Power-to-X: Paraguay against the region, derivative by derivative

There is world demand that cables cannot serve: aviation needs SAF, shipping burns liquid fuel, fertilizers start from ammonia and high-temperature industry does not electrify. Decarbonizing those sectors takes clean molecules, and that is what Power-to-X (PtX) does: renewable electricity turned, via green hydrogen, into derivatives that do travel: ammonia, e-methanol, SAF. European mandates and Asian auctions already commit part of that purchase, and South America is competing to supply it.

What Power-to-X is and what each derivative demands

The chain has three links. Renewable electricity splits water into hydrogen and oxygen through electrolysis; that hydrogen then combines with nitrogen from the air to make ammonia, or with CO2 to make e-methanol and, with one more synthesis step, SAF; the derivative finally travels by ship or barge to its buyer. Each molecule demands different inputs, travels differently and has different buyers; the matrix sets them side by side:

Pure hydrogen stays for local use: liquefying it at -253 °C consumes 30 to 40 percent of the energy it carries (IRENA, 2022) and no distant buyer pays that toll. Ammonia is the one that already has named buyers in Asia: Japan aims at 3 million tonnes per year of hydrogen and ammonia by 2030 (METI, Basic Hydrogen Strategy, 2023), JERA has 20 percent co-firing already proven on a 1 GW coal unit (JERA, 2024) and in Korea the world’s first clean hydrogen power auction stands awarded since 2024, to an ammonia co-firing project with a 15-year contract (Ammonia Energy, 2024). It travels at -33 °C on LPG-type ships that already exist (DNV); for that same reason it is the segment where the most export hubs compete.

e-Methanol has shipping demand on its side: FuelEU Maritime has been in force since January 2025 and cuts the carbon intensity of marine fuel by 2 percent in 2025, reaching 80 percent by 2050 (EU Regulation 2023/1805), and Maersk has 24 dual-fuel methanol container ships on order, with the first already sailing (The Maritime Executive, 2023). SAF carries the most regulated demand of all: ReFuelEU sets 2 percent SAF in 2025, 6 percent in 2030 and a synthetic sub-quota of 1.2 percent from 2030 (EU Regulation 2023/2405), and ICAO’s CORSIA adds global pressure from 2024. Both demand sustainable CO2.

That is where the Paraguayan card weighs in. Fermentation at the ethanol plants emits CO2 that is nearly pure (95 percent or more) and biogenic, the cheapest in industry to capture: 0 to 35 dollars per ton (GAO via RFA, 2022). Paraguay produces around 510 million liters of ethanol a year (2024 figure, Biocap); an illustrative count with fermentation stoichiometry, about 0.76 kg of CO2 per liter, lands in the order of 380,000 tons per year, today mostly uncaptured. Even Haru Oni, the Chilean plant in Magallanes, synthesizes with biogenic CO2: the input that is scarce in the region’s desert hubs is vented here every day.

The ethanol plants lead, and behind them sits a cluster of biogenic sources with different purities and volumes. The sugar mills burn bagasse in their boilers, AZPA alone crushes 1.5 million tonnes of cane per harvest (UIP, 2026), with smaller grain dryers and rice mills behind, with no public figure; there the CO2 leaves mixed into the flue gas, and in diluted streams of that kind capture runs at 40 to 290 dollars per ton in power generation and steelmaking (GAO via RFA, 2022). Biogas from farms and meatpacking plants, like the digesters loaded with the effluents of 40,000 pigs in Naranjal (Itaipu, 2013), yields CO2 that comes out nearly pure once the methane is separated (IEA, 2020), still in small, scattered volumes. And the source that changes the scale stands projected on the Paraguay river itself: Paracel has a pulp mill of 1.8 million tonnes per year planned in Concepción (Paracel via Argentina Forestal, 2026), with construction on hold waiting for the market (ABC, 2025); a kraft mill of that size emits about 2.7 tonnes of biogenic CO2 per tonne of pulp (IEAGHG, 2016), an illustrative count in the order of 4.9 million tonnes a year, though diluted in its boiler flue gas. The full cluster, purity against volume:

The regional board: each country’s card

With the molecules clear, here is the board: who holds the framework, who holds the route to sea and who holds the inputs.

The detail behind each row, country by country, with its sources:

• Chile: the political side is settled early: national strategy in force since 2020 (Ministry of Energy); on the technical side it is the only one already exporting: Haru Oni has operated in Magallanes since 2022 and has already shipped 100,000 liters of synthetic fuels to Europe and the United States (pv magazine, 2024).
• Brazil: the region’s most complete legal framework: Law 14.948/2024 defines low-carbon hydrogen (up to 7 kg of CO2eq per kg), names a regulator and adds tax incentives; on the economic side, over R$ 290 billion announced across 18 states (MME, 2024), with the Pecém port hub leading.
• Uruguay: politics and economics move together: roadmap in 2023 (MIEM), a target of US$ 2 billion per year by 2040 and a sector fund already financing the first projects; HIF has e-fuels announced for Paysandú (2023).
• Argentina: carries the biggest economic announcement: Fortescue, US$ 8.4 billion for Río Negro in 2021; the project remains in the study phase (Diario Río Negro, 2025) and on the legal side the space is open: no specific hydrogen law yet.
• Paraguay: the political framework has been in place since 2024: National Strategy for the Green Hydrogen Economy (MOPC with IDB support, 2024) and Law 7599/2025 for private generation from non-hydraulic renewables with sale to ANDE (BACN); on the technical side, projects are at the definition stage; its strong card sits in the ecological matrix.

The global picture cools the enthusiasm: announced projects would add up to 37 million tonnes per year of low-emissions hydrogen by 2030, but only 9 percent of that pipeline has reached a final investment decision, and what already operates or has investment decided reaches 4.2 million (IEA, Global Hydrogen Review 2025). What separates the announcement from the concrete is a firm buyer; that is why the decision crosses this board with each derivative’s demand mapped above.

The decision: which derivative and for which market

That ecological matrix is what no neighbor gathers in one place: firm hydropower from ANDE with a high plant factor against variable wind and solar, fresh water with no desalination, and the biogenic CO2 cluster led by the ethanol plants.

The electric card goes beyond that hydro. Law 7599/2025, with regulations in force since 2026 (La Nación), lets private players generate from non-hydraulic renewables and sell to ANDE under contracts of up to 30 years, on top of the independent generation that Law 3009/2006 already allowed. A PtX project can add dedicated solar of its own that cuts the cost of electricity during sun hours, use firm hydro as backup when there is no radiation, the backup other hubs solve with batteries, and sell ANDE the surplus the electrolyzer does not absorb.

The data: ANDE tariff and firm quota by time band, solar radiation and the cost of own solar with the ERNC reference tariff for the surplus, volume and purity of the CO2 at the nearest cluster source, the ethanol plant first, waterway freight by season and, on the buyer’s side, RFNBO and CBAM premiums in Europe, auction prices in Japan and Korea and the regional price of methanol and ammonia, all dated.

The technique: the model we propose is an optimization (MILP) loaded by destination market: it picks the mix between ANDE hydro and own solar, decides by time band how much solar feeds the electrolyzer and how much surplus is sold to ANDE, and compares the cost per ton delivered in the region, in Rotterdam and in East Asia, Paraguay against Chile, Brazil and Uruguay, derivative by derivative. The full map, inputs, model and outputs:

The decision: producing cheap counts when there is a firm buyer on the other side, and each market has a better-placed supplier. Asia sits on Chile’s side of the Pacific; Europe pays the RFNBO premium, applies CBAM to hydrogen, ammonia and fertilizers (European Commission) and its Atlantic route favors Brazil and Uruguay, with Paraguay entering through the waterway; methanol and ammonia for the region’s industry and agriculture, imported today, are Paraguay’s entry with the lowest toll. In ammonia the competition is against neighbors with ocean ports; in e-methanol and SAF the three cards together, firm power, water and biogenic CO2 in one place, weigh more than the port. Before committing capital: a dated purchase commitment, a firm contract with ANDE for the backup, the ERNC contract if there is own solar with surplus, contract and distance to the ethanol plant, the waterway’s draft and RFNBO certification of the power source.

How to measure it: this is how we design the dashboard: per derivative and destination market, cost per ton delivered in the region, in Rotterdam and in Asia against the cheapest competitor, together with the committed demand in force (mandates, fleets, auctions), updated with every new energy, CO2 and freight figure that enters the model.

This comparison is published to be argued with: if you read the traffic light differently, if you think the port outweighs the three cards together, or if you have a project or an investment looking at firm power, CO2 or the waterway, write to us and we will build the model with your data.