Costa Rica Lets State Oil Company Sell Green Fuels

Costa Rica's lawmakers just rewrote a 43-year-old law that kept the country's state fuel company locked into petroleum, clearing the way for biofuels, green hydrogen, and other renewable options to join the mix.

The Legislative Assembly approved the reform on July 16 with 54 votes and zero opposition, ending a legislative effort that had stalled for more than a decade. The new law lets Recope, the state-owned fuel company, research, import, process, and sell fuels beyond oil for the first time since 1981.

Under the old rules, Recope could only handle petroleum and its byproducts. Now it can work with biofuels, green hydrogen, and even natural gas, though strict language in the law prevents gas projects from replacing renewable energy investments.

The change matters because Costa Rica imports nearly all the oil it burns, leaving families and businesses at the mercy of global price swings. That's a sharp contrast to the country's electricity sector, which ran on 98.6 percent renewable power in 2025, according to the national electricity institute.

But here's the gap: while Costa Rica's lights run clean, roughly 70 percent of all the energy the country uses still comes from imported oil and gas, mostly for transportation. This reform is designed to start closing that gap.

The Ripple Effect

The most immediate change won't be green hydrogen at the pump. It will be E10 ethanol-blended gasoline, the same 10 percent ethanol mix sold across much of the United States.

Recope has already tested the blend in the Pacific region, and it's designed to go into premium gasoline first since newer engines handle it easily. The ministry originally hoped to launch it by 2027, though that timeline has slipped as Recope prepares an international tender for ethanol that officials say will take about a year.

The broader shift could take longer, but the foundation is now in place. Before Recope can enter any new fuel market, it must show the Ministry of Environment and Energy that each step makes technical and policy sense.

For a country that's already proven it can run its electrical grid almost entirely on renewables, bringing that same ambition to transportation could cut import costs, stabilize prices, and reduce carbon emissions all at once.

Costa Rica just turned a legal roadblock into a launchpad for cleaner transportation fuels.