Uruguay and Argentina seek to stop the green hydrogen plant repeating the pulp mill conflict

The governments of Uruguay and Argentina are working to keep tensions low regarding the green hydrogen and synthetic fuel plant that HIF Global intends to build in Uruguay's Paysandú department, along the Uruguay River. After President Yamandú Orsi's statement, Argentina made three consecutive denials. The project, valued at approximately $5.4 billion and touted as the biggest foreign investment in Uruguay's history, aims to generate synthetic fuels from renewable energy-driven green hydrogen, with around 3,000 direct jobs created in the initial phase worth about $1 billion.

Initially located three kilometers from Colón city in Entre Ríos, Argentina raised concerns about the visual impact and waterway pollution. Following bilateral talks, including two meetings at Uruguay's foreign ministry, the parties decided to move the plant to a state-owned Ancap site. President Orsi announced on Friday that Argentina had withdrawn its criminal complaint, but Argentine federal prosecutor Josefina Minatta stated she would not withdraw hers, as Uruguay has not provided requested information on potential contamination.

Deputy Guillermo Michel confirmed that his civil action and Uruguay's preventive action are ongoing. Uruguay's presidency secretary, Alejandro Sánchez, attributed the situation to a misunderstanding, stating that what had been dropped was a submission by Colón's deputy mayor to the support committee of the Escazú Agreement, a regional treaty on environmental information.

Colón municipality countered that it never filed a complaint but only sought access to the Uruguayan case file, which it received and used to withdraw from further consultations on August 25. Sánchez emphasized that a bilateral treaty governs the use of the Uruguay River, but decisions on national territory are sovereign; "There is no Argentine judge who can impose sanctions on Uruguay or set the rules of the game for it."

Both governments aim to prevent a repeat of the Fray Bentos pulp mill conflict, which caused blockades, protests, and an International Court of Justice case between 2005 and 2010. The commercial agreement is still open, with unresolved issues regarding infrastructure ownership, investment division, and the price of electricity from the state utility UTE.