Latin America's top economies raise the game in renewable power

According to the “Benchmarking Latin America energy markets” report from Wood Mackenzie, Latin America is making progress in reducing its carbon emissions and adopting more sustainable energy sources. However, it still has a long way to go to meet global climate goals. 

The analysis focuses on the six largest economies in the region by GDP that have more noticeable advances in this field: Brazil, Mexico, Argentina, Colombia, Chile and Peru. “These countries share broad structural similarities: reliance on fossil fuels and minerals exports, increasing urbanisation, and growing energy demand,” said Gerado Bocard, research analyst at Wood Mackenzie. 

Fossil fuels: Where there’s room to grow 

Fossil fuels remain an important source of energy; however, the selected countries have been working on reducing their dependence on them. Brazil is leading this commitment, and it’s expected to drop its use to 49% by 2050; Mexico remains heavily reliant on fossil fuels with its share declining modestly from 95% to 86% by 2050.

Renewable energy sources bring high expectations 

Chile has made significant progress in renewable energy sources, which accounted for 70% of its electricity by the end of 2024; positioning it as a leader in clean energy adoption across Latin America. Some countries, such as Brazil and Colombia, have expanded the use of hydro power, while nuclear energy plays a minor role, present only in Mexico, Argentina and Brazil. Across the region, solar, wind, and biofuels are seeing a significant increase, harnessing rich natural resources.   

The promise of green hydrogen and CCUS  

Across the region there are 167 low-carbon hydrogen, and 58 carbon capture, utilisation and storage (CCUS) projects announced. Brazil is leading with 43 projects, including 24 Mt CCUS capacity in operation and 11.5 Mt under development. Latin America is experiencing a surge in green hydrogen initiatives at different phases of progress. Currently, 82 projects are actively running, predominantly in Chile, Brazil, and Argentina. Additionally, numerous other projects have been declared and are at various stages of advancement throughout the region. 

These developments highlight the diverse approaches taken by different countries in the region. “We can see how some of these countries obtain benefits from larger domestic markets while others rely on external influences such as import and export for different commodities” commented Bocard. “However, despite the progress, there's still work to be done to have a sustainable and resilient energy future, collaborative efforts,  targeted policies and investments will be crucial in achieving net-zero goals”, said Gerardo Bocard.