Decarbonization Landscape in North America and Mexico’s Role

North America plays a pivotal role in the global fight against climate change, accounting for a quarter of global emissions, according to Our World in Data. Given this significant contribution, the need for urgent action has never been more pressing as the effects of climate change continue to intensify. Last year, the severity of the crisis became undeniable when global temperatures soared to record highs, surpassing 1.55°C above pre-industrial levels and exceeding the 1.5°C target set by the Paris Agreement, as reported by the World Meteorological Organization. This rapid warming is not just a distant threat, it is already manifesting in extreme climate events that disrupt ecosystems, endanger biodiversity, and affect millions of lives worldwide. A glaring example is the surge in wildfires across the United States, where 64,897 incidents were reported in 2024, reflecting a 14.7% increase from the 56,580 recorded in 2023. These escalating disasters devastate natural landscapes and expose communities to even greater environmental and economic risks, underscoring the accelerating pace of climate change. At this critical juncture, incremental efforts are no longer sufficient; the scale of the crisis demands urgent, collective, and transformative action.

Yet, despite this clear urgency, North America faces internal divisions. Environmental and sustainability matters have become politicized, particularly in the United States and Canada, creating uncertainty about the region’s long-term commitment to decarbonization. Meanwhile, Mexico is emerging as a key player in the transition, demonstrating a commitment to sustainable development and clean energy. However, despite these differences, one thing is undeniable: the path is clear, and sustainability will remain a fundamental pillar in the region. 

Beyond Politics: The Steady Path to Sustainability 

As mentioned, sustainability has increasingly become a politicized issue in both the United States and Canada. In the United States, this shift is particularly evident with Donald Trump’s arrival, as his decision to withdraw from the Paris Agreement represents a shift in focus from the country’s previous environmental commitments. However, despite these challenges, the momentum for sustainability persists, steadily gaining strength as progress continues even in the face of political opposition. 

A key factor in the ongoing resilience of sustainability efforts is the role that market forces played in advancing renewable energy during Trump’s presidency. According to the World Resources Institute, renewable energy grew rapidly during his tenure, driven by declining costs and increasing demand from businesses and local governments. As a result, solar and wind power became more competitive than fossil fuels, illustrating how market dynamics continued to drive sustainability forward, despite lack of federal support. Furthermore, the difficulty in altering state-level environmental policies has allowed local leaders to continue pushing forward on climate action, with more than 5,000 leaders pledged to uphold the Paris Agreement’s goals. 

Beyond government action, grassroots movements and corporate initiatives have continued to shape the sustainability landscape. Programs like "America Is All In" highlight how climate action thrives beyond federal policies, with thousands of local governments, businesses, and organizations working together to drive change. Companies such as Amazon reinforce the notion that sustainability is not just a political matter but an economic imperative. As Kara Hurst, Amazon’s chief sustainability officer, stated following Trump’s executive order on the Paris Agreement, “We’re staying the course. We’re not veering from that. I think most corporations have long-term goals they’ll continue to pursue.” This commitment is reflected in Amazon’s continued leadership in renewable energy, as Bloomberg NEF data confirmed that in 2024, the company remained the world’s largest corporate purchaser of renewable energy for the fifth consecutive year.

In Canada, the topic of sustainability has also become highly politicized, and with the upcoming elections, the country’s approach remains uncertain, due to the increasing opposition to the carbon tax. However, despite the political debate, Canada’s commitment to ambitious emissions reduction targets remains unwavering, ensuring that sustainability continues to be a key priority. As discussions around carbon pricing evolve, other critical strategies, such as investment in clean technologies, reducing industrial emissions, and adopting region-specific policies, will play an essential role in shaping the country’s future climate agenda.

Driving Renewable Energy, Emissions Reduction

Mexico, with its growing industrial base and strategic position in North America, is becoming an important player in the push for sustainability. While the path to decarbonization presents challenges, the country’s recent policy developments reflect a strong commitment to reducing environmental impact and advancing sustainability.

On Jan. 1, 2025, Mexico made an important stride toward corporate sustainability with the introduction of the Sustainability Information Standards (NIS) by the Mexican Council of Financial and Sustainability Reporting Standards (CINIF). This marks a major milestone, as businesses are now required to disclose their environmental, social, and governance (ESG) practices. By enforcing these regulations, Mexico takes a significant step in creating a more responsible and transparent economy, an essential part of the country’s broader decarbonization strategy.

In parallel, Mexico is setting ambitious energy targets, with a goal of achieving 45% sustainable energy in its power grid by 2030. This vision aligns with the rapid growth seen in the distributed generation (DG) market. According to the Energy Regulatory Commission (CRE), the number of DG contracts grew by 28% in 2024, totaling nearly 490,000, and installed capacity rose by 35%, reaching 4.2GW. This growth is expected to continue as recent changes in the National Energy Plan 2024-2030 offer substantial benefits, particularly for the commercial and industrial sectors.

One notable shift is the increase in the exemption limit for solar installations, from 0.5MW to 0.7MW, a 40% increase. This adjustment will allow businesses to invest in larger solar systems, helping them reduce operational costs while contributing to sustainability goals. In addition, the expansion of "isolated supply" regulations now allows businesses to deploy up to 20MW of solar power for self-consumption, giving large energy consumers, such as industrial plants, greater control over their energy supply and costs. 

The Path is Clear

Despite the political challenges faced in the United States and Canada, the path toward decarbonization remains clear. State government actions, economic incentives, corporate commitments, and grassroots movements continue to drive progress. Meanwhile, Mexico is also making strides in its regulatory shift toward sustainability, with developments like the introduction of the NIS, the growing adoption of carbon taxes by states, new renewable energy targets, and changes to regulations in the distributed generation sector. As we at Solfium have observed, these changes are creating significant opportunities for businesses to align with sustainability goals, and we continue to support the transition by helping companies decarbonize their value chains through innovative solar energy solutions.

Looking ahead, the trajectory toward a decarbonized region remains increasingly inevitable, regardless of potential shifts in government priorities. This is because sustainability has become a critical priority, driven by global regulations, and stakeholder demands. Mechanisms like the European Carbon Border Adjustment Mechanism are accelerating the adoption of sustainable practices, particularly for North American companies that export to Europe and/or are part of their value chains. As a result, businesses must embrace sustainability not only as a regulatory requirement but as a strategic imperative — those who fail to act will be left behind, while those who lead the charge will be positioned for long-term success in an increasingly green economy. The direction is clear, even if there are some bumps in the road.