Environment Sector in Costa Rica

Market overview

In 2012, Costa Rica was ranked 1st in the Americas and 5th in the world by the Environmental Performance Index (EPI) in policy efficacy of environmental performance (environmental public health and ecosystem vitality). Currently over 90% of all electricity produced in Costa Rica is generated by renewable sources (mostly hydroelectric) and 52% of the national territory is registered as protected forest.

The previous government’s (2006-2010) National Development Plan (NDP) established clear targets to reduce dependency upon imported fuels. It set a goal of 95% renewable power by 2015 and 100% by 2021. In order to generate this change, laws will be modified to allow more private investment in this area.

The main current NDP’s (2011-2014) focus is on the reduction of carbon emissions and climate change adaptation. As a result there are many opportunities in green technologies.

The majority of the country’s carbon footprint results from transport, agriculture and waste.

Before the current administration is over, the aim is to convert 80% of buses and 60% of taxis into vehicles that use cleaner energy (LPGs/biofuels). The coffee industry and many other agricultural sectors (such as sugar cane) are also looking to reduce emissions massively whilst maintaining a high quality product (recently a local company produced the first carbon neutral coffee, worldwide). Furthermore, since there is less and less landfill space, recycling, biomass etc. are becoming increasingly relevant.

A number of environmentally friendly products are subject to tax incentives, for example energy saving systems (such as solar panels) are tax exempt.

A regional norm (devised in Costa Rica) for sustainable building in the tropics has just been released. Whilst voluntary, it shows the country’s growing commitment to the environmental sector.

Key opportunities

Engine conversion technology for cars and buses (LPG and electric).

Shredders and Chippers.

Composters and small scale composters (individual homes).

LED technology.

Solar Panels/Photovoltaic Panels.

Self-generating energy source for public lighting.

Water butts.

Specialised lorries for normal waste and separated waste.

Waste treatment technology.

Getting into the market

Costa Rica boasts more than 100 years of democracy and has a strategic location and an excellent business climate. Costa Rican laws guarantee equal rights to foreign companies.

Businessmen will generally speak reasonable English, but if not they will let you know. They tend to avoid precise commitments, although they may make them vocally to avoid hurting another’s feelings. Appointing a local representative works well as an initial point of entry into market since they understand local bureaucracy and law.

The European Union and Central America have concluded negotiations for an association agreement which is hoped to be ratified in late 2012, which will bring new benefits, such as lower trade tariffs for European goods.

Bureaucracy is still a challenge, however the Ministry of Foreign Commerce (COMEX) and the Export Trade Promoter (PROCOMER) are currently working on improving procedures so that all steps can be carried out in the same office thus reducing costs and time.

Contacts

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