Chile is preparing to implement its first homegrown carbon offset methodology under the country’s carbon tax system, with a new pilot project designed to replace traditional wood-burning heaters with energy-efficient split air conditioning units in the Biobío region.
Scenic landscape of Chile’s Biobío Region with green hills, rivers, and native vegetation under a calm blue sky. AI generated picture.
Developed in collaboration with energy company Enel X, the project is part of Chile’s broader strategy to shift away from external carbon credit standards and build a national certification framework. The Biobío region—designated as saturated with air pollutants—will serve as the testing ground for the new approach, with installations expected to begin in early 2026 pending government approval of the project design.
‘Until now, the SCE has operated by recognising certificates from external [carbon] certification programs’, stated Chile’s Ministry of Environment (MMA). ‘However, in the case of local pollutants, the Ministry of the Environment has developed its own certification program, given that there are no recognised initiatives for this purpose to date.’
Chile’s current carbon tax applies to entities emitting more than 25,000 tonnes of CO2 equivalent (tCO2e) annually, at a rate of $5 per tonne. These companies are allowed to use offset credits to fulfil their compliance obligations, provided the credits originate from projects in Chile and have been issued after 1 January 2020.
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Until now, offsets have primarily come from international registries, including Colombia’s Biocarbon and Cercarbono, the US-based Verra, Switzerland’s Gold Standard, and the UN’s Clean Development Mechanism. The new pilot marks a shift toward nationalised offsetting that links environmental policy with domestic air quality concerns.
The need for domestic solutions is underscored by the surge in credit usage within the system. In 2024, around 4.4 million tCO2e in carbon credits—valued at over $22 million—were applied to meet tax obligations, a sharp rise from just 260,000 tCO2e in 2023, according to government data.
If successful, the Biobío pilot could lay the foundation for a national offset market that simultaneously reduces greenhouse gas emissions and addresses critical local pollution challenges. The project also offers a blueprint for aligning public health goals with environmental policy through innovative mechanisms rooted in national priorities.
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At DGB Group, we see Chile’s move to build a domestic carbon certification system as a key step towards increasing integrity and traceability in the global carbon market. As countries like Chile pioneer locally rooted solutions—tied not only to emissions reductions but also to public health and community wellbeing—our nature-based projects stand ready to complement these ambitions. Designed for high-impact nature benefits and measurable social value, our initiatives align with this new generation of accountable carbon frameworks. The path to trusted carbon markets is being laid—now is the time to be part of it. Explore how your business can drive impact and create long-term value.
