In early 2018, Chile announced that it will not build any new coal-fired power plants and will phase out the existing plant stock—which makes up 44% of electricity generation—by 2050. This is in line with current trends in Chile, where coal-fired power plant permitting has stalled in recent years in response to comparatively low costs of renewable energy. Chile’s revised energy sector planning, published in December 2017, already reflects this change, with no additional coal plants added beyond those under construction today. Renewables, in contrast, are expected to account for 56% of electricity generation in 2030.
The new planning documents also project lower economic growth rates than those cited in Chile’s NDC. Since Chile’s NDC is an intensity target, this drives down the emissions level resulting from the target: the change in GDP projections leads to an improvement of the CAT rating from “Critically Insufficient” to “Highly Insufficient.”
The updated scenario under implemented policies is also a significant downward shift from earlier estimates, projected emissions in 2030 are now 28% lower than previously projected. If Chile follows this scenario, it will achieve its 2020 pledge and come close to meeting its unconditional NDC target.
Chile’s Nationally Determined Contribution (NDC) includes two emissions reduction targets for 2030 (one unconditional, one conditional), excluding LULUCF emissions, and additional targets for the forestry sector. The unconditional target is a 30% reduction of GHG emission intensity of GDP below 2007 levels by 2030, which is equivalent to 148% above 1990 and 38% above 2010 GHG emissions levels, excluding LULUCF. The conditional target (conditional on international financial support in the form of grants) is a 35–45% reduction of GHG emission intensity of GDP below 2007 levels by 2030, which is equivalent to 95–130% above 1990 and to 9–29% above 2010 GHG emissions levels, excluding LULUCF.
Chile also proposes to sustainably manage and recover 100,000 hectares of forest by 2030 and to reforest 100,000 ha (Government of Chile 2015), subject to approval of new laws. Chile is one of the few countries to separate the LULUCF sector target from other emissions, which increases the transparency of its proposed actions.
Under the Copenhagen Accord, Chile proposed to undertake Nationally Appropriate Mitigation Actions (NAMAs) to reach an emissions level 20% below business-as-usual (BAU) by 2020 (as projected from 2007). We rated this target “Insufficient.”
The changes in the energy supply sector are substantial compared to previous assessments, and are linked to the increasingly lower costs for renewable energy in Chile, particularly solar, in comparison to coal (Ministerio de Energía 2017b; IRENA 2015). Current solar PV and onshore wind costs in Chile are as low as USD 0.03/kWh to USD 0.04/kWh (IRENA 2018).
Chile is already expanding its renewable capacity and, as of December 2016, 52% of the generation capacity under construction was in non-conventional  renewable energy sources (Comisión Nacional de Energía & Ministerio de Energía 2017). Between 2014–2016 the share of electricity generation from non-conventional renewable energy increased by 4%—to 11% in 2016—which is a 59% increase (Comisión Nacional de Energía 2017).
 Chile defines non-conventional renewable energy sources as wind, solar, geothermal, biomass, tidal, and hydro up to 20MW.
Chile’s NDC includes two emissions mitigation targets for 2030:
Both of the GHG emission intensity targets do not include emissions or removals from the forestry sector. In its NDC, Chile proposes separate targets to address only this sector: a) sustainable management and recovery of 100,000 hectares of forest by 2030 with estimated emissions reductions of 0.6 MtCO2e per year from 2030 and b) commitment to afforest 100,000 hectares, with mostly native species, that are estimated to capture between 0.9–1.2 MtCO2e per year from 2030 (Government of Chile 2015). These targets are conditional on the approval of updates to the Native Forest Law and a new Forest Promotion Law, neither of which were in place as of February 2018.
In September 2016, one year after submitting its INDC, Chile became one of the last countries to sign the Paris Agreement.
Chile has proposed to undertake NAMAs to reach an emissions reduction of 20% below BAU including LULUCF in 2020 (as projected from 2007). We estimate this is an absolute pledged emissions level of 119 MtCO2e in 2020 excluding emissions from LULUCF. This is equivalent to an increase of 131% from 1990 GHG emissions levels excluding LULUCF.
We rate Chile’s NDC emission reduction targets for 2030 “Highly Insufficient,” an improvement on our previous rating (2017) of “Critically Insufficient.”
The “Highly Insufficient” rating indicates that Chile’s climate commitment in 2030 is not consistent with holding warming to below 2°C, let alone limiting it to 1.5°C as required under the Paris Agreement, and is instead consistent with warming between 3°C and 4°C: if all countries were to follow Chile’s approach, warming could reach over 3°C and up to 4°C. This means Chile’s climate commitment is not in line with any interpretation of a “fair” approach to the former 2°C goal, let alone the Paris Agreement’s 1.5°C limit.
If the CAT were to rate Chile’s projected emissions levels in 2030 under current policies, we would also rate it “Highly insufficient.”
Most effort sharing approaches lead to similar levels of emissions allowances for Chile. The upper end of the “Insufficient” range is determined by effort sharing approaches focusing on staged emissions reductions. To be in line with the most stringent approaches, which focus on capability, Chile would need even further emissions reductions.
In past assessments, CAT rated Chile “Critically insufficient.” The downward revision of GDP growth rates led to a decrease in the emissions level resulting from the NDC. The improvement of the rating is thus not related to a change of the NDC, but rather the revision of economic growth projections. Because of this link to GDP projections, Chile’s targets remain uncertain.
For further information about the risks and impacts associated with the temperature levels of each of the categories click here.
Between 1990 and 2013, Chile’s emissions increased by 112% from 52 MtCO2e to 110 MtCO2e, excluding LULUCF. Taking into account Chile’s current policies, we estimate that emissions will slightly decrease and level out to reach 109 MtCO2e per year in 2020 excluding LULUCF, which represents a 111% increase above 1990 levels, and 18% increase above 2010 levels. Thereafter, we project that emissions will ramp up, climbing to 132 MtCO2e in 2030 (156% above 1990 levels and 43% above 2010 levels) excluding LULUCF. Under currently implemented policies, Chile will not meet its NDC targets yet, but will be close to meeting its unconditional target. This statement is line with the recently published GHG Mitigation Plan for the Energy Sector (Ministerio de Energía 2017a).
Chile’s overarching Climate Action Plan 2017–2022 guides mitigation actions. It intends to advance mitigation measures by maintaining the national GHG inventory, developing policy, implementing MRV systems, and fulfilling Chile’s international targets (Government of Chile 2016a).
In early 2018, Chile’s Ministry of Energy agreed with major utilities to cease the construction of new coal power plants that do not incorporate CCS technologies. This agreement also included an aim to phase out coal by 2050. While the details for the phase-out have yet to be specified, it is clear that this will mean a substantial deviation from today’s situation: in 2016 coal had a 44% share of electricity generation (Comisión Nacional de Energía & Ministerio de Energía 2017). The decision to curb the construction of new coal power plants is in line with the renewable energy cost reduction trend seen over recent years in Chile (IRENA 2015; IRENA 2018). Cost reductions, rather than policy implementation, have led to higher implementation of renewable energy in Chile in recent years. The cost of renewable energy technologies in Chile is expected to keep declining (Ministerio de Energía 2017b). Currently there are 15 coal-fired power plants, an installed capacity of 5.1 GW, in operation in Chile. A unit for the Mejillones plant, equivalent to 0.4 GW or 7% of total installed capacity, is under construction(Global Coal Plant Tracker 2018).
The Ministry of Energy has recently published two different projections for Chile´s energy sector: the GHG Mitigation Plan for the Energy Sector (Mitigation Plan ) and the Long-Term Plan for the Energy Sector (Long-Term Plan) (Ministerio de Energía 2017a; Ministerio de Energía 2017b). While the Long-Term Plan provides a bottom up approach of how Chile’s energy production can look in the future under different energy mixes, the Mitigation Plan projects emissions from the energy sector based on policies and does not specify Chile’s projected energy mix.
Notably, the Long-Term Plan´s current trend scenario already takes into account the halt to building new coal plants except those already under construction. Less clear is the role of gas which, under the Long-Term Plan, plays no role in the near future, but is ramped up in the longer term. In a Paris Agreement-compatible pathway, however, gas should only play a minor role (Cantzler et al. 2017). A quick estimate of the emissions from the Long-Term Plan based on its current trend scenario, using historical emission factors from IEA, results in an average of 17 MtCO2e/y, 40% less than projected by the Mitigation Plan.
Our analysis on the energy sector is based on the Mitigation Plan’s current policies scenario, which was developed in the context of Chile’s National Energy Policy towards 2050 (Energy Plan 2050 hereafter). These projections include a breakdown of the energy sector subsectors (i.e. transport, mining, electricity generation, transport, and commercial & residential), the recently implemented carbon tax, policies stipulated in Chile’s National Action Plan on Climate Change 2017–2022, as well as more conservative GDP projections than in previous studies.
Chile’s Energy Plan 2050 sets long-term goals for electricity generation, planning to reach 60% generation from renewable sources in 2035 and 70% in 2050 (Ministerio de Energía 2015). This plan builds on the Non-Conventional Renewable Energy (NCRE) Law, which aims to reach 20% of generation from non-conventional renewable energy sources by 2025. Notably, the targets in the Energy Plan include generation from large hydro (which accounted for 24% of generation in 2016), whereas the NCRE law excludes large hydro. The construction of large hydro projects in Chile is highly controversial, largely because of significant adverse environmental and social impacts. In 2014, Chile’s government overturned environmental permits for HidroAysén, a massive hydroelectric project in Patagonia, after a seven year campaign against - the largest environmental campaign in Chile’s history (NRDC 2016). It is not clear which share of large hydro is considered in Chile’s Mitigation Plan.
Making progress towards the non-conventional renewables goal, in 2016, 11% of generation was from non-conventional renewable sources, and 52% of the generation capacity under construction was NCRE (Comisión Nacional de Energía & Ministerio de Energía 2017). In 2016, 44% of electricity generation was still from coal (Comisión Nacional de Energía & Ministerio de Energía 2017).
Additionally, Chile has implemented a carbon tax of 5 USD/tCO2 for stationary sources (turbines or boilers above 50 MWth), which came into effect in 2017. Payments will begin in April 2018.
From 2010 to 2013, the government implemented several policies on appliance labelling, energy efficiency, fuel efficiency standards and electricity infrastructure. Policies that stand out are the Energy Efficiency Seal (2013) and Energy Efficiency Action Plan 2012–2020 (Ministerio de Energía 2013), which aims to set a suitable legal framework for energy efficiency implementation across different sectors towards a 15% energy efficiency improvement by 2025. The Energy Efficiency Action Plan is part of the government’s Energy Agenda.
The Energy Agenda 2014–2018 supports the targets in the NCRE law and proposes additional policies that may contribute to further emissions reductions, such as implementing energy management systems on major energy consumers, efforts to decouple energy consumption from revenues in SMEs, and commitments from the federal administration to reduce energy consumption from the public sector. Additional policies promote geothermal and solar development, particularly in households (Government of Chile 2016a).
Chile is the world’s leading copper exporter, and the mining and industry sector is Chile’s largest consumer of both total final energy (39% in 2015) and electricity (Comisión Nacional de Energía & Ministerio de Energía 2017).
The main agreement between the government and the mining industry regarding energy efficiency is the “Cooperation Agreement”, under which mining companies should look for ways to use energy more efficiently, and the Ministry of Energy should support them (Government of Chile 2016b).
Chile is considering an energy efficiency law that would possibly be legally binding for industry, but so far, any mitigation action in the mining and industry sector has been driven by private enterprises (Government of Chile 2016b). Additional policies within this sector would be important for Chile to reduce its emissions (Ministerio de Energía 2017a).
Under current policies, emissions from the mining and industry sector are projected to reach 21.4 MtCO2e per year in 2030, 24% increase compared to emissions from 2015 (Ministerio de Energía 2017a).
In 2015, the transport sector accounted for 35% of total final energy consumption in Chile, second to industry (Comisión Nacional de Energía & Ministerio de Energía 2017). In the same year, the government introduced the “Green Tax” on motorised vehicles, which applies to new vehicles, and is intended to incentivise more efficient vehicles. Chile also has a vehicle labelling programme (Government of Chile 2016a) and has set maximum emission standards for new imported vehicles (Ministerio de Energía 2017a).
Under current policies, emissions from the transport sector are projected to reach 33.4 MtCO2e per year in 2030, a 43% increase from 2015 (Ministerio de Energía 2017a).
The buildings sector was the third largest consumer of final energy in 2015, accounting for 21% of consumption (Comisión Nacional de Energía & Ministerio de Energía 2017). Chile pursues a National Strategy for Sustainable Buildings, which includes energy, water, waste and health goals. The government also incentivises energy efficiency in public buildings (Government of Chile 2016a). Under the law no. 20.571/2016, Chile aims to incentivise the use of solar heating through tax cuts for developers who implement this technology (Ministerio de Energía 2017a).
Emissions from the buildings sector are projected to reach 9.5 MtCO2e per year in 2030 under current policies, a 61% increase compared to emissions in 2015 (Ministerio de Energía 2017a).
The LULUCF sector has been a sink of around 30–45 MtCO2e in the period from 1990 to 2013. This sink was equal to 36% of Chile’s emissions in 2013. Chile’s NDC references two planned policies, which were not yet in place as of February 2018: updates to the Native Forest Law and a new Forest Promotion Law. These laws would reduce emissions from the forestry sector by reducing deforestation and increasing the sink through forest management, conservation, reforestation, and afforestation (Government of Chile 2016a).
 The relation between these two documents is unclear to the CAT at this point in time.
Historical emissions from 1990 to 2013 (using Global Warming Potentials from the IPCC Second Assessment Report) were taken from Chile’s Third National Communication, published in December 2016 (Government of Chile 2016b).
The 2020 pledge did not state a reference pathway, but specifically states that it will be a reduction from BAU as projected in 2007. We have therefore calculated Chile’s 2020 pledge using as reference the 2007 BAU scenario from Boston Consulting Group (2013). This pathway closely resembles the 2007 BAU presented by (Searle 2011) on behalf of the Chilean Government in the same context. As the pledge covers emissions including LULUCF, the emissions level resulting from the pledge is first calculated based on BAU emissions including LULUCF. Projected LULUCF emissions (Boston Consulting Group 2013) are then subtracted to arrive at the pledged emissions level excluding LULUCF, which is shown in the graph. The BAU shown in the graph excludes LULUCF.
Both targets presented in Chile’s NDC were quantified based on the GDP assumptions from the GHG Mitigation Plan for the Energy Sector (Ministerio de Energía 2017a), where they project an average 3% growth. The current policy projections are based on the same assumptions on GDP growth. Previous CAT analyses used higher GDP growth projections from the MAPS Chile project (Government of Chile 2014), which assumed an average 4.1% GDP growth per year up to 2030.
While the MAPS GDP projections are specifically mentioned in Chile’s NDC submission, we assume that the updated GDP numbers from the Mitigation Plan should be used for quantifying absolute emission levels resulting from the targets. Chile’s NDC intensity targets are very sensitive to the projected GDP growth assumptions. If a slightly higher GDP growth rate is used, the NDC target shifts up (less ambitious, allowing for more emissions) potentially resulting in Chile achieving both its NDC targets with the current policy scenario.
Current policy projections
In previous assessments, the CAT has based its current policy projections on the Energías Renovables No Convencionales (ERNC) scenario from the MAPS Chile project. This scenario was then adjusted to only include currently implemented policies. For this update, we have adjusted our analysis to include the projections from the Mitigation Plan, which is in line with the Energy Plan 2050. We estimate total emissions as the sum of the agriculture, waste and energy sector. The first two sectors are taken from MAPS Chile (Línea Base 2013, PIB medio) (Government of Chile 2014). The base year of the scenario is 2013, and it is based on macroeconomic projections from 2013 (medium case GDP growth) and includes implemented policies up until 2013. The energy sector projections are taken from the Mitigation Plan. Our analysis estimates that by following the current policies pathway presented on the Mitigation Plan, Chile will achieve its 2020 pledge, but not its conditional and unconditional NDC targets.
Boston Consulting Group (BCG) (2013). Inventario de emisiones de GEI 1990–2010, proyección de emisiones a 2040 y matrices de abatimiento de CO2 – Chile.
Cantzler, J. et al. (2017). Foot off the gas: increased reliance on natural gas in the power sector risks an emissions lock-in, Climate Action Tracker (Climate Analytics, Ecofys, NewClimate Institute).
Comisión Nacional de Energía & Ministerio de Energía (2017). Anuario Estadístico de Energía 2016.
Comisión Nacional de Energía (2017). Generación Bruta ERNC – Energía Abierta | Comisión Nacional de Energía
Global Coal Plant Tracker (2018). Coal Plants by Country (MW) - January 2018
Government of Chile (2014). MAPS Chile. Resultados de Fase 2.
Government of Chile (2015). Nationally Determined Contribution.
Government of Chile (2016a). Segundo Informe Bienial de Actualización de Chile sobre Cambio Climático.
Government of Chile (2016b). Tercera Comunicación Nacional de Chile ante la Convención Marco de las Naciones Unidas sobre Cambio Climático.
IRENA (2018). Renewable Power Generation Costs in 2017
Ministry of Energy Chile (2013). Plan de acción de eficiencia energética 2020.
Ministerio de Energía (2015). Energía 2050: Política Energética de Chile
Ministerio de Energía, 2017a. Plan de Mitigación de Gases de Efecto Invernadero para el Sector Energía
Ministerio de Energía (2017b). Proceso de Planificación Energética de Largo Plazo
NRDC (2016). Energía 2050: Política Energética de Chile.