Chile expands carbon tax, eyes US$80/tonne by 2040, and approves first Article 6.2 project

Chile's carbon tax, introduced in 2017 and expanded in 2020, applies to facilities emitting over 25,000 tCO2e annually at a rate of US$5 per tonne, with indicative targets to rise to US$35/tCO2e by 2030 and US$80/tCO2e by 2040. Regulated entities compensated over 4.4 million tonnes of CO2 in 2024 using domestic credits from approved standards like Verra and Gold Standard, which must be less than three years old. The country has also approved its first Article 6.2 project, a biomass initiative with Switzerland, and established cooperation with Japan and Singapore for ITMO transfers. Chile is developing a national carbon registry and an Emissions Trading System to support its 2050 carbon-neutrality target. Non-compliance with the carbon tax can result in fines up to 5% of annual revenue or temporary activity suspension.