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By Guy Edwards, a PhD candidate in International Relations at the University of Sussex

Around this time at the World Economic Forum in Davos in 2023, Irene Vélez, Colombia’s Minister for Mining and Energy at the time, announced that the country had “decided not to award new oil and gas exploration contracts”.

This radical commitment by a country heavily dependent on fossil fuel exports was initially made by President Gustavo Petro. During the presidential campaign in 2022, he pledged to end the granting of new licenses for oil and gas exploration and not to proceed with two pilot fracking projects and the exploitation of unconventional deposits.

The Petro administration’s National Development Plan (NDP) 2022-2026 outlines its plan to advance a just energy transition, including working to accelerate the roll out of renewable energy and zero- and low-emission vehicles. The NDP says Colombia’s dependency on fossil fuels undermines competitiveness and increases vulnerability, and this requires major changes to production and consumption. The government has also pushed to continue fossil fuel exploration and production and considers fossil gas a ‘transition fuel’. The NDP states that financial resources from coal and oil exports, which are the main source of foreign currency, will be used to drive the energy transition. This reflects the importance of the energy and mining sector, which accounts for around 7 percent of GDP, 56 percent of exports, 33 percent of foreign investment and over half a million formal jobs.

Since the Petro government took office, the license pledge had been repeated various times. In early October 2022, the Vice-Minister for Mining and Energy at the time, Belizza Ruiz, said that “there will be no new hydrocarbon exploration and exploitation contracts” but that “everything that was already signed and being carried out will continue”. Days later, Minister Irene Vélez reaffirmed the licensing pledge and said that they did not want to sign new licenses without having established what the situation was with existing ones to avoid putting further pressure on the extractive frontier given the climate and ecological crises. On October 20, Minister Vélez reiterated that the Petro government would respect the more than 330 current hydrocarbon exploration and exploitation contracts and the just energy transition would not put the country’s energy sovereignty at risk.  

During her remarks in Davos in January 2023, Minister Vélez argued that  as the global energy transition progresses and countries take steps to decarbonise, the “hydrocarbons economy will be devalued”. The World Bank also says that as Colombia’s key trading partners such as the United States decarbonise their economies, Colombia will likely face a sharp decline in demand for its oil starting in 2030. In this context of declining demand, new fossil fuel investments would likely be concentrated globally in low-cost fields. For high-cost producers like Colombia, this would mean greater vulnerability. As a result, Colombia needs to shift away from its reliance on fossil fuel exports, which requires the development of new productive sectors to eventually replace them.

Following Minister Vélez’s comments, President Petro told journalists that they are trying to shift Colombia’s exports away from fossil fuels. He said that “we are convinced that a big investment in tourism…and the capacity and potential that the country has to generate clean energy, could perfectly, in the short term, fill the void left by the fossil fuel economy”. At a Davos press conference, President Petro detailed his thinking behind the license pledge by stating that the form of capitalism developed in the last 30 years is not capable of stopping the climate crisis and that a decarbonized from of capitalism can no longer protect the fossil economy, hence fossil capital must enter a serious and definitive stage of devaluation. 

Is the licensing pledge aligned with climate science and the agenda on fossil fuel phaseout?

The Petro government’s rhetoric and the license pledge reflect the growing consensus on the need to phase out fossil fuels. To comply with the carbon budget for a 50:50 chance of not exceeding the 1.5°C limit (which was crossed in 2024), the world needs to substantially curtail the burning of existing fossil fuels and leave most unextracted reserves underground.

A just energy transition will require the wealthiest group of fossil fuel producing nations, with the highest capacity to act, to completely phase out all oil and gas production by 2034, and for middle-income countries, including Colombia, to achieve zero-production by 2043. Despite having longer to phase out fossil fuel production, these middle-income countries are likely to be hit by the loss of revenue and related social and economic instability especially in producing areas.

The World Bank says Colombia faces three interlinked and urgent transitions. Due to its vulnerability to climate impacts, it needs to transition to a more climate‑resilient economy. Second, it needs to transition to a net zero emissions economy by 2050. Third, as global demand for its oil and coal exports are set to decrease while demand rises for green products, it will need to transform and diversify its economy.

To support this domestic agenda, attract international support and accelerate global efforts to shift away from fossil fuels, the Petro government joined the Powering Past Coal Alliance, the Beyond Oil and Gas Alliance and the group of countries seeking to negotiate a Fossil Fuel Non-Proliferation Treaty in 2023. At COP28, Colombia also played an active role at COP28 in Dubai on calling for strong language on the phasing out of fossil fuels.

Pushback at home against the license pledge

There has been infighting against the license pledge from within Petro’s own cabinet centred on the importance of oil exports for Colombia’s macroeconomic stability. Moreover, Petro’s assertions that big investments in tourism and renewable energy could plug the gap from reduced fossil fuel exports in the short term appeared overly optimistic.

Following the comments by Vice-Minister Belizza Ruiz in October 2022, José Antonio Ocampo, the Minister of Finance at the time said “that decision, forgive me for telling the vice minister, has not been made”. Then in an interview in November 2022 with the Financial Times, Minister Ocampo said that the government would analyse existing contracts before deciding whether to fulfil the pledge to end new oil and gas licences.

Others have been far blunter. Critics have pointed to gaps in the plans and used friendly media ties to attempt to discredit, destabilise and misrepresent what the Petro government is doing. In January 2023, Senator María Fernanda Cabal, from Colombia’s right-wing Democratic Centre Party said in response that “[the government] never tires of promoting the destruction of the mining and energy sector and the country's economy”. Meanwhile, the former Colombian president, Iván Duque, characterised the decision as “economic and social suicide”.

Tellingly, many of these criticisms do not engage with the Petro government’s reasoning that a gradual shift away from a reliance on fossil fuel exports is required due to the global energy transition. A report by WTW and the Universidad de Los Andes argues that the risks posed by Colombia’s exposure to the global energy transition means that a slow transition could endanger the country’s economy. It argues that if Colombian policymakers are not proactive in their response to these risks, the country could face lost economic output of more than USD 88 billion (or 27% of 2019 GDP) between now and 2050.

The Petro government response and further policy development

To attempt to clarify its plans, the Petro government announced further elements of its Just Energy Transition strategy in March 2023. It outlines five areas including increased investments in clean energy; the progressive substitution of the demand for fossil fuels; greater energy efficiency; review and eventual relaxation of regulations to accelerate the generation of clean energy; and the reindustrialization of the economy. It also describes various instruments including the diversification of  exports  away from fossil fuels towards agribusiness and manufactured products; positioning Colombia as a top tourist destination; gradually eliminating fossil fuel subsidies; continuing oil and gas exploration; and promoting the exploration, production and industrialization of copper, cobalt and lithium.

To attract investments to support this agenda, in October 2024, the government announced the Portfolio for Socioecological Transition. The Portfolio aims to attract investments of USD 40 billion to finance projects in nature tourism, sustainable agriculture, renewable energy, low carbon reindustrialisation, the conservation and restoration of ecosystems and adaptation to climate change. It is described as a comprehensive roadmap designed to guide the country's structural transformation in line with Colombia’s national climate plans and the National Development Plan.

Under the Petro’s government’s just energy transition agenda, however, no new licenses for oil and gas have been awarded as of January 2025. Justifying this policy, Colombia’s current Mining and Energy Minister, Andrés Camacho, said “more contracts do not guarantee more reserves, nor do they guarantee fewer reserves”. To spur production, Minister Camacho stated that the Petro government is looking to revitalize older contracts signed over a decade ago and which have seen minimal exploration efforts to date. Colombia’s National Hydrocarbons Agency has also implemented requirements for contract compliance to prevent companies from signing contracts only to resell them at higher prices without carrying out exploration. Meanwhile, Ecopetrol has contributed to the output increase through enhanced oil recovery techniques. Lastly, new investments in the country’s existing oil and gas contracts continue to be allowed.

This approach is being vindicated. In May 2024, the previous Minister of Finance, Ricardo Bonilla, announced that the government was aiming to increase oil production to one million barrels per day compared to an average of 777,200 barrels per day in 2023, which was higher than both 2021 and 2022.  And in December 2024, Brazil’s national oil company, Petrobras, which is partnering with Colombia’s Ecopetrol, confirmed the "largest gas discovery in Colombia's history" off the country’s coast.  

Will the license pledge endure and was it worthwhile?  

With no law, decree or specific policy backing it, the pledge will likely be abandoned by the next government in 2026. As Ana Carolina González Espinosa from the Natural Resource Governance Institute says, the Petro government’s licensing pledge will likely only be a “de facto moratorium on fossil fuel licensing for four years”. A future government, especially from the right with backing from industry, would likely pursue the signing of new oil and gas licenses and seek approval for the continuation of pilot fracking projects given the promise of quickly ramping up production.

A confluence of factors has made this more likely. A ferocious El Niño and subsequent drought over the last couple of years undermined the country’s hydroelectric power installations leading to fossil fuel-powered stations having to ride to the rescue to avoid power cuts. Then a report from Colombia’s National Hydrocarbons Agency in May 2024 said the country has only around 7 years of petroleum reserves and 6 years of gas reserves left leading to renewed calls for new licenses and fracking.

The infighting between Petro’s ministers, various resignations, alleged scandals, implementation challenges and the absence of a robust communications strategy have also undermined the government’s credibility. Lastly, while Colombia has launched its Just Energy Transition Roadmap in October 2024, is making progress on increasing the penetration of renewable energy projects and securing new investments from Enel and others, a clear plan to transition the economy gradually away from fossil fuel exports is still pending.

Given the economy’s dependence on fossil fuels and the demands for public spending to support other priorities including the peace process, land reform, food security and reducing deforestation, it is little surprise that the government is aiming to boost oil and gas production. 

One possible benefit of the license pledge, albeit limited, has been increased global attention for the Petro government. Yet this is arguably a double-edged sword. President Petro’s fiery speeches may have resonated with NGOs and climate scientists calling for a rapid and fair fossil-fuel phaseout. Yet this focus on the global climate crisis went down poorly with his domestic base, which fears the transition could cost jobs and investment and reduce state support for other priorities. Moreover, the Petro government likely underestimated how fierce the opposition from fossil fuel incumbents would be in the media, which has worked diligently to try to discredit, destabilise and misrepresent the Petro government.

To avoid climate breakdown, countries need to phase out fossil fuels in an equitable and sequenced fashion with rich countries moving first and ramping up support to others. The Petro government’s license pledge is a bold and necessary step. Yet implementation challenges, political missteps and Colombia’s economic reliance on fossil fuel exports, demonstrate the extent of carbon lock-in and the power of fossil fuel actors to protect their interests and obstruct a just energy transition.

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Guy Edwards is a PhD candidate in International Relations at the University of Sussex focusing on the politics of energy transitions in Colombia. He is also a scholar at the Climate Social Science Network and co-founder of the Latin America and the Caribbean Research Network at Sussex. You can find his Sussex profile here and can follow him on BlueSky at guywhedwards.

Further information: https://www.sussex.ac.uk/research/projects/sus-pol/about

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