Ethanol Market Overview

  • There is currently no consumption or production of fuel ethanol in Chile.
  • MTBE is used as an oxygenate in the Chilean fuel supply. The U.S. exported 400 million liters of MTBE to Chile in 2017.
  • Production of first generation biofuels has been limited as there is no agricultural land available for the production of feedstocks. Second generation biofuels have found some support but none of the projects attempted so far have been successful.
  • Although ethanol blends of up to 5% are permitted, no fuel ethanol has been imported.

Key Facts

  • Mandate:
    2018  E5 target, not mandated
  • Consumption:
    2018  0 mn liters (0% blend)
  • Capacity:  Zero
  • Ethanol plants:  Zero


  • In 2008, fuel specifications were introduced to allow blends of up to 5% ethanol in gasoline, however, there is no mandate for blending or support for production or consumption of ethanol.
  • The main primary source of energy in Chile is crude oil, most of which is imported. The government has made steps to diversify their energy pool and increase the use of renewables.
  • As part of their commitment under the Paris Agreement Chile has agreed to reduce the CO2 emissions per unit of GDP by 30% compared to the 2007 levels.
  • To take steps toward this goal, Chile has a number of programs aimed at increasing the use of renewable energy in the country. Transport has been highlighted as a priority sector for the reduction of GHG emissions and although they have not announced specific plans to introduce ethanol mandates, the use of imported ethanol could help them reach their goal of lower emissions.


  • Chile imports small volumes of non-fuel ethanol from surrounding countries.
  • An import tariff of 6% is levied on ethanol imports except those from Less Developed Countries.


  • Policy support for ethanol has not been forthcoming historically even as the government has looked to diversify energy sources.
  • MTBE is the primary oxygenate used in finished fuel, imported from the U.S. Market development efforts need to address this issue.

Market Outlook

  • With no land available to produce ethanol feedstocks, Chile is not expected to domestically produce first generation ethanol.
  • A pathway for ethanol use exists in the Chilean fuel specifications, and there is potential to offset MTBE imports using ethanol.
  • Under the Paris Agreement Chile is taking steps to increase renewable fuel use.