Chilean Carbon Market: Green Tax, Offsets and the Voluntary Program
In October 2025, our Growth & Partnerships Lead, Oksana Zheleznova, participated as a speaker at the Chile Carbon Forum in Santiago, joining government officials, project developers, and corporate sustainability leaders. She brought back valuable insights into one of Latin America’s most dynamic and fast-evolving carbon markets.
Chile is often cited as a regional climate leader—and for good reason.
The country is implementing a structured climate framework, building a national carbon registry, preparing an Emissions Trading System (ETS), and strengthening domestic offsetting rules to support its 2050 carbon-neutrality target. Below is an overview of how Chile’s system works today, what’s coming next, and why the market is attracting growing interest from international players.
How Chile’s Carbon Market Works
Chile operates a regulated carbon pricing system that combines:
a carbon tax applied to large emitters, and
a compliance offset mechanism, which allows the obligation to be met by purchasing and retiring eligible carbon credits from domestic projects.
This framework is designed to incentivize emissions reductions while channeling finance toward Chilean mitigation projects.
Carbon Tax Structure
Chile’s carbon tax—commonly referred to as the Green Tax—came into force in 2017. It was expanded in 2020 to include large emitters and currently applies to facilities emitting more than 25,000 tCO₂e per year, at a tax rate of US$5 per tonne.
Regulated companies must:
Report their emissions annually to the Superintendence of the Environment (SMA) via the national RETC platform.
Either pay the tax for emissions exceeding 25,000 tCO₂e per year or offset them using eligible carbon credits.
The government has already signaled that the carbon price will rise over time, with indicative targets of:
US$35/tCO₂e by 2030
US$80/tCO₂e by 2040
A draft proposal would also require companies emitting 10,000–25,000 tCO₂e to submit monitoring reports, increasing oversight for medium-sized emitters.
Eligible Carbon Credits
To be accepted under the offsetting framework, carbon credits must come from projects that are:
Located within Chile
Certified by approved standards such as Verra (VCS), Gold Standard, CDM, BioCarbon, or Cercarbono
Recorded in the National Registry of Emission Reduction Projects
Issued with a vintage less than three years old at the time of retirement
Demand has been steadily increasing. In 2024, regulated entities compensated over 4.4 million tonnes of CO₂, although the domestic market continues to face supply shortages and significant price disparities across project types.
Compliance and Penalties
Non-compliance can result in:
Fines of up to 5% of annual revenue, or
Temporary suspension of activities
These penalties underscore the seriousness and enforcement strength of Chile’s regulatory framework.
Article 6.2: International Cooperation and ITMOs
Chile is actively implementing Article 6.2 of the Paris Agreement by establishing bilateral and multilateral cooperative agreements for the transfer of internationally transferred mitigation outcomes (ITMOs). These agreements allow participating countries to meet their climate targets through verified emissions reductions achieved in Chile.
Chile became a regional leader by approving its first Article 6.2 project, a biomass initiative in the Ñuble Region developed in partnership with Switzerland. Through this cooperation, Switzerland finances emissions-reduction activities in Chile and counts the resulting ITMOs toward its national climate targets.
In addition to Switzerland, Chile has established Article 6.2 cooperation with Japan and Singapore.
To support these activities, Chile has drafted national regulations to formalize the authorization and oversight of ITMO transfers, ensuring:
Environmental integrity
Prevention of double counting
Strong social and environmental safeguards
Third-party auditing and public transparency
Chile’s approach is widely viewed as a model for other Latin American countries preparing to engage with international carbon markets under the Paris Agreement.
HuellaChile: The Voluntary Program for Corporate Climate Action
Alongside its regulated system, Chile operates HuellaChile, a voluntary national program managed by the Ministry of the Environment. The program has become the backbone of corporate carbon management across the country—and is widely used by multinational companies operating in Chile.
What HuellaChile Offers
HuellaChile provides:
A free, standardized online platform for calculating and reporting GHG emissions
Methodologies aligned with ISO 14064 and ISO 14067
Technical support, training, and capacity building
Public recognition across four official levels:
Quantification
Reduction
Neutralization
Excellence
The program also encourages the use of carbon credits from domestic projects to neutralize residual emissions. HuellaChile accepts three out of five standards used under the Green Tax—Gold Standard, Verra, CDM—but allows for older vintages. This creates an additional market for project developers whose older credits are no longer eligible under the Green Tax but can still be purchased by companies participating in HuellaChile.
Who Uses HuellaChile?
The program has been supported by international institutions—including the European Commission, the German government, and the Australian government—which has strengthened its credibility and global alignment.
Adoption is widespread among both local and international companies. For many multinationals, HuellaChile has become the preferred framework for:
Environmental reporting
ESG commitments
Decarbonization programs
Notable participants include DHL, Roche, PwC, Sodexo, Siemens, 3M Chile, Komatsu Cummins, Molycop Chile, Edénred Chile, and Ambipar Environment.
How Blockchain Can Strengthen Chile’s Carbon Market and Climate Agenda
As Chile expands its carbon pricing framework and prepares to scale Article 6.2 cooperation, blockchain infrastructure can play a pivotal role in improving transparency, efficiency, and trust across the system.
For Article 6.2 transactions—where environmental integrity and the avoidance of double counting are essential—blockchain offers a tamper-proof, auditable record of credit issuance, transfer, and retirement. This level of transparency can reduce verification overhead, streamline authorization processes, and give both Chile and its partner countries real-time visibility into ITMO flows. By reducing administrative layers and manual reconciliation, blockchain can significantly accelerate cooperation while strengthening public trust in international carbon trading.
Blockchain can also simplify processes for companies aiming to obtain Neutralization or Excellence seals under HuellaChile. Today, organizations often spend considerable time gathering documentation, verifying credit origins, and coordinating with project developers. With carbon credits issued or tracked onchain, companies could instantly verify a project’s location, certification, vintage, and retirement status—saving substantial time and administrative effort. For domestic project developers, this also means broader access to buyers and faster settlement, supporting the growth of Chile’s local carbon supply.
As Chile builds its national registry and scales both domestic and international carbon markets, blockchain-based infrastructure can provide the transparency, interoperability, and efficiency needed to support the country’s long-term climate goals.
Key Takeaways for Market Participants
Chile is building one of Latin America’s most structured and forward-looking carbon markets, with a clear regulatory roadmap through 2050.
Ongoing domestic supply constraints create meaningful opportunities for new carbon projects in Chile.
The upcoming national registry, Emissions Trading System (ETS) and Article 6 regulation will increase transparency and integrate Chile with global carbon markets.
HuellaChile continues to shape corporate climate reporting, making it a strategic platform for both local and multinational organizations.
As Chile advances toward carbon neutrality, its hybrid approach—integrating tax, offsets, international cooperation, and voluntary programs—offers a compelling model for how emerging markets can align climate policy with corporate accountability.
Want to learn more about Chile’s carbon market?
For a deeper, policy-level perspective, we recommend reviewing the government document “Roadmap for Carbon Pricing Instruments and Carbon Markets 2025” (original title: Hoja de ruta de instrumentos de precio y mercados de carbono 2025), which outlines Chile’s strategic vision for carbon pricing, market development, and regulatory integration in the coming years.
