Chile progresses with climate goals ahead of Cop 27

  • Market: Electricity, Emissions, Hydrogen
  • 26/10/22

Chile is pulling out all the stops to boost its climate profile ahead of the key UN conference, writes Emily Russell

Chile will head to the UN Cop 27 conference in Egypt next month at the forefront of Latin American efforts to address climate change. Leftist president Gabriel Boric has pledged to accelerate a "just" energy transition under an "ecological" government that includes climate considerations at the heart of decision making.

The government's decarbonisation plan seeks to double renewable power generation by 2030and turn Chile into a green hydrogen powerhouse. The country's green hydrogen strategy, launched under the administration of centre-right president Sebastian Pinera, who left office in March, will be showcased in Egypt, where Chile expects to sign financing agreements with the World Bank and Inter-American Development Bank to boost the fledgling industry.

Chile's climate change law came into force in June, making it one of 18 countries to legally bind itself to achieving carbon neutrality by 2050. It requires key government ministries to have climate and adaption plans, and for sectoral greenhouse gas emissions limits to be set, with sanctions for non-compliance. "The law will make a very important change to the entire state at the central level and then in all regions and municipal districts," environment minister Maisa Rojas says.

Chile published its long-term climate strategy in 2021. Current efforts are focused on adding 25-30GW of non-conventional renewable energy (NCRE) capacity — which excludes large-scale hydropower — to Chile's total generation capacity of 30GW by 2030 to speed up the closure of the country's coal-fired plants. A government bill would require 40pc of power generators' sales to come from NCRE by 2030, up from 20pc at present, and establish NCRE quotas at night to support long-duration storage systems such as concentrated solar power or pump storage.

NCRE already accounts for 35pc of the national generation mix. Another 3.73GW of solar and 712MW of wind farms are under construction. The challenge is to reduce delays to environmental permitting and ease transmission from the north to the densely populated centre of the country. Congress recently passed a law promoting investment in stand-alone energy storage, which will alleviate grid congestion. Separately, it also last month approved a solid biofuels law to tighten firewood and pellet standards to reduce pollution, mainly in the south.

In the transport sector, the government is adding 1,000 electric buses to Santiago's transport system, more than double the 800 in circulation, and promoting electric taxis. The national electric vehicle strategy, launched in October 2021, aims to end sales of most internal combustion vehicles in 2035, and all by 2045.

Taxing plan

Chile plans to create a carbon certification market next year and increase its low $5/t carbon tax to at least $35/t, as well as potentially expand other fossil fuel taxes. The creation of a national lithium company is also in the works.

Chile, along with Germany, will play a leading role at Cop 27 in talks aimed at obtaining agreements from richer nations to help developing countries fund restitution for extreme weather events, such as flooding and famine. The country will also present its plan for climate change adaption and methane gas reduction. Chile signed the global methane pledge at Cop 26 in Glasgow last year, committing to reducing global methane emissions by 30pc by 2030 from 2020 levels.


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