Argentina, Uruguay lag behind targets ahead of Cop 27

Rising emssions last year have cast doubt on the countries' ability to meet their climate goals, writes Lucien Chauvin

Argentina and Uruguay are heading to next month's UN Cop 27 climate conference in Egypt with new plans designed to offer reassurance that they can reach their climate targets, after CO2 emissions increased in both countries last year.

Argentina's CO2 emissions rose by almost 10pc last year compared with a year earlier, the first increase since 2018, according to independent research group Climate Action Tracker. Uruguay's emissions increased by 22pc over the same period to their highest since 2012, according to the industry, energy and mining ministry. But both countries insist that they are on track to decarbonise their economies and hit their targets for 2030.

Uruguay appears better placed than Argentina to comply with its plan to reduce emissions by 29pc by 2030 compared with 1990 levels, owing largely to its expansion of renewable energy capacity. More than 90pc of Uruguay's power generation comes from renewable sources, and state-run oil company Ancap is working on a licensing round for offshore wind projects to produce electricity for green hydrogen. The tender is planned for next year.

Uruguay's multi-pronged strategy for its participation in Cop 27 includes its $1.5bn sustainability-linked bond issued on 21 October, deputy industry, energy and mining minister Walter Verri tells Argus. Under bond conditions, Uruguay commits to reducing greenhouse gas emissions and preserving forests. The country would be penalised if it misses the targets, but the novelty of this bond is that Uruguay will be rewarded with better rates if it beats the targets, Verri says. "The bond is our newest achievement. We have one of the greenest energy grids in the world and are moving forward with green hydrogen," he says.

Argentina is working to reduce CO2 emissions by 18pc by 2030 compared with 1990 levels, but is behind schedule. It aims to generate 20pc of its electricity from renewables by 2025 under its energy transition strategy, but is likely to reach around 14pc by 2023.

Part of the reason for slow renewables development is the country's abundant fossil fuels — its Vaca Muerta formation is the second-largest unconventional gas reserve in the world. But transmission line constraints have also impeded progress in the sector. Argentina has excellent options for wind farms, national wind energy association president Hector Pagani says, but this would require the construction of transmission lines. "The highest potential for wind generation is in Patagonia, but getting electricity from there to high consumption areas is not easy," he says.

Transport duties

Both countries are prioritising the decarbonisation of their transport sectors, which are a large source of CO2 emissions. Transport accounts for 58pc of Uruguay's emissions, making it a key sector in the country's efforts to meet its climate goals this decade. Transport is also one of the largest sources of emissions in Argentina, accounting for 29pc of the total, just behind power generation with 30pc. Other energy-related processes account for 9pc.

The mayor of San Justo in the Argentinian province of Entre Rios, Nicolas Cuesta, says he is confident that Argentina will meet its emission targets. "Climate change is affecting Argentina's economy because it is affecting agriculture," he says. Cuesta is part of the Argentinian association of municipalities facing climate change (RAMCC) that was created in 2017 to provide technical assistance for climate action plans. The network will be part of Argentina's Cop delegation in Egypt. The group will push for compliance and monitoring of climate plans, as well as financing.

Argentina’s CO2e emissions per sector

Uruguay's CO2e emissions per sector