Chile’s Green Tax Emissions Compensation System, Sistema de Compensación de Emisiones del Impuesto Verde (SCE) in Spanish, has registered significant growth in its second cycle, which concluded in April 2025. During this second cycle, 4.4 million tonnes of CO2 were compensated using carbon credits, compared to 260,000 tonnes of CO2 during the first cycle (December 28, 2023–April 30, 2024). (Even though the first cycle only lasted four months, a full year of trading activity at this rate would have amounted to 780,000 tonnes, which is less than a quarter of the amount compensated for with carbon credits in the second cycle.)
The SCE allows entities subject to the carbon tax—those emitting 25,000 or more metric tons of carbon dioxide (CO2) annually—to offset their emissions by purchasing carbon credits from projects located within the national territory. Chile implemented the system to support its efforts to reduce and remove greenhouse gas (GHG) emissions and meet its Nationally Determined Contributions (NDCs). Exempt Resolution 1420 (external), published on December 28, 2023, recognizes qualified, external certification programs, including Verra’s Verified Carbon Standard (VCS) Program, which issue units that can be traded in Chile’s domestic carbon market, supporting the market’s growth, advancing climate action, and helping Chile meet its Nationally Determined Contributions (NDCs).
In the first cycle, four VCS projects were eligible to issue units for trade within the scope of Chile’s domestic carbon market. These projects issued 190,518 Verified Carbon Units (VCUs), of which 57% (108,067) were purchased and retired by companies to meet their obligations under the SCE. This indicates that the SCE is an important catalyst for demand for carbon credits in Chile. Additional projects in Chile are currently undergoing registration with the VCS Program, the majority of which are using an Agriculture, Forestry, and Other Land Use (AFOLU) methodology. Because projects using any VCS methodology are approved to contribute credits to the SCE, these projects will be able to sell their VCUs on Chile’s domestic carbon market as well.
The SCE illustrates that a strong domestic carbon market can have an impact at several levels—including the global climate, the national economy, and local communities as well as the landscapes they maintain. The SCE also illustrates how domestic carbon markets can help countries in meeting their NDCs. Verra is committed to supporting the development of such efforts in Chile and other countries.