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Fuels in Uruguay: ANCAP's import and refining monopoly, biofuels and green hydrogen

Last verified: 2026-10-27 · Status: Stable

Import and refining of crude oil and its derivatives are an exclusive right of the State run by ANCAP, which also holds the alcohol and national fuel monopoly (Ley Nº 8.764 art. 1). Production and export of fuel ethanol and biodiesel are carved out of the monopoly; producers need Ministry of Industry authorisation and ANCAP must blend at least 8.5 percent domestic ethanol into gasoline (Ley Nº 18.195 art. 3, 6 and 13). Since Ley Nº 20.075 ANCAP may also produce, sell, import and export green hydrogen and its derivatives, but explicitly in free competition, so private hydrogen projects are not blocked by the monopoly.

USD figures use UYU 40.21 per US dollar, the BCU quotation for DLS. USA BILLETE on 27 October 2026; amounts in Unidades Indexadas (UI) use UYU 6.6792 per UI, the BCU quotation for 27 October 2026; amounts in Unidades Reajustables (UR) use UYU 1,940.77, the September 2026 value published by IMPO (Decreto Nº 229/026), the latest available on 27 October 2026. Conversions are for orientation only.

Key facts

Import and refining of crude oil and derivatives	Exclusive right of the State through ANCAP Ley Nº 8.764 art. 1 B), as of 2026-10-27 · in force
Minimum domestic ethanol in gasoline blend	8.5 % of blend volumeLey Nº 18.195 art. 6 (Ley Nº 19.996 art. 182), as of 2026-10-27 · in force
Biodiesel for own use and captive fleets	4000 litres per dayLey Nº 18.195 art. 14, as of 2026-10-27 · in force
IRAE exemption for registered biofuel producers	10 years from registrationLey Nº 18.195 art. 23 B), as of 2026-10-27 · in force
Green hydrogen and derivatives	Open to free competition; ANCAP may also participate Ley Nº 8.764 art. 1 (Ley Nº 20.075 art. 234), as of 2026-10-27 · in force

The rule

1. ANCAP was created to run the alcohol and national fuel monopoly and to import, rectify and sell oil and its derivatives. The State holds the exclusive right to import and export alcohols and national fuels, to import and refine crude oil and its derivatives, and to import and export liquid, semi liquid and gaseous fuels once State refineries produce at least 50 percent of the gasoline the country consumes.
Cost to do it: Not available to private parties; private firms participate as suppliers or contractors to ANCAP.
Example: A private trader cannot import refined diesel for resale on its own account under this monopoly. / Same in USD.Ley Nº 8.764 (ANCAP charter) of 15 October 1931, Art. 1 A), B) and C), 1931-10-15 official text · verified 2026-10-27

2. ANCAP has the additional purpose of producing, distributing, selling, importing and exporting green hydrogen and its derivatives (synthetic fuels, methanol, ammonia, liquid organic hydrogen carriers and others) under free competition.
Cost to do it: No monopoly fee or concession charge: private hydrogen projects compete with ANCAP.
Example: A private consortium may produce green ammonia for export without ANCAP holding exclusivity. / Same in USD.Ley Nº 8.764 art. 1 final paragraph, added by Ley Nº 20.075 art. 234, Art. 1, final paragraph, 2022-10-20 official text · verified 2026-10-27 · changed: Ley Nº 20.075 of 20 October 2022, art. 234, added green hydrogen and derivatives to ANCAP's purposes, expressly in free competition.

3. Prices of products that are not monopolised and that ANCAP sells are set by its board, which must immediately notify the Executive; within 30 days of receipt the Executive may, by reasoned decision, change those prices for the future. Contracts ANCAP plans for operations abroad need Executive authorisation.
Cost to do it: Not applicable to private parties.
Example: A price change by ANCAP for a non monopolised product can be modified by the Executive within 30 days. / Same in USD.Ley Nº 8.764 art. 3 F) as worded by Ley Nº 19.924 art. 317, and art. 3 M), Art. 3 F) and M), 2020-12-18 official text · verified 2026-10-27

4. Production and export of fuel ethanol and biodiesel are excluded from the ANCAP monopoly, and domestic sale is allowed to the extent the law provides. Fuel ethanol or biodiesel for consumption in Uruguay must be produced from national agricultural raw materials, although the Executive may temporarily exempt this. Producing biofuels requires, besides other permits, authorisation from the Ministry of Industry, Energy and Mining, which keeps the register.
Cost to do it: No authorisation fee is set by the law.
Example: A sugar cane ethanol plant may sell to ANCAP or export without limit on volume (art. 16). / Same in USD.Ley Nº 18.195 (Biofuels Law) of 14 November 2007, Art. 3, 4, 5 and 13, 2007-11-14 official text · verified 2026-10-27

5. ANCAP must incorporate fuel ethanol produced in Uruguay from national raw materials in a minimum of 8.5 percent of the total volume of the blend of ethanol and automotive gasoline sold domestically, and ANCAP does the blending. The former biodiesel blend obligation (art. 7) was repealed by Ley Nº 19.996. Blending costs are passed to tariffs unless the Executive sets other compensation, and the Executive may change the targets on stated grounds.
Cost to do it: Cost passed through fuel tariffs (art. 9).
Example: For 1,000,000 litres of blended gasoline sold, at least 85,000 litres must be domestic ethanol. / The rule is volumetric; no USD amount applies.Ley Nº 18.195 art. 6 and 8 as worded by Ley Nº 19.996 art. 182 and 184; art. 7 repealed by Ley Nº 19.996 art. 183, Art. 6 to 10, 2021-11-03 official text · verified 2026-10-27 · changed: Ley Nº 19.996 of 3 November 2021 reworded the ethanol mandate to a minimum of 8.5 percent of blend volume, made ANCAP the blender and repealed the biodiesel blend obligation.

6. Biodiesel plants may supply ANCAP or export, and may use up to 4,000 litres a day for own consumption and captive fleets; the Executive may change that limit with six months' notice. Biodiesel blends may only be made by the owner or operator of the captive fleet and may not be sold to third parties. Ethanol plants may produce without volume limit for ANCAP and export, although the Executive may require a special export permit for supply security. Sales to the general public follow the distribution rules for petroleum fuels.
Cost to do it: No fee set by these articles.
Example: At the 4,000 litre daily cap, a captive fleet may use up to 1,460,000 litres of biodiesel a year. / The cap is volumetric; no USD amount applies.Ley Nº 18.195, Art. 14, 15, 16, 18 and 19, 2007-11-14 official text · verified 2026-10-27

7. Biodiesel has the tax regime of gasoil and fuel ethanol that of gasoline, and the Executive may exempt domestic biofuels from taxes. Producers in the Ministry register may obtain an exemption of 100 percent of IRAE for 10 years from registration and an exemption from net worth tax on qualifying fixed assets, without prejudice to Ley Nº 16.906 investment benefits. The national biodiesel IMESI exemption was granted for 10 years from the law's promulgation on 14 November 2007.
Cost to do it: IRAE exemption for 10 years from registration (art. 23 B).
Example: A registered biodiesel producer with taxable profit of UYU 80,420,000 would save IRAE of UYU 20,105,000 a year at the 25 percent rate while the 10 year exemption runs. / On US$2,000,000 of profit, US$500,000 of IRAE a year.Ley Nº 18.195, Art. 20, 21, 22 and 23, 2007-11-14 official text · verified 2026-10-27

Activity	Open to private investors?	Norm
Import and refining of crude oil and derivatives	No, State exclusive through ANCAP	Ley Nº 8.764 art. 1 B)
Fuel ethanol production and export	Yes, with Ministry authorisation	Ley Nº 18.195 art. 3 and 13
Biodiesel production for ANCAP, export, own use or captive fleets	Yes, with Ministry authorisation; 4,000 litres a day for own use	Ley Nº 18.195 art. 13 and 14
Green hydrogen and derivatives	Yes, free competition	Ley Nº 8.764 art. 1 (Ley Nº 20.075 art. 234)
Hydrocarbon exploration	Only as ANCAP contractor	Código de Minería art. 72

What private investors can do in fuels

Worked example

Ethanol mandate: of every 1,000,000 litres of blended gasoline sold in Uruguay, at least 85,000 litres must be ethanol made in Uruguay from national raw materials (Ley Nº 18.195 art. 6).
Biofuel tax holiday: a newly registered ethanol producer with taxable profit of US$2,000,000 (UYU 80,420,000) a year pays no IRAE on it for 10 years from registration, saving US$500,000 (UYU 20,105,000) a year at the 25 percent rate (Ley Nº 18.195 art. 23 B; T.O. 2023 Title 4 art. 23).

Step by step

1. Decide the product: ethanol, biodiesel, or green hydrogen and derivatives (the oil value chain itself is reserved to ANCAP).
2. Apply for Ministry of Industry, Energy and Mining authorisation and registration as a biofuel producer (Ley Nº 18.195 art. 13).
3. For ethanol or biodiesel sold domestically, secure national agricultural feedstock (art. 5) and an offtake with ANCAP, or plan exports.
4. Register to start the 10 year IRAE exemption clock (art. 23) and check COMAP investment incentives on the investing pages.
5. Hydrogen projects: no monopoly applies, but check environmental authorisation, land rules and power supply on the regulation and electricity pages.

Common traps

The biodiesel IMESI exemption ran for 10 years from 14 November 2007, so it is no longer available on its original terms (Ley Nº 18.195 art. 22).
Biodiesel blends may not be sold to third parties; only the captive fleet owner or operator may blend (Ley Nº 18.195 art. 15).
Domestic sale of biofuels requires national agricultural raw materials unless the Executive grants a temporary exemption (art. 5).
The Executive may require a special export permit for biofuels for supply security reasons (art. 18).
The biodiesel blend obligation was repealed; do not plan on mandatory domestic biodiesel demand (Ley Nº 19.996 art. 183).

Sources

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