Regulation & Policy Sep 3, 2021 2:51 PM
The Energy Transition Law seeks to make the country attractive for investment in unconventional renewable energies.
This law establishes tax incentives for companies that contribute to the fight against climate change, deductions in taxes and tariffs for green and blue hydrogen projects, as well as incentives for investments and large-scale energy storage equipment, Valora Analitik reported.
This regulation establishes initiatives to improve and expand energy service coverage in the most remote areas of Colombia and excludes VAT from the acquisition of goods and services for the development of generation projects with unconventional sources.
The government will adopt programs to promote energy, hydrogen and fuel gas use in public and cargo transportation.
Daniel Rodriguez, Partner of CMS Rodriguez-Azuero, said that this law has the challenge of making a leap towards the energy transition, allowing the sustainable use of resources and guarantying energy supply.
The Ministry of Mines and Energy (MinEneriga), or the entity designated by it, will establish special registration conditions for existing energy and hydrocarbon co-production projects. It will also adopt the necessary measures to avoid the overlapping of projects and determine the conditions, terms, requirements and obligations under which the interested parties will obtain, maintain or lose this registration.
The law establishes measures to boost the market, streamlining procedures and licenses necessary for the development of new projects, prioritizing environmental licensing for those projects in the energy and gas sector that have an entry date of less than two years.
Bottom-Line: Prioritizing environmental licensing is a big step to accelerate the development of renewable projects in the country, considering that this is one of the processes that most delay companies in their plans in Colombia.
The government is creating an attractive regulatory framework for investors, but it is necessary to continue improving on social and licensing issues.