This week, various media outlets reported that, starting in 2025, large companies, industries, and businesses that consume more than 300 kW must have a 20% renewable energy supply. These publications stem from previously passed laws, which we review below.
Sustainability is the new championship Law 27191, sanctioned on September 23, 2015 and promulgated on October 15, 2015, modifies the Law 26190 to promote the use of renewable energy sources in Argentina. This legal framework seeks to increase the participation of these sources in national electricity consumption, establishing a 20% target for the year 2025..
Objectives and Scope
The law's main objective is to ensure that renewable sources contribute 20% of national electricity consumption by December 31, 2025. This represents a significant increase from the previous target of 8% set for 2017. Renewable sources include wind, solar, geothermal, biomass, and other energy sources.
Impact of the Law on the Use of Renewable Energy
Since its implementation, Law 27191 has fostered an increase in installed renewable energy capacity in Argentina. The legislation has incentivized companies and individuals to invest in clean technologies, leading to significant growth in wind and solar power generation. This growth not only contributes to diversifying the country's energy mix but also seeks to reduce dependence on fossil fuels and mitigate the associated environmental impact.
Environmental Benefits
Emissions ReductionBy increasing the share of renewable energy, a significant decrease in greenhouse gas emissions is expected.
Conservation of Natural ResourcesPromoting renewable sources helps preserve water resources and other ecosystems that could be affected by the exploitation of fossil fuels.
Regulation of the Investment Regime
Law 27191 establishes an Investment Regime that regulates the conditions under which renewable energy projects can be carried out. This regime includes:
Tax BenefitsCompanies investing in renewable energy can access tax exemptions, accelerated depreciation, and early VAT refunds.
Conditions for Access: To benefit, projects must have effective implementation beginning before December 31, 2025, with at least 15% of the total investment already disbursed.
Trust Fund: The Renewable Energy Development Fund (FODER) is created, which provides financing through loans and capital contributions to eligible projects.
Obligations according to Article 6
Article 6 establishes that eligible beneficiaries must have projects that have begun to be implemented between January 1, 2018, and December 31, 2025. This is crucial for accessing the promotional benefits provided for in Article 9.
Importance of Article 6
Establishing Requirements: Defines the conditions necessary to be part of the regime.
Access to Promotional Benefits: Allows projects to meet the criteria for tax benefits.
20% Objective: Reinforces the ambitious goal to increase the renewable share in the energy matrix.
Conditions of Execution: Ensures that only serious projects can access incentives.
Promoting Sustainable Investment: Promotes greater investment in clean energy.
Javier Milei's Government Plan: Javier Milei's government has expressed its intention to continue promoting sustainable development and investment in renewable energy. Although the specific details of the plan are still being developed, it is expected to:
Accelerate Investments: Seek to attract more private investment through additional incentives and regulatory simplification.
Regulatory Review: Evaluate existing regulations to optimize tax benefits.
Commitment to Sustainability: Maintain a commitment to the environmental goals established by previous laws.
Penalties for Non-Compliance
Failure to meet the 20% target can lead to various penalties, including financial fines and the loss of tax benefits. Companies must demonstrate their commitment to the transition to more sustainable energy to avoid sanctions.
Law 27191 represents a significant step toward energy sustainability in Argentina, incentivizing investment in renewable energy through tax benefits and a clear regulatory framework.With ambitious goals and a fund dedicated to developing these technologies, Argentina is expected to move toward a cleaner and more sustainable energy future. The combination of appropriate incentives and effective regulation will be key to achieving the proposed objectives and contributing to a cleaner and more efficient environment.
Fountain: Scope