Latin America Energy Outlook 2023

INTERNATIONAL ENERGYAGENCY IEA associationcountries: The IEA examines thefull spectrumof energy issuesincluding oil, gasand coal supply anddemand, renewableenergy technologies,electricity markets,energy efficiency,access to energy,demand sidemanagement andmuch more. Throughits work, the IEAadvocates policiesthat will enhance thereliability, affordabilityand sustainability ofenergy in its31 member countries,13associationcountries andbeyond. IEA membercountries: AustraliaAustriaBelgiumCanadaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNew ZealandNorwayPolandPortugalSlovak RepublicSpainSwedenSwitzerlandRepublic of TürkiyeUnited KingdomUnited States ArgentinaBrazilChinaEgyptIndiaIndonesiaKenyaMoroccoSenegalSingaporeSouth AfricaThailandUkraine Please note that thispublication is subject tospecific restrictions that limitits use and distribution. Theterms and conditions areavailable online atwww.iea.org/terms This publication and anymap included herein arewithout prejudice to thestatus of or sovereigntyover any territory, to thedelimitation of internationalfrontiers and boundaries andto the name of any territory,city or area. The EuropeanCommission alsoparticipates in thework of the IEA Source: IEA.International Energy AgencyWebsite: www.iea.org Across many indicators, the Latin America and Caribbean region stands out for itsextraordinary endowment of natural resources – both fossil fuel and renewable energy – andits history of policy making that has notably delivered one of the cleanest electricity sectorsin the world. The expansion of renewable energy technologies such as hydropower andbioenergy, initially driven by an emphasis on energy security, has more recently beenpropelled by a deepening commitment to sustainability. Sixteen of 33 countries in the regionhave pledged to reach net zero emissions by mid-century or earlier, and most have presentedupdated and increasingly ambitious climate targets tied to the 2015 Paris climate agreement. Our Latin America Energy Outlook, the International Energy Agency’s (IEA) first in-depth andcomprehensive assessment of Latin America and the Caribbean, builds on decades ofcollaboration with partners across the region. In support of Latin America and theCaribbean's energy goals, this report explores the opportunities and challenges that lieahead, providing insights into the ways in which the region’s energy future and major globaltrends are deeply intertwined. A key asset for region is its low-emissions electricity supply. This lays the groundwork forother key aspects of energy transitions, including extensive clean manufacturing of industrialgoods and the production of fuels such as low-emissions hydrogen. Resources and deepexpertise in sustainable bioenergy also position the region to lead on sustainable transportfuels – at home and worldwide. Meanwhile, the global electrification of transport andexpansion of electricity grids is generating a boom in demand for critical minerals such ascopper, lithium, rare earth elements and graphite. The region’s ample reserves of theseminerals place it in pole position to expand production to supply the needs of the global cleanenergy transition, with additional potential to move up the value chain into refining andprocessing. Reaping these benefits will require clear strategic vision, robust public policies and broadpartnerships between governments and other stakeholders. Countries in the region need todesign and implement policies and regulations that attract substantial investment, ensuresustainability and deliver just and equitable transitions. This includes overcoming remainingenergy access challenges while creating jobs and spurring innovation in emerging cleanenergy sectors. Oil and gas remain important in the region. Natural gas balances supply for power systemsand is a key fuel for industry, while most vehicles on the road rely on oil, despite theprevalence of biofuels. Latin America and the Caribbean – home to an abundance of oil andgas resources – will continue to play a vital role in supplying international markets, eventhough global demand for both oil and gas is expected to peak this decade under currentpolicy settings. Managing this transition will require the co-operation of a broad set ofstakeholders that are willing to adapt and innovate as local and global needs change in theyears ahead. This report is a testament to the IEA’s strong relationships with countries in Latin Americaand the Caribbean, including five members of the IEA family: Argentina, Brazil, Chile,Colombia and Mexico. Furthermore, this Outlook reflects input from government officials,experts and stakeholders from 17 countries across the region. It also provides a basis for ourongoing collaboration with other international institutions in the region such as the Inter-American Development Bank, the Latin American Energy Organization, and the UnitedNations Economic Com