CAF Supporting Energy Transition Initiatives in Trinidad and Tobago

Green ammonia, wind energy, low-emission hydrogen, and offshore generation were identified as key opportunities for Trinidad and Tobago and the Caribbean in achieving a just energy transition. Natural gas, as the fossil fuel with the lowest emissions, was also highlighted as a vital ally in ensuring an equitable transition to renewable sources of energy.

These were some of the key findings from CAF’s flagship Report on the Economy and Development (RED) 2024, presented in Port of Spain, Trinidad, on Monday 2^nd December 2024. The report, titled Renewed Energies: A Just Energy Transition for Sustainable Development, provides an in-depth analysis of the region’s energy challenges and opportunities, with a focus on sustainable development.

Presenting the findings, Dr. Lian Allub, Principal Economist at CAF, noted: “Natural gas can be an ally during the transition because it is the fossil fuel with the lowest emission. It can serve as a fuel for public transport, where electrification is not yet feasible, or as a backup for intermittent renewable energy sources.”

Dr. Allub also called for modernized regulations tailored to renewable energy: “Many regulations in Latin America and the Caribbean were designed for a fossil fuel era and must evolve to support renewables.”

Allub said most of the Caribbean’s emissions came from the energy sector and to be able to make the renewable energy transition, carbon reduction was the first step.

“If we want to reduce emissions and we want to close the gross domestic product per capita gap with the developed world, the only way to do this is by reducing largely this emission. This can be done with an energy strategy that contains two factors: emission intensity which measures how clean or costly each unit of electricity that we produce and the other energy intensity which measures how costly each unit of output is,” he said.

Allub however noted it was important that the transition addresses the unique circumstances of Caribbean territories.

CAF’s Regional Manager for the Caribbean, Dr. Stacy Richards-Kennedy, said the report was timely for the region: “The report examines the triple challenge our region faces: reducing greenhouse gas emissions, reducing inequality and poverty, and closing the income gap with the developed world. Achieving this requires reversing sluggish growth trends, political support, robust infrastructure, and innovative financing – where institutions like CAF play a crucial role," she said.

“CAF sees Latin America and the Caribbean as a region of solutions, capable of leading the global energy transition by embracing these opportunities and adapting them to our unique context,” she added.

Colm Imbert, Trinidad and Tobago’s Minister of Finance thanked CAF for its support across multiple sectors. He said CAF has provided Technical Cooperation Assistance for projects including the construction of the new ANR Robinson International Airport in Tobago, public-private partnership evaluations for Chaguaramas’ dry dock, and digital tax payment systems among others.

“Trinidad and Tobago is an energy-based economy, and our energy transition must be measured and sensible,” said Minister Imbert. “We cannot abandon oil and gas production, but we can reduce our carbon footprint by maximizing renewable energy for electricity production, promoting electric vehicles, and advancing green energy sources like hydrogen.”

Minister of Energy and Energy Industries, the Honourable Stuart Young, announced a major initiative being undertaken— the country’s first green hydrogen pilot project at the Point Lisas Industrial Estate. “The Cabinet has granted us permission to build the first green hydrogen pilot project, and CAF is helping us with that,” he stated. CAF is also supporting efforts to expand commercial solar capacity.  The goal, he said, is to be as a leader in the energy transition in the Caribbean and globally.

The RED 2024 Report provides comprehensive insights into the region’s energy supply and demand, focusing on sectors such as transportation, industry, and residential energy use. It explores the macroeconomic impacts of the energy transition, including public finances, labour markets, and external trade, and offers actionable recommendations for policymakers and stakeholders.

CAF remains committed to supporting Trinidad and Tobago and the wider Caribbean in navigating a just energy transition and ensuring economic growth and environmental sustainability go hand in hand.