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Lex Mundi Global Climate Change Guide

Peru

(Latin America/Caribbean) Firm Estudio Olaechea

Contributors José Antonio Honda

Updated 19 May 2021
Has your country signed/ratified the Paris Agreement? If so, what is its INDC / NDC?

Yes, Peru signed the Paris Agreement on April 22, 2006, and it was ratified on July 21, 2016, through Supreme Decree Nº 058-2016-RE. The Paris Agreement became effective in Peru on November 4, 2016.

As an NDC, Peru has committed to reducing its greenhouse gas emissions ("GHG") to 208.8 million tons of carbon dioxide (MtCO2eq) by the year 2030 (reduction of 30%). Additionally, Peru considers that, by the same year, the GHG could be reduced to 179,0 MtCO2eq (reduction of 40%), subject to the availability of external international financing and the existence of favorable conditions.

The NDC establish objectives and targets to reduce vulnerability to climate change in seven priority areas: 1) Agriculture; 2) Forests; 3) Fishing and aquaculture; 4) Health; 5) Water; 6) Tourism; and 7) Transport.

What are the key national policy instruments regarding climate change and what are the national long term greenhouse gas emissions (GHG) reduction targets?

Supreme Decree Nº 012-2009-MINAM which approves the National Environmental Policy published on May 23, 2009, has the purpose of, among others, adapting the population to climate change and establishing mitigation measures with a preemptive approach focused on sustainable development. 

Supreme Decree Nº 054-2011-PCM which approves the Strategic Plan for National Development up to 2021 was published on June 22, 2011, reaffirms the need to consider climate change as an important variable in all the instruments of development planning and management at different levels of the government.

Supreme Decree Nº 014-2011-MINAM, which approves the National Environmental Action Plan 2011-2021 published on July 9, 2011, aims to achieve the sustainable, responsible, rational and ethical use of natural resources and contribute in this way to the integral, social, economic and cultural development of human beings, in harmony with their environment.

Supreme Decree Nº 011-2015-MINAM, which approves, the National Strategy on Climate Change published on September 23, 2015, provides the commitment of the Peruvian government to act against climate change in an integrated and transversal manner, according to the international commitments assumed by Peru under the United Nations Framework Convention on Climate Change. 

Supreme Decree Nº 006-2020-MINAM, published on July 4, 2020, creates the High-Level Commission on Climate Change, whose function is to propose climate change adaptation and mitigation measures, as well as to propose the progressive increase of the NDC and supervise the development of methodologies for the reduction of GHG emissions.

Law Nº 30754 - Framework Law on Climate Change published on March 18, 2018 sets forth the following instruments for the integral management of climate change:

  • The national and regional strategies for climate change;
  • The Determined National Contributions ("NDC"); and 
  • Other instruments related to climate change.
Have national policies or legislation been adopted limiting or prohibiting the use of certain fossil fuels (e.g. coal, natural gas, nuclear)?

Law N° 28694 – Law that regulates the content of sulfur in diesel fuel published on March 22, 2006, sets forth that, as of January 1, 2010, the commercialization for intern consumption of diesel fuel which content of sulfur is above 50 parts per million by volume (ppmv). Also, said legislation prohibits (i) the import of Diesel N° 1 and Diesel N° 2 fuels which concentration levels of sulfur is above 2500 parts per million (ppm); and (ii) the commercialization in the local market of diesel fuel which content of sulfur is above 5000 ppm.

Supreme Decree N° 025-2017-EM published on September 8, 2017, approves the measures related to the content of sulfur in diesel, gasoline and gasohol for its commercialization and use. This legislation prohibits as of January 1, 2018 (i) the use and commercialization in the region of La Libertad of Diesel B5 which content of sulfur is above 50 ppm; (ii) the nationwide use and commercialization of high-octane gasoline and gasohol fuels (95, 97 and 98 octanes) which content of sulfur is above 50 ppm.

In November 2019, the Ministry of Environment created the "Peru Carbon Footprint" tool that helps to recognize how the public and private organizations have managed to control their GHG emissions for the benefit of the environment.

What specific national climate change legislation has been adopted?

Supreme Decree Nº 012-2009-MINAM which approves the National Environmental Policy published May 23, 2009, with the purpose of, among others, adapting the population to climate change and establishing mitigation measures with a preemptive approach focused on sustainable development. 

Supreme Decree Nº 013-2014-MINAM which approves the provisions for the development of the National Greenhouse Emission Inventory published on December 19, 2014, establishes a set of actions oriented to the recompilation, evaluation and systematization of information related to the emission and removal of GHG.

Law Nº 28611 - General Environmental Law published on October 15, 2015,  aims to ensure the right to a healthy, balanced, and adequate environment for the full development of life, as well as the commitment of the duty to contribute to effective environmental management and to protect the environment in order to improve the quality of life of the population and achieve the sustainable development of the country. 

Law Nº 30754 - Framework Law on Climate Change - was published on March 18, 2018, its purpose is to set forth public policies for adaptation and mitigation of climate change, in order to reduce the country's vulnerability and take advantage of the opportunities of low-carbon growth. 

On December 31, 2019, the regulations of the abovementioned Law Nº 30754 were published through Supreme Decree Nº 013-2019-MINAM. 

Does your country participate in an international or national GHG emissions trading scheme?

Peru signed the Kyoto Protocol in 2003 and ratified it in 2013. This protocol regulates the Clean Development Mechanism, which allows industrialized nations to participate in projects to reduce greenhouse gas emissions in developing countries in order to achieve sustainable development. 

On October 20, 2020, Peru and Switzerland signed a bilateral agreement that will reduce their GHG emissions in accordance with Article 6 of the Paris Agreement and will promote the financing of national projects that implement low-carbon technologies and practices. This bilateral agreement is the first in the world to be signed under Article 6 of the Paris Agreement.

Has a national CO2 tax or similar instrument been adopted?

Yes, according to the Article 64° of the Legislative Decree Nº 944 that modifies the Unified Text of the Law on General Sales Tax and Selective Consumption Tax approved by Supreme Decree N° 055-99-7-EF, there is a tax for importers and exporters of gasoline, diesel, gas oils and fuel oils. 

The price of the tax depends on the level of pollution.

Does national legislation regulate and/or subsidize carbon capture and storage (CCS)?

The regulations of the Law Nº 30754 published through Supreme Decree Nº 013-2019-MINAM only sets forth in its Seventeenth Final Complementary Disposition that the Ministry of Environmental will draft a proposed regulation for the classification and sanctions of actions related to sanctionable conducts of forest CCS and the reduction of emissions from deforestation and forest degradation ("REDD+"). 

To date, the proposed legislation has not been published yet. 

Are the production and/or use of renewable energy sources subject to a national subsidy or similar support scheme?

Yes, there are two strategies to support the use and production of renewable energy. 

(I) Legislative Decree Nº 1058 published on June 28, 2008, sets forth that the activity of electrical generation based on water resources or other renewable resources, such as wind, solar, geothermal or biomass, will have the benefit from the accelerated depreciation regime for income tax purposes.

The accelerated depreciation is applicable to machines, equipment, and civil works required for the setup and operation of the renewable energy plants, which are acquired and/or built as of the effective date of this legislative decree. For these purposes, the annual rate of depreciation shall not exceed twenty percent (20%) as a global annual tax rate.

By Law Nº 30327, published on May 21, 2015, this tax benefit has been extended until December 31, 2025.

(II) Legislative Decree No. 1002 published on May 1, 2008, encourages the use of Renewable Energy Resources ("RER") by promoting investment in electricity production through auctions for their contract award. The generation of electricity from RER awarded through these auctions will have priority for the daily dispatch of the electric charge made by the Peruvian Committee for Economic Operation of the Electrical System ("COES") as well as a fixed quota in the electricity market and a guaranteed income through rates that will remain stable.

It is important to note that, even though there have been four auctions for RER since 2016 no further calls for these auctions have been made (even though Legislative Decree states that these will be made every two years). Among other reasons for this suspension, the Peruvian government alleges that since the costs for certain RER technologies have decreased through the years, the subsidy is no longer needed. However, even though the price for some RER technologies has decreased, this is not applicable to all RER technologies.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the built environment?

The following measures have been implemented: 

The Law N° 27345 - Law for the Promotion of Efficient Energy Use published on September 8, 2000 sets forth that every piece of equipment that requires energy supply must include information on its energy consumption in its labels, packaging and publicity, under its manufacturers and importers liability.

The Regulations of the Law for the Promotion of Efficient Energy Use approved by Supreme Decree Nº 053-2007-EM on October 23, 2007, sets forth in its Article 6.3, Section e) that the Public Sector in coordination with the Ministry of Housing and Construction must implement guidelines for the efficient use of energy in the National Building Regulations, according to the geographical and climatological zones of the country. 

On January 21, 2009, Ministerial Resolution Nº 038-2009-MEM/DM was approved. This resolution sets forth the energy consumption indicators and their monitoring methodology. Article 3.1 shows the consumption indicators by sector in order to allow the Ministry of Energy and Mines to develop energy plans and actions for the following years.

On May 14, 2009, the Supreme Decree Nº 009-2009-MINAM was approved. This decree regulates the Eco-efficiency measures for the public sector and indicates the steps to save energy and reduce GHG emissions in order to achieve sustainable development.  

Through Supreme Resolution N° 005-2016-MINAM, the Multisectoral Work Group was created in order to generate technical information for the implementation of the NDC. Their final report was published on December 8, 2018, and, among others, it sets forth 62 GHG mitigation measures for different sectors and industries. From this total, 8 measures have been implemented in relation to waste management and wastewater treatment:

  • Construction of landfill sites with semi aerobic technology (potential reduction of 0.130 MtCO2eq).
  • Solid waste segregation for its material valorization in composting plants (potential reduction of 0.004 MtCO2eq).
  • Construction of landfills with centralized capture and burning of biogas (potential reduction of 0.173 MtCO2eq).
  • Utilization of the biogas generated in landfills for its energetic valorizations (potential reduction of 0.281 MtCO2eq).
  • Construction of new wastewater treatment plants in order to reduce gaps in the sanitation services (potential reduction of 0.170 MtCO2eq).
  • Covering of anaerobic lagoons and methane burning (potential reduction of 0.146 MtCO2eq).
  • Installation of anaerobic sludge digestors wastewater treatment plants methane capture and burning (potential reduction of 0.043 MtCO2eq).
  • Utilization of treated wastewater and biosolids (potential reduction of 0.001 MtCO2eq).
What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the transport sector?

The Guide for the Efficient Use of Energy and Energy Diagnosis for Transportation Sector was approved to promote measures for the efficient use of energy and their proper implementation, helping to reduce energy consumption and GHG

The Maximum Permitted Values of polluting emissions for motor vehicles approved by Supreme Decree N° 047-2001-MTC and Supreme Decree N° 010-2017-MINAM which sets forth the value of the Maximum Permitted Values ("LMP") of polluting emissions for motor vehicles in circulation, new motor vehicles to be imported or ensembled in the country in order to protect the health of the population and guarantee the care for the environment.

Through Supreme Resolution N° 005-2016-MINAM, the Multisectoral Work Group was created in order to generate technical information for the implementation of the NDC. Their final report was published on December 8, 2018, and, among others, it sets forth 62 GHG mitigation measures for different sectors and industries. From this total, 14 measures are considered in relation to transport:

  • Implementation of the complementary vehicles for the Integrated Transportation System of Lima (potential reduction of 0.172 MtCO2eq).
  • Operation of the Metropolitan Transportation System and its extensions (potential reduction of 0.077 MtCO2eq).
  • Implementation of Line 1 and 2 of the Lima and Callao Metro System (potential reduction of 0.124 MtCO2eq).
  • Promotion of natural gas for light motor vehicles (potential reduction of 0.219 MtCO2eq).
  • Promotion of cleaner fuels (potential reduction of 0.541 MtCO2eq).
  •  Promotion of electrical vehicles (potential reduction of 0.234 MtCO2eq).
  • Promotion of GNL fuel for load transport (potential reduction of 2.662 MtCO2eq).
  • Training in efficient conduction to drivers (potential reduction of 0.381 MtCO2eq).
  • National Program of Sustainable Urban Transport (potential reduction of 0.064 MtCO2eq).
  • National Program of scrapping and vehicle renovation (potential reduction of 0.105 MtCO2eq).
  • Labeling of energetic efficiency for light motor vehicles (potential reduction of 2.200 MtCO2eq).
  • Trans-Andean Tunnel Project (potential reduction of 0.145 MtCO2eq).
  • Improvement of the railway transport service of the Arica – Tacna railroad section (potential reduction of 0.004 MtCO2eq).
  • Integral rehabilitation of the Railway Huancayo – Huancavelica (potential reduction of 0.008 MtCO2eq).
What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the industry?

The Regulations of the Law for the Promotion of Efficient Energy Use approved by Supreme Decree Nº 053-2007-EM on October 23, 2007, sets forth in its article 6.2 (c) indicates that it is necessary to develop energy consumption indicators for the industrial and service sectors to guide the rest of the companies in order to achieve the efficient use of energy.

The Maximum Permitted Values of polluting emissions for industrial plants of cement and lime manufacture approved by Supreme Decree N° 001-2020-MINAM.

The Maximum Permitted Values for gas emissions of the activities of the hydrocarbon sector approved by Supreme Decree N° 014-2010-MINAM.

Through Supreme Resolution N° 005-2016-MINAM, the Multisectoral Work Group was created in order to generate technical information for the implementation of the NDC. Their final report was published on December 8, 2018, and, among others, it sets forth 62 GHG mitigation measures for different sectors and industries. From this total, 2 measures are considered in relation to industrial processes:

  • Substitution of clinker to diminish the relation clinker/cement by producing cement additives (potential reduction of 0.954 MtCO2eq).
  • Substitution of refrigerants for alternatives less likely to produce global warming (potential reduction of 0.890 MtCO2eq).
What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in agriculture and land use?

A Guide for the Efficient Use of Energy and Energy Diagnosis for Agroindustry has been approved, whose purpose is to promote measures for the efficient use of energy and its proper implementation, contributing to reduce energy consumption and greenhouse gas emissions in the different industrial sectors of the country.

Through Supreme Resolution N° 005-2016-MINAM, the Multisectoral Work Group was created in order to generate technical information for the implementation of the NDC. Their final report was published on December 8, 2018, and, among others, it sets forth 62 GHG mitigation measures for different sectors and industries. From this total, 14 measures are considered in relation to agriculture and land use, land-use change and forestry ("LUCF"):

  • Managing of the livestock production systems in the High-Andean natural pastures for the GHG reduction (potential reduction of 2.20 MtCO2eq).
  • Managing of the livestock production systems in the Andean cultivated pastures for the GHG reduction (potential reduction of 2.55 MtCO2eq).
  • Implementation of techniques for the managing of pastures for the GHG reduction in the Amazon forest (potential reduction of 1.18 MtCO2eq).
  • Conversion of rice crops for associated and permanent cultivation (potential reduction of 0.05 MtCO2eq).
  • Intermittent drying system for rice crops for the GHG reduction (potential reduction of 0.27 MtCO2eq).
  • Sustainable management of permanent crops in the Amazon forest for the GHG reduction (potential reduction of 0.28 MtCO2eq).
  • Sustainable forestall management in forestall concessions (potential reduction of 8.33 MtCO2eq).
  • Communal forestall management (potential reduction of 1.33 MtCO2eq).
  • Forest conservation mechanisms in Native Communities (potential reduction of 5.76 MtCO2eq).
  • Ensuring the future of protected natural areas (potential reduction of 1.49 MtCO2eq).
  • Assigning titles over non-categorized land in the Amazon (potential reduction of 12.20 MtCO2eq).
  • Commercial forestall plantation (potential reduction of 10.49 MtCO2eq).
  • Forestall plantation which aims to protect and restore (potential reduction of 2.15 MtCO2eq).
  • Agroforestry systems (potential reduction of 1.38 MtCO2eq).
What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the electricity production sector?

On October 23, 2007, the Supreme Decree Nº 053-2007-EM - The Regulation of the Law for the Promotion of Efficient Energy Use - was approved.

On May 28, 2010, Supreme Decree Nº 026-2010-EM was published. It modifies the Regulation of Organization amending the Regulation of Organization and Functions of the Ministry of Energy and Mines. 

Under this decree, the General Department of Energy Efficiency was created, which is responsible for proposing and evaluating the policy of energy efficiency and non-conventional renewable energies in order to create a culture of efficient and rational use of energy. 

Through Supreme Resolution N° 005-2016-MINAM, the Multisectoral Work Group was created in order to generate technical information for the implementation of the NDC. Their final report was published on December 8, 2018 and, among others, it sets forth 62 GHG mitigation measures for different sectors and industries. From this total, 24 measures are considered in relation to stationary combustion energy:

  • Combination of renewable energies (potential reduction of 3.793 MtCO2eq).
  • Electricity supply with RER in non-connected areas (potential reduction of 0.008 MtCO2eq).
  • Cogeneration (potential reduction of 0.713 MtCO2eq).
  • Transformation of the lighting market for residential sectors (potential reduction of 0.181 MtCO2eq).
  • Substitution of public street lighting: LED lamps instead of high-pressure sodium vapor lamps (potential reduction of 1.104 MtCO2eq).
  • Energy efficiency labelling (potential reduction of 0.448 MtCO2eq).
  • Energetic audits in the public sector (potential reduction of 0.061 MtCO2eq).
  • Substitution of low efficiency lamps to LED lamps in the public sector (potential reduction of 0.002 MtCO2eq).
  • Clean cooking (potential reduction of 1.926 MtCO2eq).
  • Energetic efficiency in the industrial sector (potential reduction of 0.086 MtCO2eq).
  • Energetic efficiency in the commercial sector (potential reduction of 0.004 MtCO2eq).
  • Distributed generation (potential reduction of 0.036 MtCO2eq).
  • Substitution of electrical heating to solar water heaters (potential reduction of 0.510 MtCO2eq).
  • Installation of fans and change to gasifier ovens in small brick kilns (potential reduction of 0.210 MtCO2eq).
  • Change to higher energetic efficiency ovens and change of fuels in industrial brick kilns (potential reduction of 0.480 MtCO2eq).
  • Use of waste derived fuels as a substitute of fossil fuels in clinker production ovens (potential reduction of 0.175 MtCO2eq).
  • Improvement of the energetic efficiency in production process of cement in order to reduce the electric energy consumption (potential reduction of 0.119 MtCO2eq).
  • Energetic efficiency through integral interventions in the manufacture sector (potential reduction of 0.020 MtCO2eq).
  • Promotion of sustainable construction in new edifications (potential reduction of 0.009 MtCO2eq).
  • Energetic efficiency in sanitation services (potential reduction of 0.008 MtCO2eq).
  • Reduction of non-billed water in sanitation services (potential reduction of 0.016 MtCO2eq).
  • Pressure control in water services (potential reduction of 0.016 MtCO2eq).
  • Use of RER and energy generation in sanitation services systems (potential reduction of 0.028 MtCO2eq).
  • Segregation of inorganic solid waste for its material valorization (potential reduction of 0.007 MtCO2eq).
What measures are national financial institutions (incl. banks, pension funds, asset management companies and insurance companies) aimed at reducing the GHG emissions of their customers?

In November 2019, the Ministry of Environment created the "Peru Carbon Footprint" tool that helps to recognize how the public and private organizations have managed to control their GHG emissions for the benefit of the environment.

This tool sets forth 4 levels of recognition: (i) the calculation of emissions; (ii) the verification of said emissions; (iii) the reduction of the emissions; and (iv) the neutralization of the carbon footprint. Up to date, the following entities have reached the first level of recognition: Ministry of Environment, Cargo Transporte, Unique, Alwa Ingenieria Sostenible, Libelula Comunicacion Ambiente y Desarrollo, America Movil, Red de Energia del Peru and Sedapal (Lima’s provider of water and sanitation services). Up to 2020, there were more than 25 organizations registered in the "Peru Carbon Footprint" tool and ready to report their emissions.

Also, the Banco de Credito del Peru, one of Peru’s most important financial entities, has signed in January 2013 the Principles of Equator which is a framework for the management of risks of financial entities in order to determine, evaluate and manage the environmental and social risks of projects. 

As part of their obligations, the financial entities must report GHG emissions to projects which emissions are above 100 000 t CO2 eq. These projects must perform an evaluation of the cost-effective options which are technical and financially viable in order to reduce GHG emissions related to the project during its design, construction, and operation.

Are there prominent national climate change litigation cases in your country? If so please provide a short description (e.g. plaintiffs/defendants, public or civil law based, etc.).

There is a case involving an electric power producer in Germany. In November 2015, Mr. Saúl Luciano Lliuya - a Peruvian tourist guide living in Huaraz, Peru - with the support of the ONG GermanWatch filed a lawsuit for damages in District Court Essen, Germany against Rheinisch-Westfälisches Elektrizitätswerk ("RWE"), one of Germany's largest power producer. 

It was claimed by Mr. Lliuya that the company, even though it does not operate in Peru, knowingly contributed to climate change by emitting substantial volumes of GHG, and was, therefore, responsible for the melting of mountain glaciers near Huaraz that caused a series of threats to a lake called Palcacocha which is near the plaintiff’s property and could cause damages. 

On December 15, 2016, the District Court Essen dismisses the civil lawsuit against RWE. However, in January 2017, Mr. Lliuya filed an appeal before the Higher Regional Court Hamm against the negative ruling of the Regional Court Essen.

To this date, the Higher Regional Court Hamm has not issued a ruling yet. Since an inspection to the premises that are the subject of the lawsuit is pending and delayed due to the COVID-19 crisis.

Climate change policies, measures or legislation (other than those covered by the questions above)

No additional policies, measures or legislation. 

Lex Mundi Global Climate Change Guide

Peru

(Latin America/Caribbean) Firm Estudio Olaechea

Contributors José Antonio Honda

Updated 19 May 2021