German energy company Mabanaft and Porsche-backed Chilean e-fuels developer HIF Global have signed a Heads of Agreement for the planned offtake of up to 100,000 tonnes of e-methanol per year.
While not a binding contract, the agreement sets the framework for future negotiations on a potential e-methanol offtake agreement.
It builds on a Memorandum of Understanding signed by the partners in 2021 for the purchase and sale of up to 500 million litres of e-fuels per year from HIF Global’s Haru Oni plant in the Magallanes region of Chile.
The facility utilises Chile’s abundant wind energy to produce green hydrogen, which is then combined with captured CO2 to create synthetic fuels.
At the same time, efforts are underway to support downstream infrastructure.
“In parallel, we are now in the process of making methanol storage available at our Hamburg tank terminal and possibly further global locations,” said Volker Ebeling, Senior Vice-President of New Energy, Supply & Infrastructure at Mabanaft.
In 2022, German carmaker Porsche AG invested $75m in HIF Global for a long-term stake in the company, reflecting its intent to expand into the emerging synthetic fuels market for the automotive industry.
“Synthetic fuels offer attractive prospects across transportation sectors, from the automotive industry to the aviation and shipping sectors,” said Michael Steiner of Porsche.
However, the high cost and energy intensity of producing e-methanol continue to raise questions over its scalability and commercial viability. According to the International Renewable Energy Agency, e-fuels remain two to seven times more expensive than conventional fuels, with production currently limited to a handful of pilot and demonstration plants.
The global e-methanol market was valued at around $231m in 2023 and is projected to grow to over $1.5bn by 2031, driven by rising demand for low-carbon fuels in sectors like shipping, where orders for methanol-fuelled vessels rose 88% in 2023, according to maritime consultancy and intelligence provider Clarksons.
