A Mexico City District court last week accepted requests by environmentalists to suspend implementation of a regulatory change that would allow up to 10% ethanol in automotive gasoline in Mexico. As Mexico Business Blog reported in July and August, Mexico’s Energy Regulatory Commission (CRE) published modifications to the country’s fuel quality standard, NOM-016-CRE-2016, in June permitting the increase in ethanol content. Environmental groups oppose the change arguing it will worsen air quality, and other groups with vested interests also raised objections. Last week’s granting of an injunction suspending the rule change for the moment reverts the NOM back to its previous language permitting up to 5.8% ethanol content, although ethanol-mixed gasoline is not currently sold in Mexican gas stations. In the wake of the latest injunction, both the CRE and its adversaries on the topic have a number of legal maneuvers open to them but local analysts are opining that the issue will remain tied up in the courts at least until next year.
Local media are reporting this week that multiple requests for injunctions have been filed before Mexican courts to suspend the changes to NOM-016-CRE-2016, which regulates gasoline quality in the country. As we posted last month, Mexico’s Energy Regulatory Commission (CRE) updated the NOM in June to allow up to 10% ethanol content (E10) in automotive gasoline, provoking high fives in the ethanol industry and rending of garments among environmental groups. Apparently the latest injunction request was filed by Gabriel Quadri – environmental consultant, erstwhile presidential candidate and ajonjolí de todos los moles medioambientales – who noted that other individuals and civil society organizations also have filed injunction requests (other sources cited the Mexican Center for Environmental Law (Cemda) and Consumer Power (EPC) as having filed prior injunction requests). Quadri’s legal filing demands specifically that national oil company Petroleos Mexicanos (Pemex) and other oil companies be prohibited from selling ethanol-blended fuel in the country, according to the reports in multiple media.
As per local custom, details on the whole affair are fuzzier than a baby hedgehog. The reports say a response from Mexico City’s Administrative Tribunal is expected next week, but we will not be holding our breath on that one. Nonetheless, considering that the CRE requested and received an exemption to the requirement of submitting a Regulatory Impact Statement (MIR) from the Federal Regulatory Improvement Commission (Cofemer) in order to increase the permitted ethanol content, one would think there could be grounds for granting the injunction. Quadri and other injunction-seekers are calling for a systematic process of scientific and technical analysis of the environmental and health impacts of E10 gas before any changes are approved to the NOM. We will continue to report on this topic as further information becomes available.
Mexico’s Energy Regulatory Commission (CRE) published modifications to the country’s fuel quality standard, NOM-016-CRE-2016, on June 26, 2017, stoking an ongoing kerfuffle among parties on either side of the ethanol-as-fuel debate. Beyond the philosophical grandstanding, the changes to the reg have potential to impact the evolution of the fuel industry in Mexico and as is often the case, they are generating no small amount of confusion.
Over the past 10 years, national oil company Petróleos Mexicanos (Pemex) has repeatedly announced its intention to introduce gasoline containing ethanol into the Mexican market, only to suspend the effort for one reason or another each time, most recently in 2015. The standard permitting up to 5.8% ethanol as an oxygenate in gasoline has been on the books since August 2016, yet as best we can determine, gasoline currently sold in Mexico is oxygenated with MTBE rather than ethanol. The recent modifications to the fuel standard include an increase in the maximum allowable percentage of ethanol in gasoline from 5.8% to 10%, clearing the way for the introduction of so-called E10 fuel. The move comes within the context of Mexico’s energy industry reform, which allows for private production, importation and sale of fuels as well as the elimination of government establishment of fuel prices. The elimination of gas price controls at the pump is currently being implemented by region, to culminate in nationwide free market pricing as of January 1, 2018. Continue reading Changes to ethanol NOM prompt fuel market debate