Taxonomy Roadmap for Chile

Taxonomy Roadmap for Chile

The report outlines different pathways for the Chilean Government to consider in creating a national green taxonomy and provides an overview of existing taxonomies, analysing its potential benefits and challenges. 




Image: Olga Stalska / Torres del Paine National Park, Chile


Sponsored by the International Climate Initiative (IKI), the "Taxonomy Roadmap for Chile" was prepared by the Climate Bonds Initiative in association with Chile's Ministry of Finance, the Green Finance Public-Private Roundtable (La Mesa) and the Inter-American Development Bank (IDB). The report provides an assessment on what the best approach may be for developing a national taxonomy.

Creating a national taxonomy can serve as a blueprint for making Chile's economy greener. Establishing clear green definitions could give Chile an advantage compared to other countries in the region to increase capital flows for sustainable projects. The report also describes various applications and users of the taxonomy, as well as opportunities and challenges for sustainable finance.

First-hand insights:

  • Priority sectors to address are Energy, Transport, Buildings, and Industry (mining).

  • The recommended pathway has three steps: to adopt, adapt and lead.

  • There is space for Chile to establish leadership in certain areas, including those that are not covered in the EU taxonomy such as mining and nature-based solutions. 

  • Climate change and other environmental indicators are recommended as the overarching objectives of a Chilean taxonomy. 

  • In addition to mitigation, the taxonomy would also benefit from developing criteria towards adaptation and resilience, considering the climate risks and adverse impacts on various sectors in the country such as water.

  • The world needs to decarbonise rapidly, and taxonomies can facilitate capital flows into sustainable investments


The State of the Sustainable Market in Chile:

Latin America overall represents 2% of total green bond issuances (by volume), which means USD 24.9bn. Chile has already issued USD 8.09bn in green bonds and it's the second country of the region with more issuances, just behind Brazil (USD 8.68bn). Chile has demonstrated excellent leadership through its international and national commitments to fight climate change. 

Chile’s updated nationally determined contributions (NDCs) set a goal of carbon neutrality by 2050. The country has also implemented several national policies, plans and pieces of legislation to achieve this goal. Rising global temperatures also have adverse effects on the ecosystems and population of Chile.

It is an opportunity for Chile to lead the initiative to develop the eligibility criteria for activities together with groups such as the International Platform on Sustainable Finance (IPSF) and other initiatives around the world. The primary focus of this sector should be mining for strategically important minerals that are required for a low carbon transition (e.g., Lithium, copper, etc.). 

On the assessment for key sectors in Chile:

The key sectors in Chile, such as Construction, Energy, Transport and Mining were analysed as examples to perform a basic gap assessment. Some of the key starting points for assessment and development of the taxonomy could be


  • The energy efficiency law that was approved in January 2021 mandates the rating system for all new buildings in Chile. The activities should include new construction as well as renovation of existing buildings, either residential or non-residential buildings.

  • Construction of energy-efficient buildings and implementation of renewable energy for new and existing buildings are important for the transition of this sector towards net-zero emissions and alignment with Chile’s climate goals.


  • Renewable energy activities such as solar and wind should have direct eligibility or easy criteria; that also applies to off grid electric and small grid with renewable energy generation.

  • Natural gas could potentially be used for the production of hydrogen and other purposes only as a transition activity subject to the implementation of full carbon capture and storage. The criteria however should include measurement of fugitive emissions throughout the life cycle.

  • To achieve Carbon Neutrality by 2050 the electrification of end-use technologies is key, both in fixed and mobile sources. Electromobility and related activities should be evaluated under the transport sector.


  • The energy efficiency law of Chile includes efficiency benchmarks for vehicles, provides incentives for electric vehicles and declares hydrogen as a fuel. The law also establishes benchmarks based on gCO2 per litre of fuel which should be translated to CO2/km for new vehicles sold in Chile.

  • Infrastructure required for low-carbon transport should be included in the taxonomy, as well as Zero-emission micro mobility such as bicycles, electric scooters, etc. should be directly eligible.

  • The electric and green hydrogen-based transport should be directly eligible for all modes of transport. In addition to meeting the thresholds, the activities should also have additional checks such as compliance with pollution control and circular economy laws to avoid harm to any other environmental objectives chosen.


  • The primary goal of this sector should be the mining for strategically important minerals that are required for transition (e.g., lithium, copper, etc.). The international taxonomies currently do not include the mining sector and there are no international references for the taxonomy.

  • For copper mining, the goal is to ensure that 94% of the energy consumption for surface mining and 82% of the energy consumption for underground mining will be provided by electricity and green hydrogen by 2050. For non-copper mining, the goal is that by 2050, at least 58% of the energy consumption will be by electricity. 

  • Due to the sector’s complexity, the criteria should evaluate options such as life cycle assessment or environmental impact assessments in addition to emission thresholds. 

The last word 

A sustainable classification system may facilitate the capital flows into sustainable activities and assets and act as guidance for climate-aligned investments and project development. In addition, it supports the correct assessment of climate-related risks for the financial sector. 

Climate Bonds released its first taxonomy in 2014 as a guide to aid the process of developing certification criteria for sectors and activities across the global economy. As the green bond market has grown, the concept of a taxonomy to avoid greenwash in this market took off.

The principal users of existing green taxonomies have been green bond issuers and investors, but they can also be used by other financial and non-financial entities. The EU started its taxonomy development process in late 2016. Other taxonomies are now being developed all around the world.  

In conclusion, Chile’s national taxonomy will help to establish a green investment roadmap and act as a blueprint for the country’s transition towards a green economy. If aligned with international taxonomies, it will help increase capital flows into green projects from international sources of capital.

We look forward to seeing further growth and development of green taxonomies around the globe. 


‘Til next time,

Climate Bonds Initiative


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