The government expects to attract more investment to the sector thanks to the Energy Transition Law.
Colombia aims to become a world reference in sustainability and incorporation of renewable energy from unconventional sources, El Tiempo reported.
The new law recognizes blue and green hydrogen as unconventional energy sources, which may attract tax benefits such as income tax deduction, VAT exclusion, tariff exemption and accelerated depreciation.
“This is a very important milestone that consolidates the entire fiscal, commercial and regulatory framework for Energy Transition, expanding incentives to new generation sources,” Minister of Mines and Energy (MinEnergia) Diego Mesa said.
The regulation also extends the tax benefits of VAT exclusion, tariffs and accelerated depreciation to efficient energy management projects. Investments and smart metering equipment will also be eligible for these benefits.
Bottom-Line: Colombia continues to take important steps in energy transition, and the new law generates positive expectations for the medium and long term.
The renewable energy sector represents great opportunities for Colombia’s economy and development.
However, authorities must remember that environmental and social licensing is generating delays in important projects, and it is key to work on these issues to attract investors’ interest.