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A closer look at just transition policies
Chile

Just Transition Strategy in the Energy Sector

Region
Americas
Country
Chile
Originator/Owner
Government Ministries And Agencies National Level
Coordinating/Lead actor
Ministry of Energy
Policy type
Strategies Plans Frameworks Roadmaps Blueprints
Policy areas
Industrial and sectoral policies, Macroeconomic and growth policies, Rights, Skills development, Social dialogue and tripartism, Social protection
Environmental focus
Climate change, Pollution
Target groups
Employers, Micro, small and medium-sized enterprises (MSMEs), Women, Workers
Sectoral focus
Energy, Extractives
Crosscutting themes
Circular economy, Employment/job creation, Gender equality, Green economy
Date of Adoption
December 2021
Timeframe
2019-2050
2019
Agreement on coal phase-out
Apr 2020
Chile's first updated NDC
Dec 2021
Strategy for Just Transition in the Energy Sector published
Dec 2023
Tocopilla's local just transition plan published
2040
Coal phase-out goal
2050
Carbon neutrality goal
Estrategia de Transición Justa en el sector Energía – Parte I: Acompañando el cierre y nuevos usos de centrales a carbón en Chile.
Spanish, PDF

Chile's Just Transition Strategy in the Energy Sector is the country's first structured framework to manage the social and economic impacts of closing its power plants.

The Strategy followed an agreement between the national government and all electricity generation companies operating coal plants in Chile to phase out coal power by 2040. Beginning with a voluntary agreement in 2018 to halt the construction of new coal plants and explore phase-out, a series of technical roundtables during 2018 and 2019 led to a commitment to close all existing plants.

Chile’s 2020 NDC update introduced a “social pillar” in which the government committed to prepare a strategy to address the social and economic consequences of this transition. The Just Transition Strategy in the Energy Sector was therefore developed between 2020 and 2021. It was produced through online workshops, working groups, interministerial roundtables, and public consultations. It prioritizes the needs of workers, employers, and local communities in territories affected by coal plant closures.

The Strategy provides a framework for the development of local plans. However, Chile’s policy framework for just transition subsequently extended beyond the energy sector – in recognition of the multi-sectoral implications of shifting the economic model away from extractive industries and at the same time addressing environmental and climate vulnerability. A new, dedicated office in the Ministry of Environment took over responsibility for developing local plans. However, the energy sector strategy remained the guiding framework for the Ministry of Energy’s activities in this area, and a critical catalyst in Chile’s journey with policy for a just transition.

Key insights
Operationalising just transition principles through place-based planning and supportive national policy

The Strategy's principles emphasise early and continuous dialogue, human rights and inclusion, transparency, and collaboration.

In its approach, the Strategy has three particularly notable features.

  • Firstly, it is territorially specific: tailored and inclusive action plans are to be developed for each local area with a concentration of coal plants. They include actions to address risks for workers, consumers, and companies. For example: labour market plans with reintegration, retraining, and monitoring; and regulatory or technical measures in the energy market to prevent spikes in electricity tariffs from coal plant closures (since under existing national laws districts with high generation receive a discount on tariffs).
  • Secondly, it aims to repurpose existing infrastructure and rehabilitate sites. Coal plants are intended to become green hydrogen or desalination hubs rather than being abandoned – using measures like identifying and addressing regulatory barriers that prevent these uses. Local economic activity would be promoted using various levers including finance and innovation, and urban spaces are to be regenerated.
  • Thirdly, it broadened social dialogue and stakeholder engagement on coal phase out – including, alongside employers (electricity generating companies), workers and unions, civil society groups, and local communities in affected areas – in an ongoing process to shape implementation.
Expected Outcomes
The Strategy identifies aggregate outcome metrics for a managed, nation-wide transition away from coal
Implementation
Even a sectoral strategy raises economic and social interdependencies – requiring communication interfaces, smooth coordination, and inclusive participation
  • The Strategy’s 32 actions, across four axes, are each identified as short-term (1 year), medium-term (2-5 years), or long-term (until 2040).
  • Each is flagged to a responsible part of the national government and other required collaborators – including public and non-state actors.
  • The Strategy encompasses almost 50 interest groups overall.

At the national level: the energy Strategy was later absorbed into the broader transition policy framework in Chile. In 2025, the Government published the National Strategy for Just Socio-Ecological Transition – which, in turn, complemented the social pillar of Chile’s 2025 updated NDC.

The Ministry for Energy sits on the Interministerial Committee for Just Socio-Ecological Transition, established to govern the new approach. It also contributes to sectoral policies. Further detail on multi-level measures to manage the phase-out of coal power, the phase-in of renewable power, and the associated impacts and dynamics of each, were also set out by the Government in the Decarbonization Plan.

At the local level: In 2021, port workers and trade union members in the district of Tocopilla brought a case which reached the Supreme Court, claiming that the Strategy did not sufficiently consider relevant impacts on jobs and local communities implied by a phase-out of coal and did not involve all affected groups in the development process.

Tocopilla did not have an existing governance structure for environmental and social development. Therefore, the opportunity was taken to develop a plan under the remit of the Ministry of Energy to serve as a model for local plans aligned with the Just Socio-Ecological Transition agenda.

Other affected local areas have implemented this multi-sector agenda by building on governance arrangements and structures that were in place before the Strategy for Energy. In 2017 and 2018, the Ministry of Environment had supported Plans for Social and Economic Recovery (PRAS) in three such areas (Huasco, Coronel, and Quintero – Puchuncaví), aiming to address overlapping challenges from adverse climate change impacts, resource exploitation, and pollution. These areas also have Councils for Social and Economic Recovery (CRAS), which convene a wide variety of stakeholders to agree and develop local measures.

2018 - 2025: from private sector phase-out to local planning
Jun 2018 - Jan 2019
Technical roundtables | Actors: Representatives from energy companies and public institutions | A specialised commission was set up to develop recommended actions for the government and evaluate various exit strategies. The Chilean coal commission included 25 representatives from companies and institutions and met nine times. After its conclusion, total phase-out of coal was announced.
Oct 2020 - Nov 2020
Workshops | Actors: Unions, civil society organizations, and members of the public | Two workshops with trade union representatives from the coal industry; two workshops with representatives from civil society organizations in the affected areas; and three open, public sessions.
Nov 2020 - Jan 2021
Working group | Actors: Representatives from several government ministries, private companies, trade unions, academia, and international observers | Six sessions were held, including on the context of decarbonization in Chile, green jobs, and the ILO Guidelines on Just Transition.
Aug 2021 - Sep 2021
Public consultation | Actors: Over 160 comments were received from 12 institutions: coal-fired thermoelectric companies, guilds, workers' unions, NGOs and consulting firms | All comments were integrated to refine and finalize the strategy.
Aug 2022 - Dec 2022
Tocopilla "citizens' diagnosis" | Actors: Representatives of the community in Tocopilla, unions, and the public and private sector | A "Thematic committee" was convened and held several working groups to develop the first version of the local plan.
Other stakeholders
Consultation with civil society and communities, including women and youth, have shaped plans closer to the ground

The principle of respect for human rights aims to facilitate the participation of special protection groups in the energy transition, such as Indigenous peoples, women, children, and adolescents.

The Strategy was reviewed by Chile’s National Working Group on Gender and Climate Change, which had previously developed 18 criteria in a "Gender and Climate Change Checklist" to align government policies. This analysis supported the final document to incorporate gender equity and equality and improve gender-responsiveness of several of the actions. For example, programmes and public procurement designed to support local suppliers could have gender-responsive criteria to encourage female-owned businesses.

For local plans, the design process and implementation has supported the participation of youth and teens. In Tocopilla, UNICEF Chile carried out workshops for young participants to express their concerns and ideas for the area’s transition, then to participate in the regional committee and take a role in implementation, monitoring and evaluation of the plan.