The projected green hydrogen plant in PaysandúThe complex, located on the Uruguayan bank of the Uruguay River, has become the new epicenter of tension between Montevideo and Buenos Aires. The project, developed by the multinational HIF Global, promises to be one of the larger energy investments in the regionBut its location opposite the Argentine province of Entre Ríos has set off all the political, judicial and environmental alarms on the other side of the river.
While the Uruguayan government presents the project as a strategic commitment to clean fuels And as a further step in their energy transition, warnings are growing from the Argentine side about potential environmental damage and the fear of repeating the bitter binational conflict that surrounded the former Botnia pulp mill in Fray Bentos. In this climate, green hydrogen has firmly established itself on the diplomatic agenda of the two Río de la Plata countries.
A green hydrogen and e-fuels megaproject in Paysandú
The initiative HIF Global in Paysandú It is conceived as a large-scale industrial complex dedicated to the production of green hydrogen and synthetic fuels (e-fuels) for export. The documents submitted to the Uruguayan authorities and the Argentine courts refer to an investment that falls between 4.000 and 6.000 millions of dollars, which would make it the largest foreign direct investment in Uruguay's recent history.
According to the technical plans released, the plant will be built at about 15 kilometers from the urban center of Paysandú barely anymore 3-4 kilometers in a straight line from the Argentine city of Colónin Entre Ríos. This proximity to one of the busiest tourist stretches of the Uruguay River is one of the points that most This is causing concern among Argentine authorities and residents., who are demanding changes in location.
The complex plans to install green hydrogen production areas through electrolysis powered by renewable electricity, facilities of chemical storagePower plants that support and use intensive freshwater. The hydrogen generated will be used to produce e-methanol and e-gasoline on a large scale, with figures that are around 876.000 tons of e-methanol per year ass and 313.000 tons of e-gasoline, primarily intended for international markets such as Europe and Asia.
The project is located in the vicinity of Queguay Islands Protected Areaan area of high environmental sensitivity due to its river ecosystems and biodiversity. This aspect, combined with the high projected consumption of water resources and the scale of the industrial infrastructure, has placed the potential environmental impact at the center of public debate in both Uruguay and Argentina.
Uruguay, a green hydrogen laboratory in the region
The development of the plant in Paysandú is not an isolated event, but part of a Uruguay's national strategy to position itself on the global green hydrogen mapWith an electricity grid that already exceeds 95% renewable generation and a recognized leadership in wind energyUruguay now seeks to make the leap from electricity exports to exporting goods. energy in the form of moleculesThat is, hydrogen and its derivatives.
In this context, the Paysandú plant is placed in the category of megaprojectMeanwhile, in other parts of the country, initiatives of varying sizes are progressing. In Fray Bentos, for example, the plant is under construction. Kahirósa pilot project valued at around 38 million focused on supplying heavy transport with green hydrogen. Its main objective is to test under real-world conditions the technological and logistical feasibility of this new energy value chain.
Also underway, but in the design and environmental assessment phase, is the project Drumin the department of Tacuarembó. This industrial initiative, backed by an estimated investment of 1.000 million, proposes the production of 84.000 tons of green hydrogen per year which will later be transformed into e-methanol for export, mainly to European markets with demanding climate objectives.
The Tambor project includes a wind farm with 33 wind turbinesThe project includes supplemental solar power generation, a large electrolysis plant, and a dam designed to guarantee the system's water supply. According to studies published in Uruguay, the construction phase could generate approximately 1.300 direct jobsillustrating the potential of this industry to revitalize regional economies.
With these and other projects on the table, the Uruguayan green hydrogen map is currently organized into three levels: pilot projects already underwayindustrial initiatives under evaluation and megaprojectsProjects like the one in Paysandú are in the permitting and design phase prior to the final investment decision. The country does not yet produce green hydrogen on a massive scale, but it is in a decisive takeoff phase.
The legal and political battle in Entre Ríos
On the Argentinian side, the Paysandú plant has triggered a judicial and political offensive in Entre Ríoswhere some local leaders fear the case could lead to what many are already calling a “new Botnia.” Three national legislators from Entre Ríos —Guillermo Michel, Marianela Marclay and Adán Bahl— have filed a preventive civil lawsuit against the Uruguayan State and the company HIF Global, alleging breaches of the Statute of the Uruguay River and the possibility of irreparable environmental damage.
The legal action argues that Uruguay is advancing in a “unilateral” in the processing of permits for the synthetic fuels plant, without submitting all the technical and environmental documentation to the Administrative Commission of the Uruguay River (CARU)The binational body responsible for managing the shared waterway. According to the plaintiffs, this omission would prevent Argentina from rigorously assessing the health and ecological impact of the project.
The case has been filed in the federal jurisdiction of Conception of Uruguay, after the prosecutor María Josefina Minatta ruled that the file cannot go directly to the Supreme Court of Justice of the Nation in the original instance. In her opinion, dated March 18, the prosecutor recalled that direct access to the highest court is a exceptional route, reserved for very specific cases such as disputes between provinces or cases involving ambassadors and diplomats.
Relying on the jurisprudence of the famous case “Sojo”Minatta stressed that foreign states and their representations are not authorized to litigate directly before the Supreme Court in this type of process, therefore the conflict must follow the usual course in the federal courts of first instance. The ruling expressly recognizes the citizens' right to defend collective environmental interestsHowever, it makes clear that this protection does not legitimize skipping ordinary procedural stages.
Thanks to this resolution, the federal court in Entre Ríos is now authorized to adopt preventive measures such as the judicial recognition of the costs against Paysandú and the carrying out of Technical analysis of the water of the Uruguay River in the Colón area. These proceedings seek to document in detail the current environmental situation, with a view to comparing possible changes if the plant is built and becomes operational.
The ghost of Bothnia and the dispute over the location
Alongside the legal proceedings, the green hydrogen plant has ignited a Intense political clash in Entre Ríos, headed by the governor Rogelio FrigerioFor weeks now, the provincial governor has been repeating that his administration “cannot allow another Botnia"in front of the Entre Ríos beaches, alluding to the old conflict over the Fray Bentos pulp mill that reached the International Court of Justice in The Hague and caused prolonged closures on international bridges.
Frigerio has insisted that he is not opposed to the arrival of industrial investments that generate employment, but demands that the plant relocated a few kilometers upstream or downstream, so that it is not located directly opposite the beaches and busiest tourist areas of Columbus. In several public appearances and on social media, he has argued that it is simply a matter of “common sense"more than a rejection of progress or employment."
The governor has even raised the possibility of relocating the project. about 30 kilometers from the Argentinian coastso as to reduce the visual impact and move industrial infrastructure away from the tourist heart of Entre Ríos. At the same time, he acknowledged that, until the problems of sewage and industrial effluents in their own provinceThe moral authority to question other people's pollution is limited, something he has justified by promoting new sanitation works along the river.
These positions have been harshly criticized by political figures from Entre Ríos itself, such as the deputy Guillaume Michel, who accuses Frigerio of "inaction" and of having arrived late to the legal front. According to the legislator, the lack of management forced them to resort to the federal courts to try to stop or condition the plant's progress, and he criticizes the governor for having tried to "distract" the local population while the project continued.
Adding to this climate are the memories of the conflict with Botnia-UPM: persistent complaints from residents about unpleasant odorscomplaints of changes in water quality and episodes of toxic leaks admitted at the time by the company, which ended up restructuring its operations and changing ownership. More recently, the first sulfuric acid spill The discovery at the UPM plant in Fray Bentos, after 17 years of operation, has reignited the debate about the industrial safety on the Uruguayan riverbank.
Uruguay's response: environmental guarantees and active diplomacy
Faced with increasing pressure from Entre Ríos, the Uruguayan government has opted for a strategy of public calm and emphasis on environmental guarantees. President Yamandu Orsi He acknowledged having discussed the issue directly with the Argentine ambassador in Montevideo, Alan BéraudTaking advantage of events like the National Expoactiva to convey the message that Uruguay is willing to engage in dialogue and listen to concerns from the neighboring country.
Orsi argues that the project's development responds to a private investment decision supported by the Uruguayan StateHe expressed confidence that agreements could be reached to help ease tensions with communities on the Argentine coast. According to the president, the foreign minister Mario Lubetkin He maintains regular contact with his Argentine counterpart, Pablo Quirno, to clear up technical and political doubts about the evolution of the Paysandú plant.
For his part, Lubetkin has publicly defended that Uruguay He does not want to repeat the scenario of the bridge closures. which marked the Botnia conflict between 2005 and 2010. Faced with Governor Frigerio's warnings, the Foreign Minister has responded that “Nobody wants a repeat of what happened with the bridges.”, emphasizing that, unlike in that era, today there is a more orderly dialogue channel between the two shores.
The Uruguayan Ministry of Environment is processing the HIF Global project under the regime of “High Complexity”which entails a particularly thorough environmental assessment procedure. After having obtained the Environmental Location Viability (VAL) At the end of 2025, the company submitted the formal application in March 2026 Prior Environmental Authorization (AAP), a key step before any significant work on the ground.
Lubetkin stressed that, during this phase, they joined the Environment Effect investigation the Questions and concerns conveyed by the Argentine authoritiesincluding those related to the visual impact on Colón and the use of water resources. The idea that the Uruguayan Executive is trying to convey is that the project will only move forward if it is demonstrated that it can meet demanding environmental standards without compromising the quality of the shared river ecosystem.
The role of Paysandú and local sensibilities
At the local level, the mayor of Paysandú, Nicolas Olivera, has become a key voice when it comes to trying to reduce the tension of the public debateAlthough he defends the opportunity the project represents for the Paysandú economy, Olivera insists on the need for “Be careful with the tones and shapes” when the topic is discussed, especially in response to the heated statements coming from neighboring Entre Ríos.
The mayor recalls that the concerns expressed by Colón and the province of Entre Ríos These findings were included in the environmental impact study required by the Ministry of the Environment from HIF Global. Among the points analyzed were the potential visual impact on the landscape from the Argentine coast and the landscape mitigation measures proposed by the company to reduce that footprint on the environment.
Olivera frequently refers to the experience of the Botnia litigation before The Hague as a warning about the Risks of letting confrontation supplant dialogueIn his opinion, that conflict should have taught us that, when the Irrationality prevails in diplomatic exchangeThe populations on both sides are the ones who end up paying the price, whether in the form of blockades, deterioration of coexistence or loss of economic opportunities.
For the mayor, the current situation is different from that of two decades ago: now there is a greater culture of cooperation between Uruguay and Argentina and a more consolidated international legal framework on environmental matters. However, he acknowledges that the word “Botnia” still evokes strong feelings. very recent memories and that any large industrial installation on the Uruguay River will be scrutinized in detail by social organizations, productive sectors and authorities of both countries.
In this scenario, Paysandú moves between the expectation for the potential economic and employment benefits of the plant—from construction to eventual commercial operation—and the responsibility of to ensure that development does not compromise the environmental quality of the coastline nor reopen diplomatic wounds that the region has not yet fully healed.
An energy strategy with Europe on the horizon
Beyond the binational tension, the green hydrogen plant in Uruguay fits into a global trend marked by decarbonization of sectors that are difficult to electrify directly, such as long-distance shipping, aviation, the chemical industry, or fertilizer production. In this context, Europe is emerging as one of the main potential destinations of the e-fuels that Uruguay aspires to produce.
La European Union has set very demanding climate targets and anticipates a growing demand for imports of green hydrogen and derivatives to achieve their emissions reduction targets. Countries with abundant renewable resources and institutional stability, such as Uruguay, are thus positioned to become strategic suppliers of clean fuels for the European market, which is looking for alternatives to traditional fossil fuels.
Uruguay's roadmap for green hydrogen specifically proposes the diversification of the production matrix and the generation of new high value-added exports, moving from selling raw materials to exporting technology and processed energyCollaboration with international companies like HIF Global is seen as a way to access capital, knowledge and markets which could hardly be achieved with local resources alone.
However, this strategy is not without risks: the sector requires very high investmentsComplex logistical infrastructure, clear regulations, and stable external demand are key factors. Furthermore, projects are subject to intense environmental scrutiny, both in terms of water and land consumption and visual impact, biodiversity, and waste management.
In the specific case of Paysandú, the challenge lies in demonstrating that it is possible to reconcile the export orientation towards markets such as the European one with the preservation of the Uruguay River environment and respect for binational rules. Only if these conditions are met can green hydrogen consolidate itself as a new pillar of the Uruguayan economy without permanently reigniting conflict with Argentina.
The progress of the hydrogen plant in Uruguay This has once again brought to the forefront the delicate balance between industrial development and environmental protection along a shared river with a history of conflict. While Montevideo sees Paysandú as a key stepping stone to joining the ranks of clean fuel exporters, Entre Ríos views the project's proximity to its shores with suspicion and is resorting to the courts to strengthen controls and procedures. Amid promises of multimillion-dollar investment, technical guarantees, and binational lawsuits, the project's future will depend on both countries achieving a balance. economic interests, ecological demands and social sensitivity without turning the Uruguay River back into a focus of prolonged confrontation.
