10th Strategic Dialogue of the Carbon Market Platform - Isabella Villanueva-García

Presentation from the 10th Strategic Dialogue of the Carbon Market Platform

1. October 2025
REFLECTIONS ON CHILE’S OPPORTUNITIES IN
SCALED-UP CREDITING APPROACHES
CHALLENGES AND PERSPECTIVES
Isabella Villanueva-García
Head of Planning and Climate Change Unit
Strategic Planning and Sustainable Development Division
Ministry of Energy
10
th
ANNUAL STRATEGIC DIALOGUE OF THE CARBON MARKET PLATFORM

2. ENERGY SECTOR AND CARBON CREDITS
State-of-Art in Chile
ENERGYSECTOR
Sectorwiththehighestemissionsandresponsibilityforreducingemissions.Theuseofcarboncreditshas
beenproject-based,butweseeopportunitiestoscale-up.
TheMinistryofEnergyhashighlightedtheroleofcarboncreditsinitspolicies.
ROLEOFCARBONMARKETSINTHESECTOR
1.Carbontax:Operationalsince2017.Generation(Powersector)andindustriesmaincoveredsectors.
5USD/tonCO2.
2.Offsetssystem(Undercarbontax):Projects→renewablegenerationsystemswithlessthan5%
installedcapacityintheNationalElectricSystem+self-consumption+systemssmallerthan1.5MW+
storagesystems
3.Article6ofParisAgreement:MinistryofEnvironmentdevelopedaspecificregulationunderClimate
ChangeFrameworkLaw.Identificationofprojects(Typologies)persector→PrioritiesfortheMinistry
ofEnergy,amongothers:
▪2030:Conversion/retrofittingofcoal-firedpowerplants;Storage(BESS);MediumSystems(Outof
SEN);Energyefficiencyandreplacementofboilersinindustries.
▪Post2030:Sustainablefuelsandrenewablehydrogen;electrificationoffinalconsumptions.
4.Underdevelopment:Emissionstandardsandcertificates(FrameworkLawonClimateChange).
EmissionsTradingSystemfortheEnergySectorPilot(PMI–WB).
MINISTRY OF ENERGY | 2

3. OPPORTUNITIES TO SCALE-UP IN THE ENERGY SECTOR
Potentialrole for project-based v/s higher-level crediting approaches in Chile in the future
MINISTRY OF ENERGY | 3
Source: National GHG Inventory, Ministry of Environment (2024).

4. CLIMATE CHANGE FRAMEWORK LAW
Carbon neutrality and instruments
MINISTRY OF ENERGY | 4

5. CLIMATE CHANGE FRAMEWORK LAW
Carbon neutrality and instruments
Carbon Budget 2020-2030
1.100 MtCO2e
Ministry of Energy
267,5 MtCO2e →Mitigation effort: 38,9
MtCO2e (Ref. Esc. 306,4) = 68%
Energy Efficiency
Renewable Energy
E-Mobility
Renewable Hydrogen
Additional Forest
Capture
Capture from Forest
Sector
Reference scenario
Carbon neutral scenario
MINISTRY OF ENERGY | 5

6. CLIMATE CHANGE FRAMEWORK LAW
Carbon neutrality and instruments
Carbon Budget 2020-2030
1.100 MtCO2e
Ministry of Energy
267,5 MtCO2e →Mitigation effort: 38,9
MtCO2e (Ref. Esc. 306,4) = 68%
Energy Efficiency
Renewable Energy
E-Mobility
Renewable Hydrogen
Additional Forest
Capture
Capture from Forest
Sector
Reference scenario
Carbon neutral scenario
MINISTRY OF ENERGY | 6

7. POWER GENERATION PROJECTIONS
Forecasting from Long-Term Energy Planning
Source: Long-term Energy Planning (carbon neutral scenario), 2024.
0
20
40
60
80
100
120
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
TWh
Storage
Concentrated Solar Power
Solar Photovoltaic
Land-based Wind
Hydro
Geothermal
Biomass
Diesel
Natural Gas
Coal
Historical
Projected
1998-1999:
Severe draught
2004:
Natural gas supply cuts
2013-2014:
Renewable take-off
MINISTRY OF ENERGY | 7

8. FINAL CONSUME PROJECTIONS
Forecasting from Long-Term Energy Planning
Source: National Energy Balance y Long-Term Energy Planning. Ministry of Energy.
MINISTRY OF ENERGY | 8
Historical
Projected
Final consumption of energy, observed 2022 Final consumption of energy, projected 2040
Fossil fuels
64%
Biomass
14%
Electricity*
22%
Fossil fuels
46%
Electricity*
36%
Biomass
7%
Renewable
hydrogen
7%
* 56% renewable * 98% renewable