Energy Reform Moves to Chamber of Deputies, Despite Concerns

Mexico’s 2025 Energy Reform, proposed by President Claudia Sheinbaum and already approved by the Senate, advances to the Camber of Deputies. The reform seeks to redefine the country’s energy sector through the creation of eight new laws and modifications to three existing ones. However, concerns remain regarding legal risks, financial feasibility, and regulatory oversight.

According to an analysis by Mexico Evalúa, one of the most contentious aspects of the reform is the elimination of banking, commercial, and tax secrecy protections for hydrocarbon permit holders during government inspections. The organization warns that this measure could be unconstitutional and may affect business privacy. Additionally, the Ministry of Finance says that the reform will have no budgetary impact, a statement that raises concerns about the financial viability of the proposed changes. 

Another significant change is the proposed dissolution of independent regulatory bodies such as the Energy Regulatory Commission and the National Hydrocarbons Commission. Their functions would be absorbed by the Ministry of Energy, increasing state control over the sector. This shift has raised concerns about conflicts of interest and reduced regulatory certainty for investors. Mexico continues to rely on fossil fuels for 79% of its electricity generation, exposing the country to volatility in global oil and gas markets. Additionally, dependence on imported natural gas from the United States presents a potential vulnerability in the face of trade or geopolitical tensions.

Despite these concerns, the reform also introduces measures aimed at expanding renewable energy and facilitating electricity generation for smaller producers. The elimination of permit requirements for projects up to 700KW is expected to benefit small businesses and households by simplifying investment in self-generation. The reform also promotes mixed-investment projects with a minimum of 54% state participation, reinforcing the role of the Federal Electricity Commission in the sector.

The government has announced a US$23.4 billion investment plan for renewable energy infrastructure throughout the administration, focusing on distributed generation and ensuring energy supply for the industrial sector. Additionally, a new regulatory framework is expected to improve service for CFE consumers. However, questions remain regarding the financial sustainability of these initiatives and the level of private sector participation that will be permitted.