Latin America and the Caribbean is ready to take on a crucial role in the global transition to a safer and more sustainable energy system, as highlighted in a groundbreaking special report from International Energy Agency (AIE). Titled “Energy Outlook of Latin America,” this comprehensive report highlights the region's vast array of energy and mineral resources, as well as its pre-existing leadership in renewable energy.
Currently, the region already stands out as one of the cleanest electrical sectors in the world, with 60% of its electricity generated from renewable sources, mainly hydroelectric energy. Countries such as Brazil, Mexico, Chile and Argentina stand out with some of the best wind and solar resources in the world. Furthermore, Latin America is an important producer of biofuels, with widespread use of bioenergy across the region.
However, the region also holds around 15% of global oil and natural gas reserves, making it a key player in the production of these resources. Furthermore, with about half of global lithium reserves and more than a third of copper and silver reserves, Latin America and the Caribbean are essential components in many rapidly expanding clean energy technologies.
The report highlights that, despite the commitments declared by 16 of the region's 33 countries to achieve net-zero emissions by mid-century, the effective implementation of policies for the energy transition is still limited. The region is expected to continue to rely significantly on fossil fuels, particularly in the road transport sector, unless decisive actions are implemented to accelerate the adoption of renewable energy, promote the electrification of industry and transport, and boost energy efficiency.
To fully achieve the established objectives, the report highlights the need for a substantial increase in investments in clean energy projects in the region. It is estimated that funding for such projects will need to double by 2030, reaching US$ 150 billion, and increase fivefold by 2050. Such investments would be critical to boosting low-cost, low-emission hydrogen production, diversifying global energy supply and generate significant long-term revenue from essential minerals.
International cooperation and the implementation of appropriate policies were highlighted as fundamental elements to allow Latin America to maximize its energy potential and achieve a prominent position in the global energy economy. The need to expand universal access to modern and affordable energy was also emphasized, considering that 17 million people in the region still do not have access to electricity and 74 million do not have access to clean cooking materials.
Furthermore, the report highlights the importance of reducing methane emissions from oil and gas operations in the region, proposing measures that could reduce emissions by up to 80% at substantially low costs. By joining the Global Methane Commitment and the Glasgow Commitment to curb deforestation by 2030, the region can move towards a net-zero emissions economy.
With this, Latin America and the Caribbean are positioned to lead the global transition to a safer, more sustainable and environmentally responsible energy system, with the effective implementation of policies, strategic investments and international cooperation.
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