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<\/figure>\n\n\n\nClimate change is defined as the long-term alteration of the planet's temperatures and atmospheric patterns, primarily driven by human activity such as the burning of fossil fuels and deforestation.<\/p>\n\n\n\n
This environmental phenomenon resulted in global warming, which began to be felt throughout the world in the second half of the 20th century, and which has been produced by the increase in the emission of greenhouse gases, such as carbon dioxide, methane, and nitrous oxide.<\/p>\n\n\n\n
Today, the tangible consequences of this phenomenon at a global level can be seen in everyday life, and with increasing intensity, through:<\/p>\n\n\n\n
-The increase in temperatures, as the planet is registering more frequent and prolonged extreme heat globally than in the past;<\/p>\n\n\n\n
-Severe storms, floods and hurricanes that are becoming increasingly destructive.<\/p>\n\n\n\n
-Droughts and scarcity, as sources of fresh water such as rivers and lakes decrease and affect crops, generating health risks and food crises.<\/p>\n\n\n\n
-Loss of wildlife, as many species of flora and fauna become extinct when they lose their natural habitats.<\/p>\n\n\n\n
It is for the above reasons that by the early 1990s there was already an international awareness to counteract the effects of climate change globally through the energy transition, by adopting government policies and large-scale industrial transformations, which aimed to drastically reduce greenhouse gas emissions to curb global warming through the following actions:<\/p>\n\n\n\n
-The decarbonization of the energy matrix of different countries throughout the world, in order to completely replace energy generation through coal and oil with renewable energy systems, which are by definition virtually inexhaustible and environmentally friendly energy sources, such as solar, wind, geothermal, biomass and hydroelectric, among others; and<\/p>\n\n\n\n
-Sustainable mobility, with the aim of prioritizing the use of electric or zero-emission vehicles in transportation at the national level.<\/p>\n\n\n\n
We can say that the right to energy transition in El Salvador was born with the celebration of the UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE,<\/strong> which was an international treaty signed in the city of Rio de Janeiro, Brazil at the Earth Summit during the month of May 1992, but which was ratified and adopted by our country in the month of August 1995.<\/p>\n\n\n\n As one of the developing countries that signed this international treaty, El Salvador made general commitments toward global climate action, based on the principle of common but differentiated responsibilities. This means that our country was not subjected to rigid numerical targets for reducing greenhouse gas emissions like developed countries, but rather to obligations related to management, reporting, and adaptation, such as:<\/p>\n\n\n\n -To prepare, update and periodically publish national inventories of greenhouse gas (GHG) emissions by sources and their absorption by sinks;<\/p>\n\n\n\n -Submit periodic reports on the situation in the country and the measures implemented to comply with the Convention;<\/p>\n\n\n\n -Formulate and implement plans aimed at mitigating climate change by reducing emissions in key sectors such as energy, agriculture and land use;<\/p>\n\n\n\n -To promote scientific research, information exchange and collaboration in clean or low-emission technologies; and<\/p>\n\n\n\n -Promote education, training and public awareness about climate change.<\/p>\n\n\n\n Subsequently, in December 1997, the event was held in Kyoto, Japan. Kyoto Protocol to the United Nations Framework Convention on Climate Change<\/strong>, which was signed by our country in June 1998, was ratified in November 1998, but did not enter into force globally until February 2005.<\/p>\n\n\n\n As a developing country not included in Annex I of the 1992 United Nations Framework Convention on Climate Change, El Salvador did not acquire mandatory targets or quantitative limits for reducing greenhouse gas emissions, as its obligations focused mainly on cooperation, the preparation of national inventories and the facilitation of Clean Development Mechanism (CDM) projects.<\/p>\n\n\n\n By ratifying this international treaty, El Salvador maintained the general mitigation and adaptation commitments adopted in 1992, but also committed to promoting participation in the Clean Development Mechanism (CDM), in order to regulate voluntary participation to host emissions reduction projects financed by industrialized nations, and to ensure that these projects contribute directly to local sustainable development, especially in clean energy sectors.<\/p>\n\n\n\n The Clean Development Mechanism (CDM), established under the CDM Protocol, allows industrialized countries to finance greenhouse gas reduction projects in developing nations. In return, these developing countries receive Certified Emission Reductions (CERs) to help them meet their own climate goals, thereby promoting clean technologies and sustainable development at a lower cost.<\/p>\n\n\n\n Certified Emission Reductions (CERs) are carbon credits issued by the United Nations, which individually are equivalent to avoiding or reducing the emission of one tonne of carbon dioxide into the atmosphere, and serve as an economic incentive to finance green projects in developing countries by industrialized countries or companies, such as solar or wind power plants, the efficient use of boilers in industries, the capture of methane in landfills and the reforestation and care of forests.<\/p>\n\n\n\n This is how the Kyoto Protocol spurred the creation from scratch of the current Environmental Law in El Salvador in May 1998, as well as the birth of the Ministry of Environment and Natural Resources (MARN) itself.<\/p>\n\n\n\n Before 1998, our country lacked a comprehensive legal framework and an Executive Branch institution dedicated to regulating climate change or preserving natural resources, and it was these two global climate commitments that finally forced the State of El Salvador to institutionalize environmental management and create an entity that would be in charge of everything related to the Clean Development Mechanism (CDM).<\/p>\n\n\n\n Subsequently, in October 2007, the following was approved in our country: LAW CREATING THE NATIONAL ENERGY COUNCIL,<\/strong> through which said Council was created as a public law institution whose purpose would be the establishment of state policy and strategy for the efficient development of the energy sector.<\/p>\n\n\n\n It is from the creation of this entity that the government of El Salvador focuses on carrying out, as a national public policy, the promotion of increased electricity generation using renewable sources through local and foreign investments, thus approving in December 2007 the LAW ON TAX INCENTIVES FOR THE PROMOTION OF RENEWABLE ENERGIES IN ELECTRICITY GENERATION,<\/strong> which established tax incentives for the development of projects with renewable generation technologies, such as solar, wind, geothermal, hydroelectric, biogas and biomass.<\/p>\n\n\n\n The law established the following tax incentives:<\/p>\n\n\n\n -Total exemption from the payment of import duties on goods to be used in the investment for the construction and expansion of power plants for the generation of energy based on renewable resources;<\/p>\n\n\n\n -Total exemption from income tax for periods of 5 to 10 years on income generated directly from renewable energy generation, depending on whether the generation projects have an installed capacity of 10 megawatts (MW) or less, or if they are greater than 10 megawatts (MW); and<\/p>\n\n\n\n -Total exemption from the payment of all types of taxes on income derived directly from the sale of Certified Emission Reductions (CERs) of the Clean Development Mechanism (CDM) created under the Kyoto Protocol.<\/p>\n\n\n\n It was subsequently approved in March 2009 <\/strong>he REGULATIONS OF THE LAW ON TAX INCENTIVES FOR THE PROMOTION OF RENEWABLE ENERGIES IN ELECTRICITY GENERATION<\/strong>, in order to develop said law and facilitate its application.<\/p>\n\n\n\n It is from the validity of this law and its regulations that a before and after is marked in the progress of the energy transition in El Salvador, since from there begins a real change and diversification of the national energy matrix, through the development and expansion of different projects and power generation plants from non-conventional renewable sources, mainly photovoltaic solar technology, and to a lesser extent wind and biomass based on sugar cane bagasse in the harvest season.<\/p>\n\n\n\n In June 2012, the UNITED NATIONS CONFERENCE ON SUSTAINABLE DEVELOPMENT (RIO+20),<\/strong> in the city of Rio de Janeiro, Brazil, which marked the twentieth anniversary of the historic Earth Summit of 1992.<\/p>\n\n\n\n Although El Salvador did not acquire legally binding obligations at this conference, given that the final document agreed upon by the member states, entitled "The Future We Want," consisted of a declaration of voluntary political commitments and guidelines for collective action, our country, as a signatory state, assumed the political and moral responsibility to align its national public policies with the following global agreements:<\/p>\n\n\n\n -He pledged to implement green economy models adapted to his national context;<\/p>\n\n\n\n -He committed to actively participating in the design and subsequent adoption of the Sustainable Development Goals (SDGs);<\/p>\n\n\n\n -It accepted the directive to strengthen its own environmental and governance institutions to respond in a more integrated way to the three pillars of sustainable development: economic, social and environmental; and<\/p>\n\n\n\n -It adhered to the framework of 10-year programs aimed at gradually modifying sustainable consumption and production patterns, promoting resource efficiency at the industrial and community levels.<\/p>\n\n\n\n Then in September 2013, the LAW REGULATING THE GRANTING OF CONCESSIONS FOR SMALL-SCALE ELECTRICITY GENERATION PROJECTS<\/strong>, which established a mechanism for granting concessions to natural or legal persons who operate small-scale electricity generating plants based on hydraulic or geothermal resources with a nominal capacity equal to or less than 5 megawatts (MW).<\/p>\n\n\n\n The purpose of this law was to resume and expedite the completion of a series of small-scale projects in advanced stages of development, whose concession process had to be regulated as a result of the unconstitutionality ruling issued on June 27, 2012 by the Constitutional Chamber of the Supreme Court of Justice, in which it resolved that, due to the public nature of hydraulic and geothermal resources, it was essential that the legislative assembly authorize said concessions from the date of the ruling, since previously these concessions were authorized only by SIGET, which was the regulatory entity of the electricity sector at that time.<\/p>\n\n\n\n In September 2015, the 2030 AGENDA FOR SUSTAINABLE DEVELOPMENT,<\/strong> through Resolution 70\/1 of the United Nations General Assembly in New York City, in the United States of America.<\/p>\n\n\n\n It was in this resolution that the 17 sustainable development goals (SDGs) were created.<\/p>\n\n\n\n Among the commitments adopted by El Salvador through this resolution, we can mention the following:<\/p>\n\n\n\n -Integrate the 17 SDGs and their targets into the State's development plans and budgets; and<\/p>\n\n\n\n -Combat climate change, protect natural resources and promote clean energy.<\/p>\n\n\n\n Among the 17 Sustainable Development Goals adopted, the following are worth mentioning:<\/p>\n\n\n\n \u2013Affordable and clean energy:<\/strong> Ensuring access to clean and modern energy.<\/p>\n\n\n\n \u2013Climate action:<\/strong> Take urgent action to combat climate change and its effects.<\/p>\n\n\n\n Subsequently, in December 2015, the event was held in the city of Paris, France. PARIS AGREEMENT OF THE UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE,<\/strong> which was signed by our country in April 2016, ratified in November 2016 and entered into force that same month.<\/p>\n\n\n\n Under this international treaty, El Salvador is obligated to submit and periodically update its Nationally Determined Contributions (NDCs). These commit the country to reducing greenhouse gas emissions and improving climate resilience through national targets.<\/p>\n\n\n\n Among the main commitments acquired by our country through this international treaty, we can mention the following:<\/p>\n\n\n\n -Reduce polluting gases in key sectors.<\/p>\n\n\n\n -Improve the generation and efficient use of energy;<\/p>\n\n\n\n -Increase the country's capacity to cope with climate damage;<\/p>\n\n\n\n -Protect areas and communities vulnerable to climate risk;<\/p>\n\n\n\n -Submit updated climate action plans to the Convention every five years; and<\/strong><\/p>\n\n\n\n -Measure and report national progress in adaptation and emissions reduction.<\/p>\n\n\n\n Subsequently, through Agreement SIGET 367-E-2017 issued by the General Superintendency of Electricity and Telecommunications (SIGET) in October 2017, the STANDARD FOR END USERS PRODUCING ELECTRIC POWER WITH RENEWABLE RESOURCES (UPR STANDARD)<\/strong>.<\/p>\n\n\n\n This regulation governs in El Salvador the technical, design, safety and connection requirements for customers who generate clean energy for their own consumption from renewable sources, and the exceptional handling of surpluses, with the following objectives:<\/p>\n\n\n\n -Define rules for connecting renewable energy systems without participating in the Wholesale Market;<\/p>\n\n\n\n -To meet the domestic demand for the associated supply; and<\/p>\n\n\n\n -Regulate the temporary and exceptional injection of surplus energy into the distribution network.<\/p>\n\n\n\n It is from the issuance of this regulation that the Salvadoran state establishes a clear regulation so that companies and people can produce their own energy from renewable sources such as solar and wind energy, in order to reduce their electricity bill, being able to deduct from said bill the surpluses of the energy that they produce and that they can inject into the distribution network.<\/p>\n\n\n\n Then in May 2021, the following was approved in El Salvador: LAW ON THE PROMOTION AND INCENTIVES FOR THE IMPORTATION AND USE OF ELECTRIC AND HYBRID MEANS OF TRANSPORT<\/strong>, The Salvadoran state is promoting one of the main components of the energy transition, which is sustainable mobility, in order to prioritize the use of electric or zero-emission vehicles in transportation nationwide.<\/p>\n\n\n\n This law was enacted to regulate tax benefits and the technical framework to facilitate the entry and use of eco-friendly vehicles and their charging stations in El Salvador, with the aim of reducing fuel consumption and protecting the environment.<\/p>\n\n\n\n Among the tax incentives established by this law, we can mention the following:<\/p>\n\n\n\n -0% tax for bringing electric and hybrid vehicles into the country;<\/p>\n\n\n\n -Exemption from the Tax on the Transfer of Movable Goods and Services on the importation of new motor vehicles and charging equipment; and<\/p>\n\n\n\n -Exemption from the special tax on the first registration in the national territory.<\/p>\n\n\n\n This law also regulated permits and standards for installing public and private charging stations, empowering the regulatory entity of the electricity sector to define rules of operation and energy trade for electric mobility.<\/p>\n\n\n\n In October 2021, the following was approved in our country: LAW CREATING THE GENERAL DIRECTORATE OF ENERGY, HYDROCARBONS AND MINES,<\/strong> through which the General Directorate of Energy, Hydrocarbons and Mines (DGEHM) is created, as a government institution of public law in charge of the formulation, adoption, monitoring and evaluation of compliance with the policies, strategies, plans and regulation of the Energy, Hydrocarbons and Mines sectors.<\/p>\n\n\n\n This law concentrated in this new government entity all the powers previously held by the National Energy Council (CNE) regarding the management of El Salvador's energy policy, coming into effect in November 2022.<\/p>\n\n\n\n Then in September 2025, the GEOTHERMAL ENERGY LAW<\/strong>, which was created with the purpose and vision of being able to develop the generation of geothermal energy through local and foreign private investment in the coming years, considering that El Salvador has a high geothermal potential, due to its location in the Pacific Ring of Fire and its volcanic chains.<\/p>\n\n\n\n This law came into effect in March 2026.<\/p>\n\n\n\n Among the main aspects regulated by this law, we can mention the following:<\/p>\n\n\n\n -The prospecting, exploration and concession phases for the exploitation of subsurface heat;<\/p>\n\n\n\n -The granting of concessions and rights of use of the subsoil through public bidding or direct contracting, including simplified permits for small projects of up to 5 megawatts;<\/p>\n\n\n\n -The granting of investment incentives through tax benefits, such as the exemption of import duties on goods to be used in geothermal generation and exemption from Income Tax for new investments in this type of generation; and<\/p>\n\n\n\n -The requirements for permits, investment plans and total dismantling of the infrastructure at the end of the concession, in order to comply with regulations to protect the natural environment.<\/p>\n\n\n\n During the month of November 2025, the following was approved in our country: LAW TO PROMOTE THE USE OF RENEWABLE ENERGY<\/strong>, which introduces for the first time a law that regulates the sustainability of the energy matrix and the use of renewable sources for self-consumption, storage and reinjection of surpluses into the grid.<\/p>\n\n\n\n This law regulates and promotes the following activities:<\/p>\n\n\n\n -The marketing of clean energy generation equipment and systems;<\/p>\n\n\n\n -The acquisition of technology for self-consumption in homes and businesses; and<\/p>\n\n\n\n -Technical standards for returning excess energy to the distribution network.<\/p>\n\n\n\n For these purposes, this law also establishes tax incentives, such as exemption from Income Tax, withholdings and Import Duties (DAI) for suppliers of these technologies that are duly qualified by the regulatory entity of the energy sector, and for end users it also establishes the exemption of taxes on the purchase and installation of this type of equipment, and the right to deduct these expenses from taxable income.<\/p>\n\n\n\n Then, in April 2026, the latest reforms were approved to <\/strong>the GENERAL ELECTRICITY LAW,<\/strong> in order to <\/strong>To regulate in our secondary legislation everything pertaining to distributed generation in El Salvador, since previously the relationship between distributors and distributed generators was regulated contractually in a private manner and with a greater degree of discretion for the contracting parties, which is modified by these reforms, establishing that the General Directorate of Energy, Hydrocarbons and Mines (DGEHM) will issue the guidelines that the distribution supply contracts (CAD) will have, establishing their prices, in order to promote competition and the transfer of the benefits of the same to the tariff of the end users.<\/p>\n\n\n\n Likewise, this law establishes that the General Directorate of Energy, Hydrocarbons and Mines (DGEHM) will now be responsible for the distributed generation studies from which the maximum generation capacity to be interconnected to the distribution networks will be determined, considering the capacities of said networks.<\/p>\n\n\n\n In addition to the above, these reforms introduce for the first time the regulation of energy storage systems in El Salvador, defining their concept and establishing that distributed generators with distribution supply contracts may install this type of storage systems.<\/p>\n\n\n\n Also in April 2026, the following was also approved in our country: SPECIAL REGULATIONS OF THE LAW ON THE PROMOTION OF THE USE OF RENEWABLE ENERGY,<\/strong> In order to develop this law and facilitate its application, the following aspects are specifically regulated:<\/p>\n\n\n\n -Local self-consumption, remote self-consumption and virtual plants;<\/p>\n\n\n\n -The import, sale, marketing, implementation and approval of equipment; and<\/p>\n\n\n\n -The connection, operation, maintenance, supervision and monitoring of the network, modifying the previous connection procedures and defining the processing times and the technical documentation to be submitted.<\/p>\n\n\n\n This regulation also establishes the technical criteria that systems with storage (BESS) must have and their UPR injection limits.<\/p>\n\n\n\n Finally, this regulation partially repeals the existing UPR regulations since 2017, establishing that this regulation will prevail over any other rule that contradicts it.<\/p>\n\n\n\n It is a fact that the approval of the Law for the Promotion of the Use of Renewable Energy and its Regulations, as well as the approval of the latest reforms to the General Electricity Law in April 2026, mark a significant advance on the path to the energy transition, reiterating that there is a national public policy that seeks to clearly and decisively incentivize the growth and development of distributed generation in El Salvador, in order to substantially increase the number of End Users Producing Energy from renewable sources in the coming years throughout the national territory.<\/p>\n\n\n\n Finally, it is also worth mentioning that in July 2026 new reforms to the LAW CREATING THE GENERAL SUPERINTENDENCY OF ELECTRICITY AND TELECOMMUNICATIONS, and the LAW CREATING THE GENERAL DIRECTORATE OF ENERGY, HYDROCARBONS AND MINES,<\/strong> Through these laws, the General Directorate of Energy, Hydrocarbons and Mines (DGEHM) acquires by law all the powers, competencies and assets that the General Superintendency of Electricity and Telecommunications (SIGET) previously held as the regulatory entity of the electricity sector in El Salvador. Therefore, from the date of their enactment, the DGEHM becomes the only government entity that regulates the electricity sector, being responsible for organizing and administering the Electricity Registry that was previously managed by SIGET.<\/p>\n\n\n\n For its part, the Superintendency is renamed \u201cGeneral Superintendency of Telecommunications (SIGET)\u201d, and remains only as the government entity regulating the Telecommunications sector in El Salvador.<\/p>\n\n\n\n This reform aims to organize the energy sector by eliminating the duality that existed in the coordination of various processes and procedures in which both SIGET and DGEHM were previously involved.<\/p>\n\n\n\n While there has been considerable progress in developing energy transition law in El Salvador, it has been regulated in a fragmented manner across several laws, and there remain vital issues related to the electricity sector that, in our view, pose a future challenge and must be regulated for the development and growth of said sector, such as:<\/p>\n\n\n\n 1-The regulation of energy efficiency in our country, which is one of the main components of the energy transition as such;<\/p>\n\n\n\n 2-The regulation of energy storage systems for wholesale market participants, considering that currently there is only regulation for the retail market;<\/p>\n\n\n\n 3-The creation of a modern energy transition and climate change law, which will consolidate the regulation of these issues in an orderly and comprehensive manner into a single body of law, since it is enough to look at the Spanish and Colombian legislation that currently regulate all these issues to see that, although much progress has been made in the energy transition, there are still many aspects that can be improved for the future; and<\/p>\n\n\n\n 4-The creation of a law on green hydrogen that regulates, promotes and incentivizes the production, storage, transport and use of this clean energy sector.<\/p>\n\n\n\n However, despite the above, we see a promising future for our country in the development of renewable energies and in deepening the energy transition.<\/p>\n\n\n\n <\/p>","protected":false},"excerpt":{"rendered":" Por: Jos\u00e9 Luis Ch\u00e1vez, asociado senior El cambio clim\u00e1tico se define como la alteraci\u00f3n a largo plazo de las temperaturas y los patrones atmosf\u00e9ricos del planeta. Principalmente impulsado por la actividad humana, tal como la quema de combustibles f\u00f3siles y la deforestaci\u00f3n. Este fen\u00f3meno ambiental trajo como consecuencia el calentamiento global que comenz\u00f3 a percibirse […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"rs_blank_template":"","rs_page_bg_color":"","slide_template_v7":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-93813","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n