Ethanol-incorporating E10 May Be Legalized in 2022

In countries like the US, ethanol has replaced methyl tert-butyl ether (MTBE) as an oxygenate component in gasoline, due to its often lower prices and growing concern regarding MTBE’s polluting effects. However, in Mexico, the use of ethanol to create E10, which is 90 percent gasoline and 10 percent ethanol, is not permitted. This led companies and organizations to voice their disagreement and request to meet in working groups to ensure E10’s legalization.

In 2017, CRE modified NOM-016-CRE-2016, and authorized the use of E10, which is said to be virtually as efficient as regular gasoline. Ethanol is generally less expensive than MTBE, which is widely used as the oxygenate to enhance combustion in gasoline. The pricing trend has only gotten more evident on the back of globally surging oil prices. As of June 2022, U.S. Grains Council reports that ethanol (FOB Gulf) stands at US$2.921/gallon while MTBE (FOB Gulf) rose to US$4.889/gallon.

However, in January 2020, Mexico’s Supreme Court (SCJN) ruled against the amendment that allowed the use of E10 on the basis of administrative discrepancies. This decision led to criticism from Kenneth Smith-Ramos, Head of the Trade and NAFTA Office, the Ministry of Economy of Mexico, who called out the court for not focusing the ruling on “technical criteria based on scientific foundations in regard to the effect that ethanol has, either based on its price or its environmental impact.”

Although the SCJN pointed out that CRE could start the process to modify the NOM-016-CRE in 2022, as it is due process to revise NOMs every five years, the state regulator has yet to do so. In response, many companies, as well as the Ministry of the Environment of Mexico City (SEDEMA), have expressed their interest in the revision of NOM-016. SEDEMA published the Management Program to Improve the Air in the Metropolitan Area of the Valley of Mexico (ProAire ZMVM) 2021-2030, in which the necessity to update the NOM-016 and monitor the quality of fuels is highlighted.

In 2021, the government of Nuevo Leon also asked CRE to join the working groups in charge of standardizing the use of fuels and promoting the approval of E10. “We are hoping that this coalition of companies can present the CRE… studies with the collected evidence of the last three years in countries in Europe and South America. In over 70 countries ethanol is used in the shape of E10 as an oxygenate,” commented Smith-Ramos.

Another proponent organization for the legal use of E10 is the Association for Biofuel Mobility in Mexico (AMBM). In an interview with Forbes, Luis Alonso González, Technical Director, AMBM emphasized the economic and environmental benefits that the use of ethanol in E10 could bring. González added that it could lead to the installation of about 100 biorefineries, each with an investment of US$100 million, to cover the national supply.

Nevertheless, some favor continuing the use of MTBE as the oxygenate component in gasoline. LyondellBasell, for example, produces this chemical in the US and supplies it to Latin America. The company argues that MTBE enhances fuel efficiency and is not damaging to the air quality. Another like-minded organization is the Association for Efficient Fuels in Latin America (ACELA). These entities, as well as other industry specialists, claim that ethanol is incompatible with Mexico’s vehicular mobility and assert that its use would increase carbon emissions and food prices. 

Whichever way the decision goes, many organizations are expecting CRE to finally resume the official discussions around E10 and provide an adequate conclusion to the regulatory matter.