Overview

Chile, with a 4,000 mile-long coastline, is strongly affected by climate change. According to the United Nations Framework Convention on Climatic Change, the country is vulnerable on seven of the nine defined criteria:  1) low altitude coastal land; 2) arid and semi-arid zones; 3) forest zones; 4) territory susceptible to natural disasters; 5) areas prone to drought and desertification; 6) urban zones with atmospheric contamination; and 7) mountain ecosystems. The country has experienced high temperatures through heat waves, prolonged droughts, landslides, crop production migration, and receding glaciers that impact infrastructure.

Chile faces several environmental issues, both urban and rural, among them: 

Atmospheric contamination:  The 2021 World Air Quality Report ranks Santiago as the 30th most air polluted regional capital city in the world, and Chile as 40th in air quality. The main causes of air pollution are related to the burning of fossil fuels, and mining activities. Transportation and wood burning for heat during winter are also significant sources of atmospheric contamination. The government has developed separate Prevention and/or Atmospheric Decontamination Plans (PPDA) for different regions according to their specific challenges. In cities these plans feature promoting the use of bicycles, regulations for efficient non-contaminant engines and electric engines, emission control, and the construction and maintenance of green areas. In rural areas, the state and municipalities offer subsidies to replace wood burning stoves and heaters for wood pellet or electric heating systems.

Water resources scarcity and pollution: Chile is in the 14th year of water scarcity, a consequence of climate change that has led to limited rainfall, the shrinking of glaciers, diminished snow reserves in the mountains, and the depletion of aquifers. The most critically impacted industries are agriculture and mining, but individuals are also affected. Rainfall deficit is estimated to be as high as 80 percent in the northern and central regions. Water is used inefficiently, especially in agriculture, and grey waters are not recycled presenting an opportunity for technology and equipment to resolve these challenges.  

The agricultural sector is the largest user of consumptive water (72 percent), followed by drinking water (12 percent), industrial consumption (7 percent), and mining (4 percent). The remaining 5 percent is associated with the livestock sector and electricity generation. Mining operations in northern Chile utilize eleven water desalination plants and three seawater impulse systems, which represent 25 percent of the fresh, non-recirculated water for their operations.

Approximately 95 percent of the water utility system is urban and privatized but regulated by the Chilean state. The system allowed for 100 percent treatment of sewage water in ten years. The privatized system is competent, and economic incentives result in highly efficient operations.

Water is legally a national asset and property of the Chilean state. The General Directorate of Waters grants water rights under the Water Code. Water property is separate from land property, and individuals and corporate entities can petition the Chilean government to extract and use water for certain purposes. Water rights are legal transferable property and protected by the current Chilean constitution. In September 2022, Chileans rejected a new constitution that included changes to water rights that would have made water rights nontransferable and establish a new agency for issuing water rights. Despite the rejection, reforms to the country’s water rights may be undertaken by the Chilean government.

Solid waste management and recycling:  With a rising standard of living, Chile’s generation of municipal solid waste (MSW) has increased significantly in the last decade. More than 19.6 million tons of waste are generated each year, 53 percent come from industrial production, 42 percent from municipal waste, 2 percent from water treatment plants, and 3 percent are derived from hazardous products. Average daily solid waste generation per capita is almost 1.2 kilograms, the second highest in Latin America after Mexico. Approximately 95 percent of solid waste ends up in garbage dumps. According to a study by Fundación Chile, oceans are contaminated with solid waste, and fishing leaves up to 290 tons of plastics each year.

Nearly all Chilean households have access to municipal collection services and each municipality is responsible for collecting and disposing of its own waste. According to a study by the Ministry of the Environment, 33 percent of Chile’s waste is recyclable, but only 10 percent is recycled. The Extended Producer Responsibility Law (Law 20.920, or Ley REP) establishes a legal framework that mandates that manufacturers and importers recycle six products: oil & lubricants, electronic devices, industrial/vehicle batteries, packaging materials and containers, tires, and small batteries. The law establishes 12 waste collection and recovery goals that will begin to take effect in September 2023. The law also sets a goal of 30 percent recycled waste in five years. As a result of the new regulations and standards, there is an increasing demand for new environmental solutions, technologies, and recycling among Chilean industry and population.

Soil loss, deterioration, and pollution:  As a result of groundwater extraction, extensive agriculture and livestock farming, intensive tree felling, urban expansion, wildfires, desertification, and erosion, a portion of land has lost its fertile characteristics. Some land is contaminated because of industrial, cattle and agriculture activity, as well as illegal waste and contaminants disposal. Environmental management services must be developed to improve soil loss, deterioration, and pollution. Food innocuity, both for internal use and exports, require the use of safe fertilizers and pesticides, including organic, and natural soil enhancers.  

Table: Total Market Size for Environmental Technologies

Units: US$ million

Source: Global Trade Atlas (HTS 841960, 842121, 842129, 842139, 842199, 847410, 841780, 841790, 947982, 947989, 902519, 902610, 902710, 972720, 902820)  

Several key government agencies are responsible for the regulation of environmental technologies. The Ministry of the Environment is responsible for the design and application of policies, plans and programs related to the environment, and the protection and conservation of biological diversity and natural resources (renewable resources and water). The Superintendency of the Environment, under the Ministry of Environment, is responsible for executing, organizing, and coordinating the monitoring and inspection of the Environmental Qualification Resolutions, the measures of the PPDAs, the content of the Environmental Quality Standards and Emission Standards, and Management Plans, when appropriate, and other tools of an environmental nature established by law. The Environmental Evaluation Agency is a preventive environmental management instrument with authority to evaluate projects for compliance with current environmental legislation.

Leading Sub-Sectors

Water treatment/management and conservation and recycling systems are the most promising sub-sectors. Although Chile has 100 percent coverage of sewage treatment, there is still a need for water conservation and reuse technologies, especially for grey waters from households and mining. The country is an important market for suppliers of different technologies to obtain clean water, efficiently use available water, recycle grey water, and reuse water whenever possible. The agriculture sector should invest in new technologies to reduce the amount of water used, and efficiently use it for crop production.

Air pollution control equipment is also in high demand. In central Chile, especially in the Santiago Metropolitan Region, air pollution is the result of increased industrialization and environmental factors that continue to affect the region’s climate and urban growth. Santiago sits between two mountain ranges, the Andes and the Cordillera de la Costa (coastal mountain range), creating a stale air pocket in the valley with minimal ventilation, and greenhouse effect. According to the Ministry of Environment, PM2.5, PM10, CO, NO2, and O3 are Chile’s main air pollutants. In southern Chile, colder than the central region, homes use firewood for heating, and smoke/pollution is high because non-dry wood is used. The Chilean government implemented subsidy programs to replace firewood heating systems, but coverage is not sufficient. Efficient and inexpensive heating systems are in demand since energy costs in Chile are among the highest in Latin America.

Waste management/recycling equipment and service companies will also find opportunities in Chile. The new Extended Product Responsibility Law will force the industry to recycle six priority products, either directly or through outsourcing services. Only 5 percent of tires, 7 percent of batteries, less than 2 percent of large and small appliances, and 17 percent of computer equipment are recycled. Importers and producers will require clean production technologies and recycling processes and equipment to comply with the new regulations.

Opportunities                                                

• Desalination Plants: Chile currently has 18 desalination plants and has announced plans to build 15 desalination plants or bracket water delivery systems. By 2031, over half of the water resources that are used in mining will come from continental water and 47 percent from the ocean. Current projects include multipurpose water desalination plants.

• Rural Potable Water: The Ministry of Public Works (MOP) announced that it will invest $342 mil

• Reservoir Construction: The Ministry of Public Works (MOP) will invest $6 billion for the construction of 26 reservoirs across the country.

• Construction waste reduction:  Approximately 30 percent of construction materials are wasted, and the industry must reduce its solid waste. Industrialized construction, efficient design, and construction management software are good opportunities.

Resources

• Ministerio de Obras Públicas (Ministry of Public Works, MOP)
• Ministerio del Medio Ambiente (Ministry of Environment, MMA)
• Superintendencia del Medio Ambiente (Superintendency of the Environment, SMA)
• Centro de Recursos Hídricos para la Agricultura y la Minería (Water Resources Center for Agriculture and Mining, CRHIAM)
• Consejo Minero (Mining Council)

For more information about opportunities in this sector contact U.S. Commercial Service Chile Commercial Specialist Mary Lathrop.