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The new circular economy law for Mexico City

By Alfonso Caso - AOSENUMA
Managing Partner


By Alfonso Caso | Managing Partner - Tue, 06/20/2023 - 09:00

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Today's environmental and economic challenges demand sustainable solutions in which the concept of the circular economy has emerged as a transformative paradigm. The circular economy (CE) presents an unprecedented opportunity to revolutionize our value chains and establish a more sustainable future. By embracing principles of regeneration, optimization, and extended producer responsibility, companies can generate substantial economic, environmental, and social benefits.

The incorporation of the circular economy into value chains fosters collaboration, efficiency, and the creation of shared value, paving the way for a more balanced and resilient system. Unlike the linear model of production and consumption, the circular economy centers around maximizing the value of resources and minimizing waste throughout value chains. This comprehensive approach has become a strategic imperative for businesses and society as a whole.

The circular economy is founded upon key principles that revolutionize how we produce, consume, and manage resources. To achieve this, it relies on both technical and biological cycles. The technical cycles enable the recovery and restoration of components and materials in products through processes such as maintenance, reuse, redistribution, repair, renewal, remanufacturing, or recycling. These are complemented by biological cycles, which facilitate the decomposition and reintegration of organic materials into living systems, utilizing nature's own cycles to produce renewable resources.

Mexico's Legal Framework for Circular Economy

Recognizing the significance of a legal framework for the circular economy (CE), Mexico took a crucial step by publishing a draft decree on Nov. 18, 2021, issued by the Senate, which introduces the  or the General Law of Circular Economy. The importance of this law aims to promote the preservation of the value of products, materials, and resources within the economic cycle for as long as possible, thereby minimizing waste generation.

The LGEC defines the circular economy as a "system of production, distribution, and consumption of goods and services that seeks to redesign and reintegrate products and services into the economy, ensuring the value, lifespan, and utilization of products, materials, and associated resources, with the goal of preventing or minimizing waste generation. This involves reincorporating them into cyclical or biological production processes and fostering changes in production and consumption habits."

Moreover, the project also addresses the development and promotion of the integration of informal sectors engaged in waste recycling. Municipal governments are entrusted with the responsibility of maintaining an official registry of waste collectors, overseeing the sale, recycling, and utilization of by-products with commercial value. These measures aim to improve working conditions in their facilities and professionalize their activities.

The objective of this initiative is to drive the transformation of cities and communities toward sustainability by adopting criteria that promote the use, generation, and access to clean and renewable energy. Furthermore, it seeks to foster a transition toward a culture of enhanced sustainability.

The circular economy is defined as a system of production, distribution, and consumption that aims to redesign and reintegrate products and services into the economy, preserving their value and extending their lifespan. It focuses on minimizing waste generation by incorporating products, materials, and resources into cyclical or biological production processes. Additionally, it encourages changes in production and consumption patterns.

The project also emphasizes the development and promotion of the integration of informal sectors involved in waste recycling. Municipal governments are responsible for officially registering trash collectors and regulating the sale, recycling, and utilization of by-products with commercial value. These measures aim to improve working conditions in recycling facilities and professionalize their operations.

The objective of this initiative is to promote the transformation of cities and communities into sustainable entities, guided by sustainability principles. It aims to foster the use, generation, and accessibility of clean and renewable energy sources while promoting a shift towards a culture of greater sustainability.

The Ministry of Environment and Natural Resources (SEMARNAT) is responsible for the implementation of this ordinance and may enter into agreements with states and municipalities to delegate the execution of these functions. Currently, the draft is under analysis by the Chamber of Deputies for approval and official publication. However, on Feb. 14 of this year, the Congress of Mexico City approved a new Circular Economy Law, similar to existing statutes in the states of Queretaro, Baja California, and Quintana Roo (Law for the Prevention, Integral Management, and Circular Economy of...). This act aims to drive the transition toward a circular and sustainable model by establishing conditions that are compatible with the success of an appropriate economic model.

The significance of this law lies in the fact that Mexico City, according to data from INEGI, contributed 15.3% of national Gross Domestic Product in 2022, making it the most economically important federal entity. Therefore, it holds strategic importance in fulfilling Mexico's commitments regarding global warming and the UN’s Sustainable Development Goals.

Circular Economy Law of Mexico City

The Circular Economy Law of Mexico City introduces measures to facilitate the transformation, validation, and promotion of products, activities, and services for businesses. The purpose is to contribute to the restoration and regeneration of development, while fostering economic growth, creating green jobs, and minimizing negative environmental impacts. The design, operation, implementation, and monitoring of public policy instruments are the shared responsibility of the Ministry of the Environment of Mexico City (SEDEMA) in coordination with the Secretariat of Economic Development (SEDECO). The law came into force on March 1. Its structure is divided into three sections:

  1. Circularity Assessment:

The circularity assessment is a voluntary procedure to ensure compliance with circularity criteria for products and services produced, developed, distributed, or marketed for Mexico City. Its purpose is to maintain maximum utility and value of these products and services, while reducing their environmental impacts and promoting economic growth and what is called “green jobs.” After submitting a Circularity Manifesto, interested companies will receive information regarding their degree of compliance with the Circularity Criteria. SEDEMA (Ministry of the Environment of Mexico City) may also verify the declared information provided by companies regarding their compliance with the Circularity Criteria for their processes, products, and services in the territory of Mexico City.

  1. Circularity Label:

The circularity label is a distinct indicator linked to the Circularity Assessment. It allows for visible differentiation of products, services, or activities that meet circularity criteria, making it evident to society in general and potential consumers.

  1. Mexico City Circular Economy Program:

The Circular Economy Program (PEC) is a strategic planning instrument that integrates, coordinates, and promotes public policies, programs, projects, and activities aligned with the principles and design approaches of the law, aiming to transition toward a circular economy. The program is jointly prepared by SEDEMA, SEDECO (Secretariat of Economic Development), the Ministry of Labor and Employment Promotion, and the Ministry of Education, Science, Technology, and Innovation. It is approved by the head of the government of Mexico City every six years.

The implementation of this law poses several challenges, particularly concerning the integration of informal economy sectors into the value chains of both public organizations and private companies. It is essential to establish mechanisms that facilitate recycling infrastructure, increase the availability of high-quality recycled materials, and a greater collaboration among businesses, government to establish alliances and collaborative networks.

By embracing the principles of the circular economy, societies can make significant progress toward achieving sustainability objectives and fostering a more sustainable and resilient future. These actions are crucial for improving the overall impact of the law's implementation.

Photo by:   Alfonso Caso

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