- Communities in the Argentinian town of Colón worry that an upcoming major green hydrogen project on the Uruguay River will affect local ecosystems, as well as local tourism.
- The Paysandú e-fuels facility is one of Uruguay’s major hydrogen projects, as the country is pushing to further decarbonize its economy and boost hydrogen exports. The plant will produce green hydrogen using renewable energy to then produce e-methanol for exporting.
- Argentinian activists fear potential pollution from the plant and criticize the project for lack of transparency over its environmental impacts. Opposition is also growing on the Uruguayan side of the river.
- Another green hydrogen project in the town of Tambores is also being denounced for its impact on water resources, as the plant will withdraw large amounts of water from some of the country’s largest aquifers.
COLÓN, Argentina — Darío Larrosa was 15 when he learned to drive a motorboat. Decades later, he still loves taking tourists fishing along the Uruguay River’s sandy shores aboard Abuela Elisa, the boat he named after his grandmother. He does ask the lucky anglers who catch something to release the fish, to help maintain the river’s fish stocks.
But Larrosa and the wider community in Colón, a tourist resort in Argentina’s Entre Ríos province, are worried that a major green energy project rising on the Uruguayan side of the river could undermine riverine ecosystems and local livelihoods. In Uruguay, communities in Paysandú, a city 15 kilometers (9.3 miles) south of the project, have also put up resistance, despite promises of jobs and economic growth.
Planned to become operational in 2026, the Paysandú e-fuels facility is a $6 billion project by Chile-based company HIF Global aiming to produce about 700,000 metric tons of e-methanol annually using green hydrogen. The 1GW-capacity facility is one of four major hydrogen initiatives in the country, as Uruguay seeks to further decarbonize its economy and export green hydrogen. The nation is already supplying 99% of its electricity from renewables and wants to become carbon neutral by 2050. According to Uruguay’s Ministry of Industry, Energy and Mining (MIEM), developing the green hydrogen industry could bring the country $1.9 billion per year and create more than 30,000 jobs.
The Uruguay River runs for more than 1,800 km (1,120 mi), from Brazil’s Serra do Mar mountains to the Río de la Plata estuary, where the two merge and flow into the Atlantic Ocean; its last 578 km (360 mi) are the natural border between Uruguay and Argentina.
The project, launched in 2024 through a government agreement with HIF Global, will produce green hydrogen, made via water electrolysis using renewable energy, and combine it with biogenic carbon dioxide to produce e-methanol, which can be used, among other ways, in shipping, fuel production and in chemical industries. HIF Global estimates the facility could offset the equivalent emissions of more than 150,000 vehicles per year.
Tourists come to Colón for its soft, sandy beaches, thermal waters and lively town life. With the Paysandú e-fuels facility located only 3.6 km (2.2 mi) away, locals, most of whom work in tourism, are concerned for the health of local ecosystems.
Carlos Serratti, a geography teacher from Colón who is part of the Somos Ambiente NGO, fears the facility’s three 60-meter (197-foot) tall chimneys, which will be visible from the Argentinian side, could send plumes of methane, benzene and sulphur dioxide across the river, as a result of incineration processes to produce carbon dioxide. To produce e-methanol, the facility plans to capture the gas from biomass burning and cereal alcohol distillation. “The wind blows from the east most of the year, so any emissions would come our way,” he said. “There’s no legislation regulating transboundary air pollution.” In a recent interview, Martín Bremermann, Latin America director for HIF Global, said that the chimneys’ height would be reduced to around 30 meters (98 feet) and that the company would plant a curtain of native trees 30-40 m (98-131 ft) tall.
But his biggest concern is the e-methanol, Paysandu’s intermediate product, which will be processed into four types of fuel and subsequently exported to European markets seeking cleaner fuels.
“Methanol is toxic, highly flammable and explosive,” he warned. “What happens if there’s a spill? Zero risk doesn’t exist.”
Environmental concerns have been amplified by the lack of transparency surrounding Uruguay’s memorandum of understanding (MOU) with HIF Global. “There are a lot of questions we don’t have answers to,” he noted.
Since late 2024, Serratti has helped Somos Ambiente organize outdoor concerts near the Port of Colón to raise awareness about the risks of the e-fuel plant. Throughout May, he also co-hosted weekly debates about the green hydrogen project on the community radio station.
As a result of advocacy efforts, Colón’s Mayor, José Luis Walser sent a letter to HIF Global, urging the company to relocate the plant “due to the risk conditions. … What today is an administrative procedure,” Walser warned, “may tomorrow be an unwanted conflict,” referring to a years-long dispute between the towns of Gualeguaychú and Fray Bentos over a pulp mill on the Uruguay River.
The mayor also wants Colón included in the project’s environmental impact assessment. In September 2024, HIF Global had assured Colón authorities that Paysandú would not generate pollution or water usage above standard, but did not disclose the project’s environmental impact assessment.
To make Argentina’s concerns heard, Entre Ríos Governor Rogelio Frigerio met earlier this year with Uruguay’s new center-left president Yamandú Orsi, who inherited the HIF Global project, as well as with the Administrative Commission of the River Uruguay, a binational body that oversees the river’s development.
Uruguayans also fight back
On the Uruguayan side, Paysandú may have a sandy coastline dotted with yatay palms, but it lacks the tidy glamour of its Argentine counterpart. Once a manufacturing hub for meatpacking, tanning and textiles, the industrial town bears traces of its past in its faded municipal buildings.
HIF Global says construction could generate 3,000 jobs in Paysandú, a department where unemployment is above 10%.
Still, opposition is growing, said Leonardo Belassi of civil society group Paysandú por un Uruguay Soberano. In May, Belassi and fellow activists launched a campaign to collect the 15,000 signatures needed to trigger a local referendum on whether to allow the plant anywhere in the department. Article 305 of Uruguay’s Constitution “gives us the right to call on eligible residents of Paysandú to decide whether they want this type of plant,” Belassi said.
Meanwhile, a coalition of unions and grassroots organisations, known as Inter Social de Paysandú, is collecting signatures for a separate petition to protect the uninhabited Queguay Islands on the Uruguay River and adjacent river areas from HIF Global’s industrial activity.
Just a short boat ride from both Colón and Paysandú, the Queguay Islands provide key breeding grounds for fish and nesting areas for migratory birds. Local group GENSA (Grupo Ecológista Naturista Sanducero) has long pushed for formal protection of the Queguay ecological corridor; in 2018, it proposed it for inclusion in Uruguay’s National System of Protected Areas, arguing its wetlands, sandbanks and forests provide habitat for native flora and birds such as skimmers (Libellulidae), terns (Sterna hirundo), plovers (Charadrius hiaticula) and the endangered yellow cardinal (Gubernatrix cristata).
In December 2024, Uruguay’s government included the islands in the national protected areas system but excluded four parcels — including two where HIF is authorized to build.
Inter Social’s petition aims to prohibit industrial development in these areas. Belassi wants to go further. “It’s risky to limit the ban to just those four locations,” he said.
The campaigners for a referendum on the HIF Paysandú plant know that public pressure can sometimes influence environmental policy in Uruguay. In February, the Environment Ministry denied prior environmental authorization for a planned residential complex along Punta Ballena, a popular stretch of Uruguay’s Atlantic coast in the department of Maldonado. The decision, citing potential harm to biodiversity, terrestrial ecosystems and to the area’s iconic landscape, came after a successful signature-gathering effort led by local environmental groups.
In response to Mongabay’s request for comment, an HIF Global spokesperson said, “Protests are part of the system and the rules of the game; it is healthy that they happen. One of the reasons we were drawn to this country is its democratic system and the strength of its institutions.”
The company added that since 2023 it has held nearly a dozen public meetings attended by more than 300 residents and gathered about 100 questions and suggestions, all of which it said have been incorporated in its environmental management strategy.
The Uruguayan Hydrogen Association, a lobby group, told Mongabay in a written response that many of the accusations against HIF Global are “not well-founded,” given that the project “has not yet entered the environmental evaluation phase.” Similarly, criticism of “lack of transparency” is unfair as “all the project’s technical documentation has been available to the public on the Paysandú municipality’s website.”
Uruguay expands its green hydrogen industry
In 2020, when retired journalist and art teacher Miguel Ángel Olivera Prietto moved to the town of Tambores to focus on painting and poetry, he never imagined that two years later, a German company would announce plans to build a green hydrogen hub just a few kilometers from his new home.
About 200 km away north-east from the HIF Paysandú plant, the Tambor Green Hydrogen Hub is a project of ENERTRAG SE, a Germany-based renewable energy company, in partnership with SEG Ingeniería, an engineering company in Montevideo, aiming to produce 15,000 metric tons of green hydrogen per year for conversion into e-methanol. Three hundred and fifty MW of solar and wind energy would fuel the electrolysis process.
“As a location, Tambores is ideal: abundant wind, plenty of sun, aquifer water and lots of space,” Olivera Prietto said about the flat, endless grasslands surrounding his town that sits on the borders of Paysandú and Tacuarembó departments.
According to ENERTRAG, “The e-methanol produced here could compensate for around 10% of the methanol conventionally produced from Russian crude oil in Germany’s largest refinery.”
Producing 1 kilogram (2.2 pounds) of green hydrogen requires roughly 9 litres (2.4 gallons of water, according to the International Energy Agency. The Tambor project, which will require 500-700 cubic meters (17,650-24,700 cubic feet) of water per day, will draw it from the Arapey Aquifer — Uruguay’s largest groundwater reservoir and Tambores’ primary source of drinking water — and from the Guarani Aquifer, the world’s second-largest known aquifer, which spans 110 million hectares (272 million acres) across Uruguay, Argentina, Paraguay and Brazil.
Gladys de Souza, a neighbor of Olivera Prietto, said, “There hasn’t been a serious study of the Arapey Aquifer and of the impacts of perforating wells. What if the water taken for production by the plant isn’t replenished?”
Aquifer recharge processes are slow and can take decades, or even centuries, according to Irene Balado, a geologist and member of the Working Group on Environment and Human Rights within the UNESCO Department for Human Rights at Uruguay’s University of the Republic. “Contamination and overexploitation lead to degradation that is not only local to the water resource but can also result in the regionalization of a conflict,” she said at a conference on green hydrogen in Paysandú, referring to the Guarani Aquifer.
“We are proud of our water here,” said Ana María Barbosa, a professor at the University of the Republic in Tacuarembó and Oliver Prietta’s partner. “It’s one of the purest in all of Uruguay. That’s why ENERTRAG want to use it. There are no costs to desalinate the water,” she added.
In a written response to Mongabay, ENERTRAG stated that its final design will require 660 m3 (23,300 ft3) of water per day, which “will be sourced from a dedicated surface reservoir developed as part of the project infrastructure.” Its backup, the company said, are a secondary surface reservoir and 10-12 groundwater wells, the latter “to be used only under exceptional circumstances.”
As part of the project, more than 2,300 hectares (5,680 acres) will be occupied by wind turbines, with an additional 500 hectares (1,235 acres) needed for solar parks. Barbosa is worried about the project’s impact on local ecosystems. “This will affect the migration and presence of many native bird species, some already endangered,” she said.
She and de Souza also fear Tambor’s potential indirect consequences: pollution from construction, truck and bus traffic and the large influx of workers. “The company estimates 67 buses and 30 trucks per day transporting personnel and carbon dioxide from Rivera [in northernmost Uruguay] for methanol production,” Barbosa said. “That level of pollution doesn’t exist here today.”
Yet not everybody is alarmed. Ricardo Soares de Lima, the outgoing Mayor of Tambores supports the plant; although he acknowledged its construction will create disruption, he considers it a sign of progress. “Look what happened when the railway arrived 125 years ago,” he said. “Suddenly, we could reach Montevideo in 12 hours.” He’s also confident the aquifer will be protected.
Despite the environmental concerns, garnering local support to challenge the project has been difficult, Olivera Prietto said. “When Ana María [Barbosa] organized information sessions with university colleagues, local landowners who leased land to ENERTRAG dismissed them as communists,” he told Mongabay.
Only 40 residents filed a Supreme Court challenge in 2023, arguing that the project violated Article 47 in Uruguay’s Constitution, which enshrines access to clean water and sanitation as human rights. The court dismissed the case on procedural grounds.
In February, nongovernmental groups including Ateitén Hué Circle, the Guaraní Aquifer Network and Ecodrums wrote to Uruguay’s national director of water demanding inclusion in decision-making.
ENERTRAG suffered a setback in February, when Uruguay’s National Directorate of Environmental Quality and Assessment (DINACEA) rejected its environmental impact assessment for Tambor. Authorities cited insufficient technical details, especially regarding water use, and noted inconsistencies between the company’s stated and projected demand.
DINACEA also flagged missing information on the planned wells and backup sources, stating that key elements of the project’s hydrological impact remained unclear.
In its response to Mongabay, ENERTRAG stated that it “is aware of the concerns raised regarding water availability and the potential interaction with aquifers. The design we submitted to DINACEA, developed with local and international experts, is a robust and sustainable system that is designed to avoid any risk to local communities and ecosystems.”
Arianna Spinelli, MIEM director, said in an email to Mongabay that “the continuation of the project depends, first and foremost, on compliance with current environmental regulations. This requirement is non-negotiable.”
A spokesperson from the Uruguayan Hydrogen Association told Mongabay that “the ministry’s response is part of the standard procedure within Uruguay’s environmental evaluation process.” They added that delays were mostly market and technology-driven. “Uruguay has no control over these two factors because firstly, the market is export-oriented, and secondly, the technology is not produced in Uruguay.”
Some argue that Uruguay shouldn’t be so dependent on foreign expertise. Carlos Fernando Zinola Sánchez, professor of electrochemistry at the University of the Republic in Montevideo, said the country has the know-how to develop more sustainable hydrogen production locally. “We’ve already experimented with producing hydrogen from saltwater,” he told Mongabay. “We could avoid exploiting freshwater resources altogether — and build up our own industrial capacity in the process.”
Banner image: A view of Rio Uruguay from the Argentinian town of Colón. Image by Ali Qassim for Mongabay.
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