Feasibility of Biofuels in Mexico

Over the past decade, Mexico has intensely questioned whether there is truly an opportunity to boost the biofuels sector. On one hand, biofuels appear to offer a viable solution to the complications faced by the energy sector; however, they ultimately fail to be developed, implemented, or fully integrated into the corresponding production chains. 

From academia to civil associations, and across various levels of government, successful case studies from other countries have been analyzed. Initially, European examples inspired an optimistic path. However, as we have confronted the effects of climate change, scenarios have shifted — along with how we envision a fair and equitable energy transition. As a result, analyses have become more regionalized, identifying countries in Latin America with significant progress in the field, such as Brazil, Argentina, and Colombia, nations with conditions more comparable to those in Mexico. 

Given this, the question resurfaces once again: What does Mexico need to unlock the biofuels sector? Perhaps the most striking aspect is that we already know the answer. This is not a new issue. Elements like targeted public policy, clear regulation, adequate incentives, among others, can — without oversimplifying the matter — be summarized in the need for legal certainty and strong political will. 

I could focus on highlighting everything that unfortunately has not been done, or has been done poorly;  however, I believe that a shift in paradigm also lies with those of us who have the opportunity to share perspectives in this dynamic sector. It’s about making a 180° turn and asking ourselves what we can do. Starting from this premise, the good news is that we now have information offering a promising outlook: less than a month ago, the secondary laws were issued — among them, the Biofuels Law, which repeals the Law for the Promotion and Development of Bioenergetics (LPDB). 

As we begin to familiarize ourselves with this new law, we find that it includes a new catalogue of definitions that were not previously found in the LPDB. This helps to resolve legal gaps that have left regulated parties in a state of uncertainty regarding bioenergetics. 

With the enactment of the Biofuels Law, the concepts of “bioenergetics” and “other biofuels” have been eliminated, giving way to a broader definition. This includes not only biodiesel or biogas but all “gaseous, liquid or solid fuels produced from the direct energy use of biomass or obtained through its processing.” Additionally, “biomass” is now defined as “renewable organic matter whose energy content is suitable for use as biofuel.” 

Beyond these additions, it is worth noting that the law itself — not a future regulation — now establishes the procedures required to obtain permits and authorizations for carrying out activities related to biofuels. 

Other relevant topics in the national context include the opportunities emerging for the biofuels sector within other secondary laws and the Mexico Plan. Even under the ongoing threat of tariffs, energy sovereignty is moving beyond political discourse and becoming an increasingly urgent necessity. At the same time, other driving forces, such as the need for climate action, continue to support the diversification of the energy matrix and thus the immediate adoption of biofuels. 

We are also witnessing new synergies not seen for quite some time: collaboration between ministries — mainly Economy and Energy — that, for many of us involved in these matters, makes perfect sense. Yet, it doesn’t stop there. Civil associations and private companies have also joined these discussions, leading to a more holistic approach. Even forums and spaces within the chambers of deputies and senators have helped decision-makers become more familiar with the topic and, above all, understand its relevance. 

It is important to emphasize that this does not mean everything is already in place. We still need to wait for the regulation derived from the Biofuels Law, observe how it will interact with the hydrocarbons sector, define its role in the country’s energy transition, and monitor the processes underway at the Ministry of Energy, which itself has undergone important changes. Nevertheless, this represents a highly favorable starting point for the sector.