 and has steadily progressed through feasibility studies. Now the partnership has completed basic engineering work, marking a tangible step toward construction. INERATEC's investment arm, Copec Wind Ventures, has provided strategic funding to accelerate the evaluation.

Chile's government is backing the initiative through CORFO, a national development agency that fully funded the engineering phase. The support reflects Chile's ambition to become a global leader in green hydrogen production, leveraging its abundant solar and wind resources.

The Ripple Effect

This project could transform how South America approaches industrial emissions. Rather than viewing carbon dioxide as waste, the facility would treat it as a valuable resource for producing transportation fuel without extracting more fossil fuels from the ground.

The Biobío region stands to become a hub for Chile's emerging sustainable fuel economy. If successful, the model could be replicated at industrial sites across the country and continent, creating jobs while reducing emissions from hard-to-decarbonize sectors like aviation and shipping.

Tim Böltken, INERATEC's co-founder and CEO, emphasized the project's potential to demonstrate how existing industrial operations can partner with renewable energy producers. The collaboration shows that climate solutions don't always require building from scratch—sometimes the path forward involves creatively connecting what's already there.

Chile's unique advantages make it an ideal testing ground for this technology: strong renewable energy resources, supportive government policies, established industrial infrastructure, and companies willing to invest in the energy transition. The nation aims to be carbon neutral by 2050, and projects like this one provide concrete pathways to that goal.

The partnership is now working through technical details to determine the optimal plant design and production capacity, with decisions expected in the coming months on whether to proceed to construction.