Despite already having one of the world’s lowest-carbon power sectors, LAC is accelerating renewable deployment to diversify beyond hydropower, strengthen energy security, and support rising electricity demand.
Brazil and Chile continue to lead the region’s energy transition, with Brazil dominating renewable fuels and emerging CCUS activity, while Chile stands out in energy storage and low-carbon hydrogen deployment.
While LAC possesses significant renewable energy potential, infrastructure constraints, including grid bottlenecks, transmission limitations, storage requirements, and project financing challenges, remain key barriers to large-scale deployment.
Despite already having one of the world’s cleanest power mixes, LAC’s renewable power capacity is forecast to rise from 70% in 2025 to 78% by 2035, driven by rapid solar PV and wind deployment. However, hydropower remains integral to the region’s electricity system, while gas-fired generation continues to expand to support rising electricity demand.
Energy storage deployment in LAC is accelerating, but remains heavily concentrated in Chile, which hosts the vast majority of the region’s active and upcoming projects. Falling battery costs, rising solar PV penetration, and supportive reforms, such as Chile’s energy storage and electromobility legislation, are driving growth, although most large-scale projects remain in the pipeline and are yet to start operations.
xEV (i.e., BEVs and hybrids) adoption in LAC remains at an earlier stage than in China, Europe, and North America, but growth is accelerating, particularly in Brazil and Argentina, where xEV sales are forecast to surpass ICE vehicle sales by 2031. In these two countries, hybrids are currently outperforming BEVs due to limited charging infrastructure and the popularity of flex-fuel hybrid models, while growing Chinese investment is improving affordability and local manufacturing capacity.
Brazil continues to dominate LAC’s renewable fuels market, accounting for over 90% of ethanol production capacity and leading both renewable diesel and SAF development. Supportive policies such as RenovaBio and the “Fuel of the Future” program are underpinning investment, while SAF capacity is forecast to expand rapidly as airlines and developers target decarbonization opportunities within aviation.
CCUS deployment in LAC remains nascent, with fewer than 10 active and upcoming projects, concentrated primarily in Brazil. While the region possesses significant geological CO₂ storage potential in depleted oil and gas reservoirs and offshore basins, captured CO₂ could also support emerging synthetic fuel production, with the region’s first pilot e-fuel project starting operations in 2022.
Latin America’s abundant renewable energy resources position low-carbon hydrogen as a potential low-hanging fruit for decarbonization and export growth. While domestic demand is expected to emerge in sectors such as fertilizers, heavy transport, and mining, several leading markets - such as Chile and Brazil - are pursuing export-oriented strategies targeting Europe and Asia through green ammonia, methanol and other hydrogen derivatives.
Brazil and Chile continue to lead the region’s energy transition, with Brazil dominating renewable fuels and emerging CCUS activity, while Chile stands out in energy storage and low-carbon hydrogen deployment.
While LAC possesses significant renewable energy potential, infrastructure constraints, including grid bottlenecks, transmission limitations, storage requirements, and project financing challenges, remain key barriers to large-scale deployment.
Despite already having one of the world’s cleanest power mixes, LAC’s renewable power capacity is forecast to rise from 70% in 2025 to 78% by 2035, driven by rapid solar PV and wind deployment. However, hydropower remains integral to the region’s electricity system, while gas-fired generation continues to expand to support rising electricity demand.
Energy storage deployment in LAC is accelerating, but remains heavily concentrated in Chile, which hosts the vast majority of the region’s active and upcoming projects. Falling battery costs, rising solar PV penetration, and supportive reforms, such as Chile’s energy storage and electromobility legislation, are driving growth, although most large-scale projects remain in the pipeline and are yet to start operations.
xEV (i.e., BEVs and hybrids) adoption in LAC remains at an earlier stage than in China, Europe, and North America, but growth is accelerating, particularly in Brazil and Argentina, where xEV sales are forecast to surpass ICE vehicle sales by 2031. In these two countries, hybrids are currently outperforming BEVs due to limited charging infrastructure and the popularity of flex-fuel hybrid models, while growing Chinese investment is improving affordability and local manufacturing capacity.
Brazil continues to dominate LAC’s renewable fuels market, accounting for over 90% of ethanol production capacity and leading both renewable diesel and SAF development. Supportive policies such as RenovaBio and the “Fuel of the Future” program are underpinning investment, while SAF capacity is forecast to expand rapidly as airlines and developers target decarbonization opportunities within aviation.
CCUS deployment in LAC remains nascent, with fewer than 10 active and upcoming projects, concentrated primarily in Brazil. While the region possesses significant geological CO₂ storage potential in depleted oil and gas reservoirs and offshore basins, captured CO₂ could also support emerging synthetic fuel production, with the region’s first pilot e-fuel project starting operations in 2022.
Latin America’s abundant renewable energy resources position low-carbon hydrogen as a potential low-hanging fruit for decarbonization and export growth. While domestic demand is expected to emerge in sectors such as fertilizers, heavy transport, and mining, several leading markets - such as Chile and Brazil - are pursuing export-oriented strategies targeting Europe and Asia through green ammonia, methanol and other hydrogen derivatives.
Key Highlights
- Despite already having one of the world’s cleanest power mixes, LAC’s renewable power capacity is forecast to rise from 70% in 2025 to 78% by 2035, driven by rapid solar PV and wind deployment.
- Energy storage deployment in LAC is accelerating, but remains heavily concentrated in Chile, which hosts the vast majority of the region’s active and upcoming projects.
- xEV (i.e., BEVs and hybrids) adoption in LAC remains at an earlier stage than in China, Europe, and North America, but growth is accelerating, particularly in Brazil and Argentina, where xEV sales are forecast to surpass ICE vehicle sales by 2031.
- Brazil continues to dominate LAC’s renewable fuels market, accounting for over 90% of ethanol production capacity and leading both renewable diesel and SAF development.
- CCUS deployment in LAC remains nascent, with fewer than 10 active and upcoming projects, concentrated primarily in Brazil.
- Globally, South America ranks sixth for active and upcoming low-carbon hydrogen capacity, with a total pipeline of approximately 6.9mtpa. However, less than 0.25% of this capacity is currently operational, highlighting that the region’s hydrogen market remains largely pre-commercial.
Scope
- Latin American climate targets, CO2 emissions, renewable energy potential, leaders in renewable energy, renewable energy policies, power consumption and demand, renewable power capacity and generation, decommissioning of thermal power, energy storage capacity, electric vehicle and hybrid vehicle sales, upcoming renewable refineries, biodiesel, ethanol, RD, SAFs, CCUS outlook, upcoming CCS projects, hydrogen policies, upcoming hydrogen capacity by stage, type and end use.
Reasons to Buy
- Assess how the region is increasing its solar and wind capacity, so as to reduce its reliance on hydropower, which is becoming a more variable source of renewable power due to droughts, which have been exacerbated by climate change.
- Identify who the key players are in a range of energy transition technologies, in terms of owners, as well as equipment manufacturers and EPC providers.
- Identify the development stage and legislative framework the following energy transition technologies are currently in: renewables, energy storage, EVs and hybrids, renewable fuels, CCUS, and hydrogen.
Table of Contents
List of Exhibits- Did You Know?
- Country Highlights
- Key Economic Updates and Impact of US Tariffs
- Country Snapshot
- Political Landscape
- Economic Landscape
- Social Landscape
- Technological Landscape
- Legal Landscape
- Environmental Landscape
- Outlook
- Exhibit 1: Mexico’s Performance in Terms of its Country Risk Analysis in Comparison to the Middle East and Africa and World Averages
- Exhibit 2: Performance Overview (Score: 0-100)
- Exhibit 3: Broad Categories and Weights Behind the Index
- Exhibit 4: MEXBOL Index (May 2025 - May 2026)
- Exhibit 5: Key Sectors’ Contribution to the Economy (2021-28f)
- Exhibit 6: FDI Inflows & FDI Stock (2020-24)
- Exhibit 7: Greenfield FDI Projects and Net Cross-border M&A Deals (2020-24)
- Exhibit 8: Key Infrastructure Indicators
- Exhibit 9: Real GDP and Household Consumption Growth Rate (2021-28f)
- Exhibit 10: Real GDP Growth Rate Comparison (2025)
- Exhibit 11: Volume of Exports and Imports Growth (2021-28f)
- Exhibit 12: Current Account Balance (2021-28f)
- Exhibit 13: Top Three Commodity Exports, % of Total Exports (2021-25)
- Exhibit 14: Mineral Fuels, Mineral Oils and Products of their Distillation Exports, % of World Total (2025)
- Exhibit 15: Interest Rates (May 2021 - May 2026)
- Exhibit 16: Exchange Rate and Inflation Rate (2021-28f)
- Exhibit 17: Public Finance (2021-28f)
- Exhibit 18: General Government Debt (2021-28f)
- Exhibit 19: Unemployment Rate (2021-28f)
- Exhibit 20: Average Annual Wages (2021-28f)
- Exhibit 21: Labor Force Participation Rate (2021-28f)
- Exhibit 22: Rural/urban Share of Total Population (2020, 2025, 2030f, 2035f)
- Exhibit 23: Age-group Share of Total Population (2020, 2025, 2030f, 2035f)
- Exhibit 24: Gender Split (2020, 2025, 2030f, 2035f)
- Exhibit 25: Internet Users as a Percentage of Total Population, Mobile Penetration Rate, and Broadband Penetration Rate (2025)
- Exhibit 26: Number of Patents Granted Per Million Population (2025)
- Exhibit 27: High-technology Exports, % of Manufactured Exports (2024)
- Exhibit 28: Rule of Law Index (Rankings) 2025
- Exhibit 29: Corruption Perceptions Index (Rankings) (2025)
- Exhibit 30: Renewable Electricity, Installed Capacity (2021-25)
- Exhibit 31: CO2e Emissions (2020-24)
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Petroleo Brasileiro SA
- Companhia Nacional de Gas
- AES Corporation
- Grenergy Renovables
- ENGIE
- BYD Company Ltd.
- Tesla, Inc.
- Volvo Group
- SGP BioEnergy
- POTSA
- Summit Agricultural Group
- Shell plc
- Enegix Energy
- RP Global Renewable Power
- Shizen Energia do Brasil Ltd
- TotalEnergies SE
- Electricite de France SA
- Spe Bravo Vento Projeto de Usina Eolica Maritima Ltda
- Ocean Winds SL
- Equinor ASA
- Enel SpA
- Vestas Wind Systems AS
- Siemens Energy AG
- GE Vernova Inc
- Nordex SE
- Goldwind Science & Technology Co Ltd
- Enercon GmbH
- The AES Corp
- Solatio GD Holding Gestao de Projetos de Geracao Distribuida LTDA
- Verano Energy SpA
- Grenergy Renovables SL
- Engie SA
- Atlas Renewable Energy USA LLC
- Canadian Solar Inc
- China General Nuclear Power Corp Ltd
- Brookfield Corp
- JinkoSolar Holding Co Ltd
- Trina Solar Co Ltd
- JA Solar Technology Co Ltd
- LONGi Green Energy Technology Co Ltd
- Chint Group Co Ltd
- First Solar Inc
- BYD Co Ltd
- SunPower Corp
- Power Construction Corporation of China
- Andrade Gutierrez SA
- China National Machinery Industry Corp
- Elecnor SA
- Prodiel Proyectos de Instalaciones Electricas SL
- China Energy Engineering Group Co Ltd
- Scatec ASA
- Vinci SA
- TSK Group
- Ellaktor SA
