Uruguay

Small country, ambitious climate targets

Despite its comparatively low contribution to global emissions, Uruguay has set itself ambitious climate targets to counteract climate change. To this end, the country has created institutional structures, in particular with the establishment of the National Climate Change Response System in 2009. This National System comprises a large number of ministries and offices and serves as a coordination platform for climate protection strategies and measures, and integrates the topic of climate change directly into political processes. Both emission reductions and climate change adaptation measures are given equal consideration. The various instruments in connection with the Framework Convention on Climate Change and the Paris Agreement are also coordinated via the system. Under the leadership of the Ministry of Housing, Spatial Planning and the Environment, which became the Ministry of the Environment in 2020, a National Climate Protection Guideline was drawn up in 2010 – a milestone with strategic guidelines.

When defining its NDC, Uruguay decided to include almost all sectors. The first NDC submitted in 2017 covered 98 per cent of the National Greenhouse Gas Inventory. One pioneering climate protection measure that gained momentum between 2005 and 2010 was the beginning of the first energy transition, incorporating non-traditional renewable sources into the energy matrix, in particular electricity generation in the framework of the National Energy Policy 2005–2030.

The country focused primarily on wind energy, with the majority of the new wind farms going into operation as early as 2015. Today, 98 per cent of electricity production comes from renewable energies (wind, hydro, biomass and solar). This has created a secure basis for driving forward electromobility, which is anchored in the climate strategy. At the same time, energy efficiency measures have been stepped up. The Ministry of Industry, Energy and Mining has established several instruments and incentives for the private sector to implement different energy efficiency “win-win” measures, which have been very successful over the last decade, in the framework of the National Energy Efficiency Plan. This plan, introduced around ten years ago and currently under revision, is intended to further strengthen this strategy.

While Uruguay aimed to massively increase energy efficiency by 2030 in its previous NDC, the third NDC (2035) focuses on the challenges of decarbonisation in areas where there are currently no evident alternatives to fossil fuels and/or where measures to abate emissions are relatively more expensive and harder to implement. The aim is to ensure the best possible and just transition to green energy sources.

"In principle, Article 6.2 of the Paris Agreement allows our private sector to participate directly in mitigation measures. We have created the necessary conditions at government level to ensure that these measures can also be implemented."

Paola Visca, Climate Change Technical Advisor

"A ‘Sustainability Linked Bond’ issued around two years ago supports Uruguay’s efforts towards climate action and awareness-raising. It works like a sovereign bond, but the interest rate is linked to two of the NDC indicators, so achieving the NDC has not only environmental, but also financial consequences. Many stakeholders, especially investors who previously knew little about sustainability issues, began to better understand how to link the financial and private sectors to low-carbon and resilient development, and how to design portfolios that are both economically and environmentally profitable."

Mariana Kasprzyk, Climate Change Technical Advisor

In addition to the energy sector, agriculture is responsible for a large proportion of emissions. Mariana Kasprzyk emphasises the challenges in beef production, where the proportion of methane and nitrous oxide emissions is particularly high. Much has already been achieved through climate protection measures and measures to foster ecological sustainability to make this important industry, which generates jobs and foreign currency income, as sustainable and efficient as possible. The intensity of emissions has been reduced in part thanks to the promotion of technologies for forage management in cattle breeding and raising based on natural grassland feeding, in addition to which, cattle management measures, biodiversity and water quality have been improved in order to create an ecosystem that is as healthy and sustainable as possible. However, modern technologies are not available to the same extent as in the energy sector. In addition, the pressure on land use has increased significantly over the last 20 years, and livestock farming has been intensified due to increased demand.

Uruguay’s A6.2 strategy

Uruguay is willing to increase its ambitious climate targets by implementing A6.2 activities. The country sees A6.2 as an opportunity for the private sector to participate directly in mitigation measures. Uruguay’s political stability and continuity in climate policy offer stable framework conditions and enable long-term investments in the energy, agricultural and industrial sectors. The climate agreement and the cooperation with Switzerland are driving forward the development of A6.2 activities.

Uruguay is currently identifying and evaluating A6.2 activities for the crediting period up to 2030. The government reaffirmed its support in principle for the use of LC3 technology in the cement industry and for the implementation of electric mobility. These activities are supported by the KliK Foundation.