Böhl Gu ie ez, Mau icio; Vega A aújo, José; A ond, Elisa
Resea ch Repo
A s a egic phase-ou o Colombia's diesel subsidy o
suppo he ene gy ansi ion
IDOS Policy B ie , No. 20/2024
P o ided in Coope a ion wi h:
Ge man Ins i u e o De elopmen and Sus ainabili y (IDOS), Bonn
Sugges ed Ci a ion: Böhl Gu ie ez, Mau icio; Vega A aújo, José; A ond, Elisa (2024) : A s a egic
phase-ou o Colombia's diesel subsidy o suppo he ene gy ansi ion, IDOS Policy B ie , No.
20/2024, Ge man Ins i u e o De elopmen and Sus ainabili y (IDOS), Bonn,
h ps://doi.o g/10.23661/ipb20.2024. 2.0
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h ps://hdl.handle.ne /10419/299532
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A S a egic Phase-ou o Colombia’s
Diesel Subsidy o Suppo he
Ene gy T ansi ion
Mau icio Böhl Gu ie ez, José Vega A aújo &
Elisa A ond
Summa y
This policy b ie add esses he c i ical issue o phasing
ou diesel subsidies in Colombia and unde sco es he
u gen need o coo dina ed ac ion and s a egic
planning. The Colombian go e nmen iews he sub-
sidy phase-ou as pa o i s ene gy ansi ion s a egy,
p oposing in es men s in ca bon-neu al echnologies
as a eplacemen . Howe e , he anspo sec o – he
main consume o diesel – la gely conside s hese
plans inadequa e and is scep ical abou hei
easibili y.
Subsidies o diesel and gasoline, s emming om he
Fuel P ice S abilisa ion Fund (FEPC), bu den he
Colombian budge wi h a signi ican de ici and
h ea en Colombia’s iscal sus ainabili y. In 2022,
subsides ep esen ed 2.5 pe cen o he na ional
g oss domes ic p oduc (GDP). A ailed subsidy
phase-ou could unde mine he coun y’s ene gy
ansi ion e o s, po en ially leading o na ional s ikes
by he anspo sec o and e oding us in he
go e nmen ’s ans o ma ion plan.
The b ie examines he hu dles o he diesel subsidy
phase-ou p ocess, wi h a pa icula ocus on he
necessa y e o ms wi hin he anspo sec o ,
scep icism abou he go e nmen ’s ene gy ansi ion
plans and he po en ial nega i e e ec s o s a e-
owned en e p ise Ecope ol. D awing om hese
insigh s, he policy b ie dis ils policy ecommenda-
ions o he sho and medium e m. In he concluding
ema ks, i s esses ha a ailed subsidy phase-ou
could jeopa dise b oade ene gy ansi ion e o s.
Recommenda ions o he na ional go e nmen
(see p. 5 o mo e de ails):
Sho e m
1. Re-ini ia e s akeholde mee ings on he phase-ou
p omp ly, wi h he Minis y o T anspo aking he
lead and in ol ing addi ional key s akeholde s such
as clien s o he anspo sec o , he Minis ies o
Social P ospe i y, En i onmen , and Labou , as well
as he Na ional Planning Depa men .
2. Collabo a e wi h hese s akeholde s o de elop an
ac ion plan, inco po a ing suppo measu es o he
anspo sec o such as imp o ing ene gy e iciency
and coo dina ion be ween he anspo companies.
3. C ea e speci ic social p og ammes aimed a mi i-
ga ing socioeconomic e ec s, using he Gene al
Pa icipa ion Sys em (SGP) and s eng hening he
Sys em o he Iden i ica ion o Po en ial Bene i-
cia ies o Social P og ammes (Sisbén).
Medium e m
4. Re iew he objec i es and s a egies o na ional
planning documen s o accu a ely e lec he ci cum-
s ances o sel -employed ucke s. These should
conside ealloca ing unds om subsidies o supple-
men he exis ing Vehicle Flee Replacemen Fund
(Fondo de Reposición del Pa que Au omo o ).
5. Res uc u e he anspo sec o o enhance
esilience and p omo e in es men in sus ainabili y.
Fo ins ance, explo e he model o coope a i es in
he Colombian passenge anspo sec o , which
enables ucke s o main ain au onomy while mi i-
ga ing in es men isks.
6. Explo e s a egic pa ne ships be ween Colombian
and o eign p i a e-sec o en i ies wi h expe iences
inco po a ing sus ainable and esponsible p ac ices,
academia and esea ch ins i u ions, and de elop-
men agencies ha ha e an in e es in he
Colombian ene gy ansi ion p ocess o expedi e he
ansi ion o mo e sus ainable echnologies in he
anspo sec o .
IDOS POLICY BRIEF
20/2024
IDOS Policy B ie 20/2024
2
In oduc ion
The cu en Colombian go e nmen inhe i ed
se ious economic challenges ollowing he pan-
demic and global ene gy c isis. As pa o a
b oade e o o add ess economic challenges, i
inc eased gasoline p ices in he coun y o
imp o e i s iscal sus ainabili y and educe
eliance on go e nmen subsidies (Nei a, 2023).
I s ambi ion o align uel p ices wi h global ma ke s
by phasing ou subsidies p esen s an oppo uni y
o ans o m he anspo sec o while suppo ing
ulne able households om he socioeconomic
e ec s o he pas yea s. This policy b ie aims o
pinpoin he challenges associa ed wi h he
phase-ou o subsidies o diesel – a hea ily used
uel in he Colombian anspo sec o – and o e s
policy ecommenda ions o add ess ac o s’
in e es s and conce ns.
The In e na ional Mone a y Fund es ima es ha
global ossil uel subsidies o consume s cos
go e nmen s USD 1.3 illion in 2022, ep esen -
ing an inc ease o mo e han 400 pe cen
compa ed o 2015 (Black, Pa y, & Ve non, 2023).
F om a iscal pe spec i e, he use o ossil uel
subsidies is ex emely con o e sial, as hey
c ea e de ici s in go e nmen budge s, p ima ily
bene i high-income households ha consume
mo e uel, and disincen i ise in es men in cleane
and mo e sus ainable echnologies. In addi ion o
he ad e se iscal and social e ec s, subsidies
encou age he use o ossil uels and con ibu e o
g eenhouse gas emissions.
Insigh s o his b ie d aw om in e iews
conduc ed o a esea ch p ojec a he Ge man
Ins i u e o De elopmen and Sus ainabili y
be ween 12 Feb ua y and 24 Ma ch 2024 wi h 43
in ol ed and a ec ed s akeholde s om he
go e nmen , p i a e sec o and ci il socie y as
well as policy expe s.
The Fuel P ice S abilisa ion Fund
and i s de ici
The cu en Colombian go e nmen , led by
P esiden Gus a o Pe o, owed o ackle he
inc easing de ici o i s Fuel P ice S abilisa ion
Fund (FEPC). Es ablished in 2007, he FEPC
aims o p o ec Colombian socie y om uel p ice
ola ili y and co e s e ail p ice dispa i ies o
gasoline and diesel compa ed o he in e na ional
ma ke (Minis e io de Hacienda y C édi o Público,
2022). The und ea ns money when na ional
p ices exceed in e na ional p ices and spends
when hey all below, e ec i ely subsidising uel
consump ion du ing low-p ice pe iods.
Using an au oma ic p icing mechanism wi h p ice
bands, he Minis y o Mines and Ene gy and he
Minis y o Finance se mon hly uel p ices. The
sys em allows he go e nmen o a oid s eep ises
in uel p ices and suspend he au oma ic p ice
inc eases (see Box 1).
Box 1: Au oma ic uel p icing mechanisms
Au oma ic uel p icing mechanisms use a p icing
o mula o calcula e uel p ices o adjus hem
pe iodically o in e na ional ma ke p ices
. The
mechanism can include a p ice band o p o ec
socie y and i ms om p ice ola ili y on he
in e na ional ma ke . P ice bands use p ice caps
and loo s o keep he p ice om ising abo e a
ixed limi o mo e han a p e-
se pe cen age.
Many coun ies use independen ins i u ions o se
uel p ices so ha hey canno be poli icised, o
ins ance, du ing elec ion pe iods.
Figu e 1 shows he balance o he FEPC o he
pas 16 yea s. I highligh s he challenges ha
Colombia encoun e ed a e he pandemic and he
global ene gy c isis, leading o a de ici equi alen
o 2.5 pe cen o GDP in 2022. As in e na ional
ma ke p ices o pe oleum uels ose om 2021
onwa ds, he FEPC mi iga ed he e ec by limi ing
p ice inc eases o consume s.
These ci cums ances led o a subs an ial bu den
on he go e nmen budge and con ibu ed o he
signi ican de ici , as illus a ed in Figu e 1. Expe s
highligh ed ha he de ici cons i u ed an
eno mous h ea o Colombia’s deb sus ainabili y
and u ged he go e nmen o ac (Comi é
Au ónomo de la Regla Fiscal [CARF], 2022). The
FEPC accumula ed a o al de ici o COP
(Colombian pesos) 100.3 illion (ca. USD 26.2
billion), o which 73 pe cen s ems om he las
IDOS Policy B ie 20/2024
3
h ee yea s. Financial expe s wa ned ha in e -
na ional a ing agencies migh downg ade
Colombia due o he high deb le el.
To add ess pa o he de ici , he Pe o admin-
is a ion in es ed a lo o poli ical capi al o
implemen a subsidy phase-ou o gasoline ha
was ini ia ed in la e 2022, wi h gasoline p ices
eaching wo ld ma ke p ices a he s a o 2024
(CARF, 2022; P esidencia Colombia, 2023;
Rod íguez Rincón, 2023). The socioeconomic
e ec s o he gasoline subsidy phase-ou a e s ill
being deba ed. Some go e nmen o icials unde -
sco ed he eg essi i y o he subsidy, a guing ha
p ice inc eases would no se e ely a ec low-
income and ulne able households (Mo ales
Sole , 2022). O he s akeholde s, including
na ional and egional go e nmen o icials, em-
phasised ha e en ma ginal cos inc eases ha e
p o ound e ec s on low-income and ulne able
households (Casallas, 2023; Lope a, 2023).
In 2023, diesel subsidies became he g ea es
bu den o he go e nmen , accoun ing o 77 pe
cen o he COP 17.8 illion (USD 4.7 billion).
Amids he no able in la ion and s agna ing eco-
nomic g ow h, he go e nmen now inds i sel in a
challenging posi ion o ackle he uel subsidy
e o m o diesel (Sánchez, 2024).
Figu e 1: FEPC balance be ween 2008 and 2023* in illion COP and as a sha e o GDP
No e: F om 2008 o 2019, he FEPC balance luc ua ed be ween COP -2 o +0.4 illion, bu s a ing in 2020, i expe ienced
signi ican de ici s, d opping o COP -36.7 illion in 2022. As a sha e o GDP, he FEPC emained ela i ely s able un il 2019,
when i expe ienced a ma ked inc ease in he de ici om 2020 onwa ds, eaching -2.5 pe cen in 2023.
*The esul s o 2023 a e es ima es.
Sou ce: Minis y o Finance, using da a om he Minis y o Mines and Ene gy
Nego ia ions wi h he anspo
sec o : key o ad ancing diesel
subsidy phase-ou
The main consume o diesel is he anspo
sec o , including bo h ca go and passenge
ehicles. Due o he absence o al e na i es such
as ains o massi e inland wa e way anspo ,
diesel-powe ed ehicles mo e 96 pe cen o goods
in Colombia (He nández & Can illo-Cle es, 2024).
Thus, he sec o also ep esen s a c ucial challenge
o he Colombian ene gy ansi ion p ocess (De-
pa amen o Nacional de Planeación [DNP], 2023).
Cen al o he cu en discussions be ween he
go e nmen and he anspo sec o is he
ques ion o who should de e mine he alloca ion o
he unds co e ing he diesel p ice dispa i ies. Fo
he go e nmen , he subsidies h ea en he iscal
sus ainabili y o he coun y, while edi ec ing he
unds om subsidies o e s po en ial esou ces o
IDOS Policy B ie 20/2024
4
he Colombian ene gy ansi ion p ocess. Fo
example, unds cu en ly co e ing diesel sub-
sidies could be eo ien ed as in es men s o
suppo he anspo sec o in adap ing o he
ene gy ansi ion.
T anspo sec o ep esen a i es a gue ha he
go e nmen lacks a clea implemen a ion s a egy
o i s anspo ene gy ansi ion plans and in a-
s uc u e in es men s. They iew he ene gy
ansi ion plans as an inadequa e eplacemen o
diesel subsidies and wa n ha highe diesel p ices
could cause in la ion, impac ing essen ial goods
such as ood (Bancolombia, 2023; Fe nández,
2024). Fo hem, he diesel subsidy should s ay in
place, wi h mino changes.
Colombia’s dependency on oad anspo gi es
he sec o ex ao dina y ba gaining powe and he
abili y o esis policy implemen a ion h ough
s ikes, as pas expe iences ha e demons a ed.
In 2016, ucke s’ p o es s calling o imp o ed
labou condi ions led o ood sho ages in some
egions o Colombia (San iago, Edga do, Ósca , &
And és, 2018). Thus, inding an accep able
pa hway o he phase-ou o he diesel subsidy is
c ucial o any policy ini ia i e in his di ec ion o be
success ul.
The Minis ies o Finance, Mines and Ene gy, and
T anspo ha e had se e al echnical mee ings
wi h he anspo sec o associa ion, UNIDOS,
which ep esen s be ween 85 pe cen and 90 pe
cen o wo ke s in he sec o . The aim is o ind an
e ec i e way o g adually educe diesel subsidies
while implemen ing o he measu es o add ess
he main conce ns o he sec o in ela ion o
subsidies and o he issues.
On 13 Ap il 2024, he Minis y o Finance
announced ha diesel p ices would inc ease
g adually in he o eseeable u u e. Howe e , by
his da e, he go e nmen had no ye eached an
ag eemen wi h UNIDOS ega ding diesel p ices
and o he conce ns aised by he anspo sec o
du ing he echnical mee ings (Cá denas, 2024).
Th ee in e connec ed challenges, which a e
discussed in de ail below, a e complica ing he
discussions be ween he go e nmen and he
anspo sec o .
S uc u al challenges in he eigh
anspo sub-sec o
The Colombian eigh anspo sub-sec o
su e s om a challenging economic si ua ion as
well as an o e supply o ucke s, acco ding o
sec o ep esen a i es and o he expe s. This
p oblem is pa ially a esul o he sub-sec o ’s
s uc u es and modes o ope a ion, which ha e led
o an in es men gap o e ime.
The sub-sec o has h ee main ac o g oups:
clien s ha commission he anspo o goods,
licensed anspo companies ha ecei e
assignmen s and (la gely) sel -employed ucke s
who mo e he goods. Many ucks in Colombia
a e p i a ely owned, and many amilies depend on
he income ha he uck d i e s gene a e
(Gi oze o, 2021). The sha e o sel -employed
people in he anspo sec o was 63 pe cen
acco ding o da a om he O ganisa ion o
Economic Co-ope a ion and De elopmen (Fe ia,
2021). Licensed anspo companies own e y
ew ehicles hemsel es and ely on he sel -
employed, who o e hei se ices on a demand
basis (Gi oze o, 2021).
This s uc u e inc eases dependency on he diesel
subsidy o dec ease cos s, and i c ea es se e e
ine iciencies, such as ucke s ha ing di icul ies
in inding wo k and inadequa e in es men s in he
main enance, upkeep and enewal o ucks. Due
o he p edominan deg ee o sel -employmen
among ucke s, hey con inually need o ind new
assignmen s, which p o es o be e y ha d due o
he o e supply. As a esul , uck owne s a ely
in es in new ehicles, which has led o an
in es men gap and he a e age age o a uck
being 26 yea s (Ospina Henao, 2024).
Scep icism abou he Na ional
De elopmen Plan’s isions o he
anspo sec o
The Na ional De elopmen Plan highligh s he
anspo sec o as key o he coun y’s ene gy
IDOS Policy B ie 20/2024
5
ansi ion p ocess (DNP, 2023). The plan includes
po en ial solu ions o he in es men gap such as
measu es o imp o e ene gy e iciency and
deca bonisa ion, which could suppo he subsidy
phase-ou . The go e nmen aims o assis wi h he
ansi ion o elec ic and hyd ogen-powe ed
ehicles by o e ing ax exemp ions and low-
in e es loans as well as a und o echnological
ad ancemen in he anspo sec o . These ideas
ha e been ein o ced by he Jus Ene gy
T ansi ion Roadmap documen s, which include a
se o s a egies o he anspo sec o (Minis e io
de Minas y Ene gía, 2023).
Sec o ep esen a i es pe cei e he le el o
go e nmen incen i es and suppo as inadequa e
o compensa e o he loss o he diesel subsidy.
They aise wo main conce ns abou he
go e nmen ’s plan o close he in es men gap.
Fi s , he eliance on expensi e echnology wi h
limi ed cu en a ailabili y and accessibili y in
Colombian ma ke s makes he s a egy seem
un easible. Second, his o ical scep icism due o
inadequa e le els o suppo and un ul illed
p omises heigh ens hei conce ns. They see he
diesel subsidy as one o he ew angible bene i s
p o ided by he go e nmen .
Ac o s om he p i a e sec o and academia ha e
ei e a ed he sec o ’s scep icism and ques ion he
go e nmen ’s abili y o implemen he isions o
he Na ional De elopmen Plan and o he
planning documen s. High le els o u no e in key
minis ies and p oblems implemen ing o he
e o ms ha e only s eng hened his iew,
p o oking ie ce public deba e. As o Ap il 2024,
nea ly wo yea s in o he cu en adminis a ion,
p og ess on de eloping new policies and ac ion-
able commi men s has been limi ed, including he
necessa y coo dina ion ac oss and be ween
minis ies and le els o go e nmen .
Ecope ol’s ole in p o iding uel
subsidies
The phase-ou o uel subsidies is closely linked o
he ene gy ansi ion p ocess, as highligh ed in he
Na ional De elopmen Plan (DNP, 2023). A key
playe in he ene gy ansi ion is s a e-owned
en e p ise Ecope ol, which has he ambi ion o
become ca bon neu al by 2050 and has in es ed
in he di e si ica ion o i s po olio o se e al
yea s, hough i s co e business emains hea ily
based in ossil uels (S ambo & A ond, 2023).
Howe e , he su ge in he FEPC’s de ici since
2021 poses signi ican challenges o Ecope ol,
which empo a ily has co e ed he cos s o
de la ed gasoline and diesel p ices, la e se led by
he go e nmen annually.
The go e nmen has a s ong mo i a ion o phase
ou he uel subsidies o p o ec i s deb sus ain-
abili y and o suppo Ecope ol as a key ally in he
ene gy ansi ion p ocess. Changing he p icing
o mula o ocus only on p oduc ion cos s o
diesel, as sugges ed by UNIDOS, would o ce
Ecope ol o assume he loss ha he subsidy
cu en ly c ea es. This is because se ing diesel
p ices below global ma ke le els wi h he new
o mula would equi e Ecope ol o sell uel a a
educed a e, he eby causing he company o
incu subs an ial losses ha he go e nmen
p e iously co e ed.
Recommenda ions o phase ou
he diesel subsidy
Al hough i is key o educing deb and making
p og ess owa ds he ene gy ansi ion, he phase-
ou o he diesel subsidy pu s he go e nmen in a
challenging and isky posi ion. On he one hand, i
he anspo sec o decides ha he only op ion o
ha e hei needs hea d is s ike ac ion, he coun y
could ace ood sho ages, p o es s and social
un es , as has happened in he pas wi h a emp s
o egula e he sec o (Ahumada Rojas, 2021;
San iago e al., 2018). On he o he hand, a pass-
h ough o he p ice inc ease wi hou mi iga ion
measu es could uel in la ion and bu den la ge
segmen s o he popula ion, also leading o social
un es .
A success ul phase-ou o he diesel subsidy is
needed o s eng hen con idence in he b oade
ene gy ansi ion p ocess and demons a e he
go e nmen ’s abili ies o s ee a complex e o m
IDOS Policy B ie 20/2024
6
p ocess. To mi iga e he nega i e e ec s o he
phase-ou , he go e nmen u gen ly needs o ac
by c ea ing mo e space o dialogue and deba es
ha add ess he needs o he a ec ed sec o s;
mi iga ing he ad e se e ec s on ulne able
households; and a oiding nega i e impac s on i s
ene gy ansi ion agenda. To s ee he subsidy
phase-ou , he na ional go e nmen should
conside he ollowing ecommenda ions.
Sho - e m ac ions o phase ou he
diesel subsidy
Resume echnical mee ings: The go e nmen
should immedia ely esume hos ing bi-weekly
mee ings o discuss he p ice e o m un il he end
o i s legisla ion pe iod.
• To be e add ess he anspo sec o ’s needs,
he Minis y o T anspo should ake he lead
and ecei e mo e au onomy o nego ia ions
om he Minis y o Finance.
• The mee ings should in ol e o he ac o s om
he go e nmen and p i a e sec o , including
clien s o he anspo sec o and he Minis ies
o Social P ospe i y, En i onmen , and Labou ,
as well as he Na ional Planning Depa men .
Es ablish an ac ion plan: The go e nmen and
key s akeholde s should co-de elop an ac ion
plan o phase ou he diesel subsidy. The ac ion
plan needs o add ess he ollowing key p io i ies:
• Immedia e suppo o he anspo sec o in
hei p io i y a eas: Toge he wi h he p i a e
sec o , he go e nmen should iden i y
oppo uni ies o sho - e m cos educ ions o
inc ease he anspo sec o ’s us in
go e nmen ac ions and p o ec i s p o i abili y
in he sho e m. Fo ins ance, ainings o
educe uel usage and imp o e coo dina ion
be ween he anspo companies and hei
clien s h ough apps o o he pla o ms could
help ucke s in he sho e m.
• Social p og ammes o mi iga e socioeconomic
e ec s: Go e nmen agencies such as he
Minis y o Heal h and Social P ospe i y as well
as he Na ional Planning Depa men should
sugges mi iga ion measu es ha he subsidy
phase-ou could und.
o The go e nmen could in es in he Gene al
Pa icipa ion Sys em (Sis ema Gene al de
Pa icipaciones, SGP), which p o ides
unds o social expendi u es such as edu-
ca ion and heal h (Minis e io de Vi ienda,
Ciudad y Te i o io, 2021). O he coun ies
ha e success ully implemen ed cash
ans e s ha suppo ed households wi h
he p ice inc eases (Mukhe jee e al., 2023).
o The Iden i ica ion o Po en ial Bene icia ies
o Social P og ammes da abase (Sis ema
de Iden i icación de Po enciales Bene-
icia ios de P og amas Sociales, Sisbén)
could bene i om he cash- ans e
app oach i po en ial bene icia ies egis e
hemsel es and he da abase is expanded.
o Pa ies should also assess he socio-
economic p essu es o he gasoline subsidy
phase-ou and o he p ice inc eases om
he pas o ge a comp ehensi e o e iew o
he cu en ulne abili ies in socie y.
• Pace o he p ice inc ease: The go e nmen
mus p uden ly manage he pace o p ice
inc eases and o he ansi ion elemen s o
s a egically coo dina e adjus men s wi h
o he policies and egula ions, such as
in as uc u e de elopmen , he in oduc ion o
new echnologies and wo k o ce aining.
o Assessing ma ke dynamics and socie al
p e e ences is impe a i e o ensu e ha he
socie y and economy can adjus o changes
(Ren schle & Bazilian, 2017).
o A s uc u ed imeline would help all s ake-
holde s as well as he public o p epa e o
he changes.
o The imeline should include indica o s ha
guide he p ice inc eases o e ime o
p o ec wo ke s in he anspo sec o and
ulne able households. Only when he
indica o s allow o a p ice inc ease should
he go e nmen aise diesel p ices.
IDOS Policy B ie 20/2024
7
Ac ions o be aken wi hin he emaining
legisla ion pe iod
Re ise he goals and s a egies o na ional
planning documen s: Policy-make s mus
acknowledge ha he diesel subsidy phase-ou
equi es a b oade e o m in he anspo sec o
han has been p oposed so a . To e lec he
eali ies o sel -employed ucke s, he go e n-
men needs o ede ine measu es o close he
exis ing in es men gap, enabling he sec o o
pa icipa e in ene gy ansi ion plans. The Jus
Ene gy T ansi ion Roadmap, expec ed du ing
2024, p o ides an oppo uni y o ou line his
e o m.
• The go e nmen should pa ially edi ec unds
om he diesel subsidy o he exis ing Vehicle
Flee Replacemen Fund, while he e ms and
condi ions o his und should be pushed o
help acili a e a ansi ion o inco po a e elec ic
ehicles and a cleane , mo e sus ainable lee
gene ally.
• In he sho e m, analyse he e idence on he
ade-o s be ween p io i ising eadily a ailable
echnologies, such as mo e e icien diesel
mo o s ha educe uel usage, e sus pushing
o less accessible bu cleane (e.g. elec ic
ehicle) echnologies.
• In he long un, he go e nmen and anspo
sec o should join ly explo e new echnologies
such as elec ic ehicles o hyd ogen powe
and de ine a s a egy o se up a powe
in as uc u e.
• E idence on he co-bene i s (heal h and
clima e impac s) o a diesel phase-ou and
imp o emen s in he ene gy e iciency o he
anspo lee should be pa o public
communica ions a ound hese changes.
Res uc u e he anspo sec o : The anspo
sec o equi es e o m o add ess he s uc u al
challenges ha exace ba e i s dependency on low
diesel p ices. The agmen a ion and lack o
economies o scale due o he small size o he
a e age en e p ise in he sec o pose challenges
o i s po en ial o e o m and de elopmen .
• The passenge anspo sec o has had
success ul expe iences o ganising i sel in o
coope a i es in he pas , e ec i ely add essing
challenges ha his sec o has aced (see
Box 2).
• Coope a i es could be an oppo uni y o e-
s uc u e he eigh sub-sec o , p o ec ing he
independence o he sel -employed and
encou aging g ea e o malisa ion. The
go e nmen should o e clea incen i es o
coope a i es ha acili a e a cleane lee , such
as ax bene i s and social secu i y schemes.
Box 2: Coope a i es in Colombia
Coope a i es a e employee-owned businesses in
which all membe s equally bene i om p o i s and
sha e in es men isks. In many cases, hey con-
ibu e o communi y de elopmen and a e
cha ac e ised by he
i democ a ic s uc u es,
which p o ide all membe s wi h a o e in business
decisions. Howe e , indi idual coope a i es may
a y in hei p ac ices and p io i ies based on hei
speci ic goals and ci cums ances. Se e al co-
ope a i es ha e been ope a ing in he Colombian
passenge anspo sub-sec o o many yea s.
Coope a i es helped o se le he “penny wa ”,
e e ing o he ie ce compe i ion be ween bus
d i e s o passenge s ha o en led o ha m ul
i al ies (Shaw & Alld ed, 2015).
Engage wi h de elopmen and indus y
ac o s: Se e al de elopmen and indus y ac o s
a e collabo a ing wi h he Colombian go e nmen
on he ene gy ansi ion, especially o explo e he
coun y’s po en ial o p oduce cleane o ms o
ene gy. These ac o s should ake he subsidy
phase-ou se iously, as s ikes by he anspo
sec o could a ec hei in es men and
de elopmen plans in Colombia.
• To accele a e he ansi ion owa ds cleane
ene gy and echnologies in he anspo
sec o , he go e nmen should discuss wi h
hese ac o s he need o de elop – and sub-
sequen ly manu ac u e – sus ainable anspo
echnologies domes ically in Colombia,
building on exis ing capabili ies in he p o-
IDOS Policy B ie 20/2024
8
ducing indus ies. Fo ins ance, U uguay has a
pilo p ojec o es hyd ogen ucks in he
o es y sec o , which could se e as a use
case o Colombia (H2LAC, 2023). In addi ion,
he en isioned s a egic pa ne ship o g een
hyd ogen be ween B azil and Colombia could
os e mo e oppo uni ies o economic de el-
opmen (Mejía, 2024).
• The go e nmen could pu sue s a egic
pa ne ships be ween in e na ional p i a e
companies and he Colombian p i a e sec o o
iden i y whe e hey migh p o ide mu ual
bene i s. Fo ins ance, as indus ialised
coun ies seek o g een hei hea y indus y
wi h low-emission hyd ogen, wha oppo uni-
ies exis o Colombia o de elop a hyd ogen
indus y, no only o expo , bu also o suppo
(Aldana Ri e a & León Peñuela, 2022, p. 122)
and ans o m he Colombian anspo sec o ,
while ensu ing local bene i s and minimising
nega i e impac s (Minis e io de Minas y
Ene gía, 2022)?
• Es ablishing a hyd ogen indus y in Colombia
aces i s own challenges due o limi ed egu-
la o y de elopmen , po en ial dependency on
g ey and b own hyd ogen, isks a ound in a-
s uc u e de elopmen , ag eemen s wi h
a ec ed communi ies and o he p oblems.
Conclusions
The Colombian go e nmen and Cong ess should
p io i ise he subsidy phase-ou in hei emaining
legisla i e pe iod. The phase-ou o e s he
oppo uni y o ele a e he ene gy ansi ion
p ocess om a empo a y go e nmen policy o a
S a e policy ha is ecognised by a b oad coali ion
o poli ical pa ies and socie al ac o s. Howe e , i
he phase-ou ails, he coun y could ace s ikes
and p o es s, which would ad e sely a ec he
us in – and suppo o – he go e nmen ’s
ene gy ansi ion plans.
Bo h in e na ional and domes ic indus y as well
as in e na ional de elopmen coope a ion ac o s
wi h s akes in he Colombian ene gy ansi ion
should engage wi h he uel subsidy phase-ou , as
i could a ec hei e o s in he ene gy ansi ion
p ocess. Thei suppo could accele a e he
subsidy phase-ou and inc ease con idence in he
go e nmen ’s capabili ies. Fo example, he
Ge man go e nmen hos s in e -minis e ial
consul a ions, and he subsidy phase-ou p ocess
should become a co e opic o he exchange.
Ge many has had i s own nega i e expe iences
wi h a subsidy phase-ou , and he wo coun ies
could lea n om each o he (Ma inez, 2024).
A he momen , he go e nmen is losing poli ical
capi al, as he phase-ou o he uel subsidies is
a ec ing he us o key s akeholde s conce ning
he adminis a ion’s capaci y o implemen
complex e o ms. The cu en cou se o he
go e nmen o phase ou he subsidy wi hou
ha ing a inal ag eemen wi h he anspo sec o
ein o ces he sec o ’s suspicions ha he nego-
ia ions lack since i y. O he sec o s a e closely
wa ching he nego ia ions be ween he go e n-
men and he anspo sec o . The esul s could
a ec u u e nego ia ions be ween hese sec o s
and he go e nmen on hei con ibu ion owa ds
he ene gy ansi ion. On he o he hand, a
success ul phase-ou could boos he go e n-
men ’s poli ical capi al and socie y’s us in i s
abili y o implemen he ene gy ansi ion. Time is
o he essence, and con idence could de e io a e
i nego ia ions con inue o s all.
