Chile is considering the introduction of ethanol-blended petrol as part of efforts to lower fuel supply costs and reduce the impact of elevated international crude oil prices on government finances, Reuters reported.
Documents from the Ministry of Energy reviewed by Reuters indicate that the proposal involves adding 10% ethanol to gasoline. The government estimates that the move could reduce annual fuel supply costs by approximately $107 million.
The proposal comes as Chile continues to depend heavily on imported fuels. OPEC data cited by Reuters showed that the country imported about 181,000 barrels of crude oil per day in 2025. The recent increase in global crude prices has added further pressure to the country’s fuel supply system, making alternative fuel sources more relevant.
Under the proposed E10 system, gasoline would contain 90% conventional gasoline and 10% ethanol. Ethanol blending is already established in several Latin American countries and would allow Chile to replace part of the petroleum-derived component of gasoline with biofuel.
The proposed shift could also gradually reduce Chile’s reliance on methyl tert-butyl ether (MTBE), an additive used to increase gasoline octane levels. Ethanol can perform a similar role as a high-octane component.
Chile currently has no nationwide mandate requiring ethanol blending in gasoline. Reuters reported that limited domestic ethanol production and the lack of sufficient agricultural land to support large-scale production have been among the factors restricting the development of a domestic ethanol industry.
Introducing E10 would also require changes to the country’s fuel infrastructure. According to the Energy Ministry memorandum cited by Reuters, state-owned energy company ENAP would need to invest approximately $10.8 million to modify its refineries, terminals and storage facilities for handling ethanol-blended gasoline.
The transition could be introduced in stages. The ministry document also indicates that some of the investment could be offset by lower payments related to the carbon tax.
The U.S. Grains Council estimates that Chile could achieve a 10% ethanol blend and potentially increase the proportion to 15% by 2030.
Ethanol blending is also being considered as part of Chile’s broader strategy to diversify fuel supplies and reduce carbon emissions. The Energy Ministry published a roadmap in May outlining measures aimed at expanding supply options through 2030, with fuel blending included in the plans.
However, adopting E10 would not remove Chile’s dependence on imported fuels. The U.S. Grains Council, cited by Reuters, estimates that around 85% of the country’s gasoline supply currently comes from the United States, according to Reuters.
The Energy Ministry has acknowledged that ethanol could change the source of import dependence rather than eliminate it. Chile’s ethanol imports mainly come from Argentina, while Bolivia is another supplier.
As a result, the proposed E10 programme would primarily diversify the components used in gasoline and reduce the country’s direct exposure to fluctuations in international oil prices, rather than make Chile self-sufficient in fuel.
Ethanol blending is already widespread across Latin America, with Brazil representing the region’s most developed market. Brazil’s ethanol industry is estimated to be wort
