Challenges, Opportunities for Biofuels in Mexico

Experts highlight the potential of biofuels to facilitate the energy transition in Mexico, particularly in sectors like transportation and industry. However, regulatory hurdles hinder their widespread adoption, delaying their integration into the energy landscape.

According to the International Energy Agency (IEA), while terrestrial mobility is shifting toward electromobility, progress in sustainability for air and maritime transport has been slower. Biofuels and hydrogen are identified as key elements for decarbonizing these sectors, potentially constituting 10% of global consumption by 2030.

In Mexico, biogas and biomass offer long-term opportunities, but their development is hampered by regulatory gaps and a lack of awareness regarding their utilization. Lorena Espinoza from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) emphasizes the need for collaboration between authorities and the private sector to address these challenges.

Mexico holds the potential to fulfill its international environmental obligations by tapping into gases derived from biomass waste, as stated by the Mexican Association of Biomass and Biogas (AMBB). “Mexico has a wealth of resources suitable for biogas production, including 53 million poultry, 16.6 million pigs and cattle, industrial waste, and a staggering 800Mt of biomass, capable of generating 32 million m3 of biogas,” said Guillermo Chaim Serrano, Director General, Brimex Energy, during Mexico Business Summit 2023.

Abel Clemente Reyes, President, AMBB, underscored that Mexico generates 62Mt of CO2e daily through numerous biomass processes. Reyes proposed that by harnessing this resource, Mexico could align with the emission reduction goals outlined in the Paris Agreement to combat climate change. "Just one day of nationwide utilization could help us achieve our Paris Agreement objectives,” he says.

Jalisco, Guanajuato, and Nuevo Leon have the most potential to develop biogas projects due to their main industries: tequila production, cattle, and industrial production. These three sectors produce biomass, biogas, and industrial mud, which can be turned into renewable resources. With a more established production, these resources could even generate electricity for public use. “This alternative would contribute to the diversification of the energy matrix and reduce dependence on fossil fuels, which national and international companies are beginning to prioritize,” says Chaim.

Speaking at the Mexa 2023 Energy Forum organized by the Mexican Association of Energy Distributors, in collaboration with the Senate, Reyes unveiled a recent AMBB study highlighting the annual generation of 140MMt of solid waste within the country's biomass matrix. Notably, 13 to 15MMt of waste originate from human solid waste, emphasizing the significant potential for biomass utilization.

Advantages of biogas as an energy source include waste management from livestock activities, leveraging existing natural gas infrastructure, electricity generation, and providing energy for industry and remote communities to address social needs, according to Ana Laura Ludlow, Vice President of Government Affairs and Sustainability, ENGIE Mexico. Ludlow stressed the role of biogas in facilitating a fair transition and gradual decarbonization, especially in regions lacking gas pipelines, where waste can be converted into biogas.

Despite the substantial amount of organic waste available, logistical challenges and limited investment opportunities hinder the sector's growth potential.

Alberto Escofet, Senior Consultant of BlacktoGreen Consulting underscores the opportunity to replace fossil fuels with more sustainable alternatives. However, he stresses the importance of infrastructure development and policy reinforcement to provide certainty for investment and unlock the full potential of bioenergetics.

Galo Galeana, Partner of the Association for Mobility With Biofuels in Mexico highlights regulatory limitations, such as the low ethanol blending threshold authorized by fuel quality standards. Federico Salcedo, a regional consultant, notes disparities in biofuel implementation across North and South America, urging Mexico to accelerate its efforts in line with regional advancements.