Electric vehicle regulation and law in Chile

EVs currently represent a very small percentage of the Chilean automotive fleet, although this is expected to change in the coming years as different players, public and private, intend to promote the development of electromobility.

While Chile’s position in the global automotive market is low, it has very interesting growth potential. The country produced one-third of the world’s lithium in 2016 and has the largest amount of lithium reserves in the world – a key component in battery manufacturing. Although Chile has so far been limited to extraction, there are ongoing projects for the development of products with high added value, such as cathodes and battery cells.

The table shows the Chilean automotive fleet in 2016 by type of engine: 1 2016 Annual Survey of Vehicle Fleet, National Institute of Statistics.

Chile has an important public market for electric passenger transport. Examples include: Santiago Metro in the capital city; Valparaíso Metro (Merval, for its acronym in Spanish) in Chile’s second largest city; Biotren, the commuter rail system in Concepción, one of the largest cities in the country; Tren Central railway from Santiago to the south of the country; and trolleybuses in Valparaíso. Other emblematic projects are under development – trams in several cities, aerial lifts, electric buses in Transantiago (Santiago public transport), and electric taxis.

There are relatively few EV charging stations – around 34 in the Santiago Metropolitan Region and two in the Valparaíso Region. Commitments have been made for the provision of new charging stations.

At the end of 2017, the Ministries of Energy, of Transportation and Communications and of the Environment developed the National Electromobility Strategy (“Estrategia Nacional de Electromovilidad”). Chile has set the objective of promoting the efficient use of energy, establishing the goal of a 20% reduction in energy demand by 2025.

The National Electromobility Strategy outlines the actions that Chile must take in the short- and medium-term to ensure that 40% of private vehicles and 100% of public transport vehicles are electric by 2050. Specific objectives include:

• establish the regulations and requirements necessary for the standardisation of components that favour the efficient development of electromobility from the energy, environmental and mobility points of view. 2 The following are lines of action for this specific objective: a) Establishment of minimum energy efficiency standards for private vehicles; b) Definition of technical/economic regulations for charging; c) Definition of regulations for the accessibility of charging stations in buildings; d) Definition of regulations for the coexistence of conventional and electric vehicles on the same road infrastructure; e) Establishment of technical construction and safety requirements for electric vehicles; and, f) Explicit incorporation of vehicles and their components in the Recycling Law.
• promptly promote the penetration of EVs in public transport in Chile’s cities. 3 The following are lines of action for this specific objective: a) Incentives for public transport; b) Incentives for share taxis; and, c) Incentives for taxis.
• support the research and development of electromobility and promote human capital formation at various levels to enable its progress. 4 The following are lines of action for this specific objective: a) Promotion of applied research and development to create a business environment in electromobility; b) Specialisation of researchers; c) Incentive to train technicians and specialised professionals; d) Electromobility training for emergency, rescue and healthcare personnel; e) Technology prospecting panel; and, f) Training of public officials and decision makers.
• promote the development of electromobility, creating new balances that allow the market to sustain itself. 5 The following are lines of action for this specific objective: a) Transformation of the public fleet; b) Development of commercial fleet pilot projects, and, c) Promotion of the electric car.
• develop spaces for knowledge transfer and dissemination of information so that the different players can make optimal decisions regarding electromobility. 6 The following are lines of action for this specific objective: a) Creation of an electromobility observatory; and, b) Dissemination of electromobility.

Within National Electromobility Strategy framework , public and private sector organisations made formal and concrete commitments to be part of and promote the development of activities, projects or initiatives that contribute to disseminating the advantages of electromobility in Chile. 7
www.minenergia.cl/archivos_bajar/2017/electro_mobilidad/compromisos_firmados.pdf

In parallel, the National Energy 2050 Policy (launched in December 2015 and approved by Supreme Decree No. 148 of the Ministry of Energy), establishes the improvement of vehicle energy efficiency and operation among its guidelines. Its goals include the adoption of energy efficiency standards for the new fleet of light vehicles by 2035.

Chile has ratified international agreements on greenhouse gas emissions and climate change, undertaking to reduce emissions by 30% below its 2007 levels by 2030.

It is expected that an Energy Efficiency Bill will be sent to Chile’s Congress this year which will grant powers to the Ministries of Energy and of Transportation and Communications to establish minimum vehicle efficiency standards, so that new vehicles entering the national market progressively increase their energy efficiency.

At a local level, the Plan for the Prevention and Decontamination of Atmospheric Pollution for the Santiago Metropolitan Region (approved by Supreme Decree No. 31 of the Ministry of the Environment and published in the Official Gazette on 24 November 2017), addresses vehicle energy efficiency and incentives for hybrid and electric cars. Article 10 of the plan states that: “The Ministry of Energy, together with the Ministry of Transportation and Communications and the Ministry of the Environment, within a period of 12 months from the entry into force of this Decree, will promote the establishment of a regulatory framework to determine the energy efficiency standards for the vehicle fleet, in order to gradually reduce fuel consumption and pollutant emissions.” Incentives are covered in Article 11: “The Ministry of Finance will establish, within 12 months of the entry into force of this Decree, a strategy to offer incentives for the purchase of zero- and low-emission vehicles.”

In summary, although there are no legal bodies that regulate electric vehicles, work is being done to implement the regulatory framework.

Chile is actively implementing energy efficiency policies in transport through the renewal of fleets, the training of companies and drivers, and the labelling of vehicle energy efficiency. However, additional incentives are required to achieve the proposed goals.

The fourth component of the National Electromobility Strategy includes “Initial incentives to develop electromobility”, with measures such as the provision of preferential spaces with charging station infrastructure in parking lots and structures, and the exemption of EVs from road space rationing. Other proposals include studying the possibility of lowering prices (toll roads, parking in airports and hospitals, public parking) and reaching agreements with electricity providers for EV charging and thus establishing discounted tariffs. However, this has not yet been implemented.

Pilot demonstration programmes are ready for launch. For example, in August 2018, Chile’s first 60 electric taxis will start to circulate, authorised by the Ministry of Transportation. In addition, Transantiago, Santiago’s public transport system, will incorporate approximately 130 electric buses operating in “electric corridors”.

The Chilean Economic Development Agency (Corfo, for its acronym in Spanish) will also incorporate electromobility as a specialist strategic programme. Through pre-investments and guarantees, Corfo will support access to soft loans for companies that incorporate electric vehicles in their fleets and will support the promotion of electromobility through innovation and entrepreneurship.

In 2018, the Energy Efficiency Bill is due to be sent to Chile’s Congress. The Ministry of Energy is also likely to provide incentives for the purchase of zero- and low-emission vehicles as specified in the Pollution Prevention and Decontamination Plan for the Santiago Metropolitan Region.

The main entities that play a role in the development of electromobility in Chile, in addition to the government, are:

• Agrupación Movilidad Eléctrica de Chile, AMECH – A group that gathers players from the world of electromobility with the aim of promoting zero-emissions electromobility around ten basic principles. Its associates belong to different sectors of Chile’s national industry, working together to promote the mass use of zero-emissions mobility technologies to decarbonise the automotive fleet.
• National Automotive Association of Chile (Asociación Nacional Automotriz de Chile A.G., ANAC) – A trade association that brings together the representatives of automotive brands and importers of automobiles, light commercial vehicles, trucks and buses. Its work includes influencing the creation of public policies relevant to the sustainable development of the sector.
• Electricity companies, mainly distributors – The Superintendence of Electricity and Fuels has allowed any company to install charging stations for electric cars without being associated with electricity distribution for regulated customers. However, it is clear that electricity companies have a key role to play in expanding the number of charging stations for electric vehicles.
• Companies that produce lithium – Chile produced one-third of the world’s lithium in 2016 and has the world’s biggest lithium reserves. Although Chile has so far been limited to extraction, there are ongoing projects for the development of products with high added value, such as cathodes and battery cells – an important area of economic development in the country.

• Absence of regulation – The National Electromobility Strategy is the first reference to electromobility in Chile. However, it contains basic provisions that must be developed at the regulatory level in order to have an adequate legal framework.
• Creation of incentives, not necessarily at the level of subsidies – there are still no incentives to purchase EVs.
• Price – EVs are much more expensive than traditional vehicles.
• Lack of charging infrastructure – although the number of charging stations has increased, there is still a lack of charging infrastructure, which makes the use of EVs difficult.