While China is taking its first steps with its public emissions market, Chile is working on an amendment to the regulations governing the so-called “green tax” that includes an emissions offset mechanism so that companies required to pay this tax can reduce their tax burden by financing sustainable projects in sectors not subject to the tax that reduce polluting emissions. The new regulations—which are currently open for public comment through early September (https://consultasciudadanas.mma.gob.cl/portal/consulta/109)— would take effect in February 2023 and open up opportunities for the Emissions Offset Projects Bank, created by Sofofa in 2017 to promote and develop sustainable projects for companies. This emissions offset mechanism provides the foundation for Chile to integrate into the global emissions trading system currently being developed under the Paris Agreement.

The “green tax” was created as part of the 2014 tax reform and took effect in 2017. It applies to both vehicles and stationary emission sources, with revenue from each category accounted for separately. In the case of stationary sources, US$175.2 million was collected in 2020, with 95% of that amount coming from thermoelectric power generation companies.