Growing Mexico's Chemical Sector Twofold: The 2040 Vision

Q: Looking back at the 2014 energy reform and, more broadly, at the past decade. From your perspective, what have been the most significant changes in Mexico’s chemical sector over these ten years, and what have been the key phases that ANIQ itself has gone through during this period?

A: We can frame this as a transition. Ten years is a long period, and from ANIQ’s perspective, we have undergone a meaningful evolution. We have developed a range of services that we believe are increasingly relevant for our members, with a particularly important transition occurring during the pandemic.

In addition to our traditional role in institutional representation, we have a very strong focus on training. This effort was consolidated starting in 2013 with the creation of the Institute for the Competitiveness of the Chemical Industry. Through this institute, together with ANIQ’s emergency brigade training school, we currently train more than 6,000 people every year.

Historically, all of this training was delivered in person. During the pandemic, out of necessity, we transitioned our training programs and our engagement with members to virtual formats, which we did not have fully implemented at the time. This shift allowed us not only to maintain our activities, but also to significantly expand them. Today, we are no longer limited to training people near Mexico City. We now reach the entire country and have also expanded into Latin American markets, covering not only technical topics relevant to the chemical industry, but also soft skills that we have progressively incorporated.

We have complemented these efforts with diagnostic services and verification services. One of the most relevant developments in recent years is that ANIQ obtained certification from SEMARNAT to operate as a verification unit for greenhouse gas emissions. As you know, companies are required to report their emissions of these compounds to the authorities, and ANIQ is now certified to provide this verification service. Training, diagnostics, and verification have therefore become key pillars of our value proposition, alongside the consolidation of our traditional services.

From an industry perspective, since the 2013–2014 energy reform, we worked actively on its implementation. While the scope of the reform itself was not modified, the way in which the industry operates did change. More recently, we have also had to adapt to a new reform and to the corresponding regulations. We participated actively in the public consultations conducted by the Ministry of Energy regarding the hydrocarbons regulation.

One of our main concerns was to clearly define which chemical and petrochemical products would fall under this new regulatory framework. As initially drafted, the law’s description could have been interpreted as applying to the entire chemical industry, which would have meant that all products and all companies would be subject to multiple permits. This would have represented a very significant burden, both for industry and for the authorities.

With the publication of the hydrocarbons regulation last year, the scope was limited to five petrochemical products: methane, ethane, propane, butanes, and naphthas. We believe this provided greater viability for the industry. This change was both significant and highly relevant.

In addition, starting in late 2023 and into 2024, certain products became subject to new regulatory requirements. We have been working directly with the Ministry of Energy to streamline permitting processes for companies, particularly for permits that did not previously exist and that were introduced to prevent illegal diversion of products. While these measures aim to address serious issues, they also introduce additional regulatory obligations for companies that operate formally and in compliance with the law.

Overall, I would say that the new energy reform and the hydrocarbons regulation have been central issues. Fortunately, through ongoing dialogue with the authorities, these changes have not become an obstacle to competitiveness or to the industry’s development.

Q: How is ANIQ supporting private investment, and how fertile do you see the Mexican market today for a renewed growth of the chemical industry?

A: We were involved, from the conceptual stage, in the development of Plan México. When Plan México was published in January, we were pleased to see that the concepts and concerns we had shared were reflected in the document. These included investment promotion for the reactivation of the petrochemical industry, infrastructure development, and deregulation.

When we speak about deregulation, we do not mean the absence of regulation. What we seek, as in other countries, is regulation based on science. Regulations that are not science-based reduce competitiveness because they impose costs that other countries do not face, which can discourage investment.

Since the publication of Plan México, we have held numerous meetings with the Ministry of Energy, the Ministry of Economy, and PEMEX to understand how reactivation could be implemented. There is interest in reactivating complexes such as Morelos and Cangrejera, each of which contains multiple plants. Our role has been to analyze which plants could realistically be reactivated, what the associated costs might be, what investment recovery mechanisms could apply, and the timeframes involved. These discussions are ongoing and are currently at a definition stage.

Another important workstream relates to PEMEX’s mandate to increase national content in its procurement. We are working on identifying chemical products purchased by PEMEX and exploring mechanisms that would allow Mexican companies to substitute imports and meet national content objectives.

In parallel, we are working to improve Mexico’s overall competitiveness. In response to recent trade and tariff issues involving the United States, we have collaborated with authorities to adjust tariffs for countries with which Mexico does not have free trade agreements. Since late 2023 and throughout 2024, several tariff adjustments have been implemented, particularly for products with sharply increased import volumes. We believe these measures support domestic competitiveness.

We are also actively preparing for the USMCA review. Just last week, we held an event with our counterpart associations in Canada and the United States. Together, we presented to our respective authorities the importance of the agreement for North America’s chemical industry and issued recommendations in three areas: maintaining tariff-free trade among the three countries, strengthening rules of origin so that benefits apply to products with substantial North American content, and implementing Annex A, which focuses on science-based regulation. This annex was approved in 2018 but has not yet been implemented in any of the three countries.

All of this is directly linked to investment attraction. Investors seek access to raw materials, regulatory certainty, and confidence that their operations will remain viable over time.

Mexico has the potential to significantly expand its chemical industry, even to double its size. However, that potential will only be realized if the concepts outlined in Plan México are effectively implemented. The market exists, the industries we supply are substantial, and Mexico has a real opportunity to complement production in the United States and Canada, strengthening North America’s competitiveness as a whole.

Q: Building on that, what would be a realistic timeline for reactivating the industry? Where could Mexico be by 2030 or 2035?

A: When we developed Plan México, we conducted a detailed analysis of the chemical industry’s potential. The conclusion was that the industry could double in size over the next 15 years, representing investments of approximately US$45 billion. This growth would increase the industry’s contribution to GDP from around 2% to close to 4%.

However, timing is critical. As time passes, global capacity continues to expand in other regions, including the United States, China, the Middle East, and India. In many products, global overcapacity is already emerging, which reduces the economic rationale for new investments. This means that while the potential remains real, delays in implementation reduce the window of opportunity.

Q: What are ANIQ’s main objectives and priorities for 2026?

A: We have two overarching objectives. First, we must ensure and preserve the competitiveness of the existing industry. Second, we must create the conditions necessary to materialize new investments.

To achieve these objectives, three priorities stand out. First is the USMCA review, where ANIQ has been selected by the private sector to lead discussions on market access and rules of origin. The second is engagement in the implementation of the new Water Law regulations, which raise concerns due to the uncertainty created by annual permit renewals for an essential resource such as water. The third priority is climate change policy, particularly the commitments under Mexico’s updated nationally determined contributions, which set ambitious emissions reduction targets and present significant challenges for an industry that has already made substantial efficiency gains.

Beyond these, there are many other important issues, including the Circular Economy Law, COFEPRIS regulation, customs process efficiency, and infrastructure development. Ports, roads, and railways are increasingly saturated, and without investment in infrastructure, these constraints will eventually limit economic growth. For a sector that supplies more than 40 industrial segments and conducts over 800,000 foreign trade operations per year, infrastructure is not optional. It is a prerequisite for sustained competitiveness and growth.

These are the core issues we will focus on in 2026. If we do not address them, it will be very difficult to unlock the full potential of Mexico’s chemical industry.

The National Association of the Chemical Industry (ANIQ) serves as the primary representative body for the private sector. Founded in 1959, it currently represents over 95% of Mexico’s private chemical production through more than 250 member companies.