Energy: Changes in Form but Not in Background

The bill presented by the Executive Branch of Costa Rica to transform the state refinery Recope empowers the State to make alliances with private companies and "incursion into alternative chemical energy", but maintains the monopoly of fossil fuels.

Tuesday, April 9, 2019

On April 8, 2019, the Alvarado administration presented an initiative before the Legislative Assembly that seeks to transform the Costa Rican Oil Refinery (Recope) into the Costa Rican Company of Alternative Fuels and Energies (Ecoena). reviews that "... If the bill is approved, Ecoena would be able to make alliances with private sector companies or constitute companies, with the help of the public or private sector, to implement new business and attract investors."

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The article adds that "... This initiative aims to transform the institution into the Ecoena, so that through a reform to Law No. 6.588 the entity can investigate, produce, import and export, industrialize, store, market and transport alternative chemical energy. With a change to this legislation, the institution could overcome the legal restrictions that have prevented it from continuing with the research and development of alternative energies."

There are other initiatives in the legislation that would change the fuel market. One of these is the 20,641 "Fuels Law" bill that is being discussed in the Legislative Assembly, which seeks to advance the abolition of the use of fossil fuels in Costa Rica and declare the national territory free of exploration and exploitation of oil and natural gas. It seeks to extend RECOPE's scope of action to biofuels and other alternative chemical energies.

In this regard, industrialists have pointed out that their main concern is competitiveness, because if companies do not have internationally competitive inputs, their ability to produce and place products on the market is compromised.

"We are concerned about the insistence that RECOPE in the best CODESA style, can open new companies to produce and industrialize biofuels and other fuels, which today are not in the monopoly of RECOPE. We are not opposed to blends, but we do not see an interest in opening to competition from local producers to supply the biofuels they want to mix," explained Carlos Montenegro, deputy director of the Chamber of Industries of Costa Rica, in a statement from the guild.

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