Preheat your oven to 350°F (175°C). Spread the whole raw hazelnuts in a single layer on a baking sheet. Toast them in the oven for about 10 to 12 minutes, or until the skins begin to crack and the nuts are fragrant. Keep a close eye on them to prevent burning.
After removing the hazelnuts from the oven, transfer them to a clean kitchen towel. Wrap them in the towel and rub vigorously to remove as much of their skins as possible. Some skins may not come off, which is fine.
Let the hazelnuts cool to room temperature. Then, place them in a food processor or high-speed blender. Process on high until a smooth butter forms, scraping down the sides as necessary. This process can take several minutes, depending on the power of your processor. Traditionally products like Nutella are made with a “melanger” or wet grinder. Some folks in India may have one for making dosa and idli batter with, so if that’s you, use it for this! It will yield a smoother, richer butter than anything else.
Meanwhile, gently melt the vegan chocolate chips with the coconut oil. You can do this using a double boiler over low heat, or in a microwave-safe bowl in 20-second bursts, stirring between each burst. Stir the mixture until it is completely smooth.
Once the hazelnuts have turned into butter, add the melted chocolate and coconut oil mixture, unsweetened plant-based milk, powdered sugar, and salt to the food processor. If using, also add the vanilla and Frangelico or hazelnut extract. Continue to process for as long as it takes for the Nutella to become almost completely smooth. This will take about 90 seconds in a high-speed blender, or up to 5 minutes in a food processor.
Transfer the Vegan Nutella to a clean jar or container and let it cool to room temperature. It will thicken as it cools.
Store your Vegan Nutella in an airtight container at room temperature for up to 1 week or in the refrigerator for up to a month. If refrigerated, let it sit at room temperature for a bit before using it, as it will have firmed up when cold.