Chile is studying the incorporation of an ethanol-E10 gasoline blend as part of a strategy to reduce fuel supply costs and limit the impact of high international oil prices on public finances.
According to Ministry of Energy documents reviewed by Reuters, the proposal contemplates blending 10% ethanol with gasoline. The change could generate savings of approximately $107 million annually in fuel supply costs for the government.
Chile Analyzes E10 Gasoline Amid Rising Oil Prices
Currently, Chile maintains a strong dependence on imported fuels. OPEC data cited by Reuters indicates that the country imported approximately 181,000 barrels of crude oil daily during 2025.
Furthermore, the recent escalation in crude oil prices has increased pressure on the local fuel system. Brent surpassed $105 per barrel, according to information included in the consulted source, compared to levels near $73 before the conflict mentioned by Reuters.
For this reason, the use of ethanol appears as an alternative to diversify supply and partially reduce exposure to international oil market variations.
What is the E10 Blend Chile is Studying?
E10 gasoline contains 90% gasoline and 10% ethanol. This type of fuel has been used for years in different Latin American markets and allows for replacing a portion of petroleum-derived components with a biofuel.
In the Chilean case, the measure would also allow for a gradual reduction in the use of MTBE, an additive employed to increase gasoline octane.
Chile does not yet have a national mandate to blend ethanol with gasoline. Reuters notes that one of the main reasons has been the limited local production of this biofuel and the lack of sufficient agricultural land to sustain a large-scale national industry.
ENAP Would Need to Adapt Its Infrastructure
The eventual implementation of E10 gasoline would also require modifications to the country’s energy infrastructure.
According to the Ministry of Energy memorandum cited by Reuters, the state-owned company ENAP would have to invest approximately $10.8 million to adapt refining facilities, terminals, and storage systems.
The transition could be carried out gradually. Part of the investment could also be offset by lower payments associated with the carbon tax, according to the document cited by the agency.
Likewise, the U.S. Grains Council considers that Chile could achieve a 10% and even 15% ethanol blend by 2030.
Ethanol Could Reduce MTBE Use
One of the technical effects of the new blend would be the progressive substitution of MTBE in gasolines marketed in Chile.
Ethanol can fulfill a similar function as a high-octane component and at the same time be part of the official strategy to diversify fuel sources.
In May, the Ministry of Energy published a roadmap aimed at expanding supply options and reducing carbon emissions by 2030. Fuel blends are part of that planning, according to information reviewed by Reuters.
Chile Would Still Depend on Imported Fuels
The incorporation of ethanol would not eliminate the country’s external dependence.
According to the U.S. Grains Council cited by Reuters, Chile currently obtains approximately 85% of its gasoline supply from the United States. The Ministry of Energy itself acknowledged in its memorandum that using ethanol could substitute one import dependency for another.
Chilean ethanol purchases primarily come from Argentina and secondarily from Bolivia.
Therefore, the main change would be to diversify the components used in gasoline and partially reduce direct exposure to oil prices, rather than achieving complete energy independence.
Ethanol Blends Gain Ground in Latin America
The use of ethanol blended with gasoline is already widespread in several countries in the region.
Brazil is the most developed case. Its ethanol market reaches an estimated value of $20 billion and boasts a large fleet of flex-fuel vehicles capable of using fuels with ethanol proportions exceeding 30%.
For Chile, the adoption of E10 would represent a significant modification to its gasoline supply scheme. However, the information provided by Reuters does not yet establish a definitive date for its implementation and notes that the Ministry of Energy did not respond to inquiries about the transition timeline.
Source: Reuters
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