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.
Information collected from media reports over the last month:
- Steel: Steel producer Ternium, subsidiary of Italian-Argentinian steel and energy conglomerate Techint, announced plans to build a US$1.1 billion hot rolling mill in the northeastern state of Nuevo León. The new plant will allow the company to produce more sophisticated hot rolled steel sheeting using the most advanced technology. (Metal Bulletin, September 28, 2017)
- Tourism: Mexican industrial and services conglomerate Grupo IUSA initiated construction of a major new theme park in Mexico’s southeastern Riviera Maya tourism region. The US$840 million AMIKOO entertainment center is projected to include an amusement park, hotel, museum of Mayan archeology, convention center, shopping center, concert arena, food courts and other attractions. (September 19, 2017)
- Manufacturing: Mexican bathroom fixture manufacturer Helvex reported investment of US$40 million this year to expand production capacity. A 30% increase in the company’s output of products such as faucets, shower heads and drains is allowing Helvex to target South American markets more aggressively. (El Financiero, September 19, 2017)
- Logistics: Mexican pharmaceutical wholesaler Maypo inaugurated a new distribution center in Mexico City. The US$33 million complex includes 3.2 million cubic feet of warehouse capacity for dry and refrigerated product. (El Financiero, September 13, 2017)
- Brewing: Mexican brewer Grupo Modelo, subsidiary of Belgium-based brewing multinational Anheuser-Busch InBev, projects investment of approximately US$777 million in 2018, the company reported. Projects were not specified other than that the company plans to expand production capacity. (El Financiero, September 8, 2017) Continue reading Recent and upcoming investment in Mexico
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