On February 4th, 2025, the Federal Executive presented before the Senate a bill with a draft decree that includes the issuance of new secondary laws for the energy sector, as well as amendments to some existing laws (the "Bill"). If approved by Congress, the Bill would revoke the main laws that currently frame and govern the energy sector in Mexico.
The Bill derives from the amendments to Articles 25, 27 and 28 of the Political Constitution of the United Mexican States (the "Constitution") regarding State strategic sectors and companies, and organic simplification published in the Official Gazette of the Federation ("DOF") at the end of 2024.
The new laws included in the Bill's legislative package are as follows:
The Bill provides for the amendment of the following laws: i) Law of the Mexican Petroleum Fund for Stabilization and Development; ii) Hydrocarbons Sector Revenues Law; and iii) Organic Law of the Federal Public Administration.
From the general analysis of the Bill, we can identify various new schemes and models of public, private and joint participation in several activities of the electricity and hydrocarbons industries, as well as modifications to the structure and competence of the regulatory bodies of the energy sector and of the Ministry of Energy ("SENER"). Likewise, modifications to the legal nature, objectives and operation of the Federal Electricity Commission ("CFE") and Petroleos Mexicanos ("PEMEX"), are expected to play a very important role.
The following is a summary of the most relevant topics of the new laws contained in the Bill.
Purpose of the Electric Sector Law (“LSE”): to regulate the planning and control of the National Electric System (“SEN”), the Public Service for the Transmission and Distribution of Electric Energy, as well as other activities of the electric sector.
Binding Planning of the Electric Sector: in charge of SENER, which shall prepare the Electric Sector Development Plan. Binding planning, among other principles, shall: (i) guarantee the non-prevalence of private parties over the State. The State shall maintain at least 54% of the average of the energy injected into the grid in one calendar year. Prevalence[1] shall be achieved within a framework of operation of the Wholesale Electricity Market (“MEM”), supported by an Economic Load Dispatch[2], subject to restrictions of Reliability and security; and (ii) conduct planning with Energy Justice[3] policies.
Types of Activities:
a) Generation: it can be carried out by the State, private individuals on their own or together in joint investment schemes. Generation can be carried out through the following figures:
- Joint development schemes: Power Plants that are developed jointly by the State and private parties under:
- Cogeneration: when the production of electric energy: (a) is carried out jointly with steam or another type of secondary thermal energy, or both; (b) when the thermal energy not used in the industrial processes of the permit holder is used for the direct or indirect production of electric energy; or (c) when fuels produced in the industrial processes of the permit holder are used for the direct or indirect generation of electric energy.
b) Commercialization, which includes one or more of the following activities:
c) Electric Supply:
d) Energy Storage: SENER can establish the terms, conditions and modalities under which the Electric Energy Storage Systems participate in the activities of the electric sector, as well as the necessary permits and requirements. CENACE shall include the guidelines related to the Electric Energy Storage Systems within the MEM.
e) Operation of the MEM: CENACE is in charge of the operation of the MEM. CNE monitors the operation of the MEM and the determinations of CENACE, to ensure the efficient operation of the MEM and compliance with the Market Rules.
f) Other activities: the following activities do not require a Supplier permit or registration and are not considered commercialization:
Considerations after the publication of the LSE:
Reconnaissance, Exploration, and Extraction Activities
The Hydrocarbons Sector Law ("LSH") establishes that these activities can be carried out by PEMEX or any other State-owned Company or parastatal entity, as well as by any individual, with prior authorization or permit. The information obtained from these activities belongs to the Mexican Nation and must be delivered to SENER.
SENER will be responsible for granting the Entitlements to PEMEX under the following modalities: a) Entitlements for Own Development; and b) Entitlements for Joint Development.
SENER will determine the area to be granted in an Entitlement, as well as the technical and operational terms and conditions. If PEMEX decides not to develop the area, SENER may decide that its development be carried out by other legal entities through an Exploration and Extraction Contract.
a) Entitlements for Own Development
SENER may grant titles for Entitlements for Own Development for the Exploration and Extraction of Hydrocarbons exclusively to PEMEX, which must act as the Operator.
PEMEX may only enter into services agreements with private parties under schemes that ensure maximum productivity and profitability, provided that compensation is paid in cash.
PEMEX may request SENER, with prior authorization from its Board of Directors, to substitute an Entitlement for Own Development for an Entitlement for Joint Development.
b) Entitlement for Joint Development
SENER may grant Entitlements for Joint Development to PEMEX, if requested, given that PEMEX needs to complement its technical, operational, financial, or execution capabilities for the Exploration and Extraction activities, for which it must have one or more Participants.
PEMEX and one or more Participants will enter into a "Joint Agreement," which will establish the terms and conditions for carrying out activities inherent to the Entitlement. Among other aspects: the participation interest (PEMEX must maintain a participation interest of no less than 40%), cooperation, risks, rights and obligations over assets, liabilities, and compensations, as well as the mechanism for agreeing on technical, operational, and budgetary decisions in the operation. It is established that PEMEX should not make economic contributions.
The selection of the participant(s) must be carried out under the best practices in the matter and ensuring the best conditions for the Mexican State and PEMEX. Joint Agreements must be registered before SENER.
The ownership of Hydrocarbons in the subsoil will belong to the Mexican Nation. These Joint Agreements can only be amended by SENER, with prior agreement with PEMEX, on an exceptional basis. Commercial law and common law are applicable for the execution and performance of Joint Agreements.
These may be granted by SENER on an exceptional basis when PEMEX expressly notifies that it has no interest or capacity for their development. The selection of the Contractor must be carried out through a bidding process.
SENER must establish the contracting model for each Contractual Area to be tendered or awarded by choosing from, among others, service contracts, shared utility or production contracts, or license contracts (same modalities provided in the Hydrocarbons Law).
PEMEX may enter into alliances or associations to participate in the bidding processes for Exploration and Extraction Contracts. Alliances or associations can be carried out under schemes that ensure maximum productivity and profitability. PEMEX cannot enter into public-private partnership agreements with private parties.
SENER must authorize the formation of alliances or associations. SENER may include mandatory participation of the Mexican State, through PEMEX, including the percentage of participation. In areas with transboundary reservoirs, PEMEX's participation is mandatory (at least by 20%).
For disputes related to Exploration and Extraction Agreements, alternative mechanisms, such as arbitration, may be provided for their resolution.
Migration of Entitlements for Own Development to Exploration and Extraction Agreements may be requested, with SENER's authorization.
PEMEX and Contractors must obtain authorization from SENER according to the regulations it issues to carry out well drilling. SENER shall also authorize the Surface Reconnaissance and Exploration activities to investigate the possible existence of hydrocarbons.
In total, the Exploration and Extraction activities carried out by Entitlements and Contracts must achieve an average of at least 35% of national content.
Other Activities of the Hydrocarbons Industry:
The following activities will require a permit from the corresponding authorities:
|
SENER |
CNE |
|
Treatment, refining, import, export, transportation, storage, and commercialization of Oil. |
a) Processing, decompression, liquefaction, transportation, regasification, storage, distribution, commercialization, and public sale of Natural Gas. |
|
a) Import and export of Natural Gas. |
b) Formulation, transportation, storage, distribution, commercialization, and public sale of Oil Products. |
|
c) Import and export of Oil Products. |
c) Transportation, storage, and commercialization of Petrochemicals. |
|
d) Import and export of Petrochemicals. |
Management of integrated systems. |
SENER and CNE are responsible for regulating and supervising, as well as granting, modifying, updating, suspending, and revoking permits for the referred activities.
Permit holders of these activities must comply with the obligation to submit weekly information related to volumetric controls, measurement, quality of Hydrocarbons, Oil Products, and Petrochemicals, as well as commercial operations with clients and suppliers, and other information required by the Mexican authorities for supervision and statistical purposes.
SENER and CNE, within their relevant attributions, may coordinate with PEMEX or any governmental Mexican authority (at all three levels) to verify and ensure that activities under the LSH are carried out without prejudice to public and social interest.
The LSH will establish the requirements that applicants must meet to obtain permits, and specific evaluation criteria may be issued by the competent Mexican authorities.
The definition and scope of obligations regarding commercialization under the LSH are broader and differ from those established under the Hydrocarbons Law, so it is expected that the Regulation and corresponding provisions will provide more detail on this matter.
A new regulated activity, called "Formulation," is included, which will allow the mixing of Oil Products with additives and biofuels to obtain oil products that comply with the corresponding Mexican Official Standards.
The transfer of permits can only be carried out with prior authorization from SENER or CNE, as applicable, provided that the permits are valid and in compliance with all obligations, and that the transferee meets the applicable requirements and commits to fulfilling their obligations.
Some of the causes for termination, expiration, and revocation of permits will be updated. Additionally, it is included that, for the continuity of operations of permitted activities, the Mexican authority may contract PEMEX for the management and control of occupied, intervened, or suspended facilities, as the activities and services covered by any permit are considered of "public utility."
SENER is responsible for preparing the five-year plan for the expansion and optimization of Pipeline Transportation and Storage infrastructure, considering proposals from integrated system managers. SENER is also responsible for determining the incorporation of new infrastructure in these systems, according to applicable policy and prioritizing the capacity of state-owned companies (PEMEX and CFE) and their subsidiaries for new projects, considering them of social and public interest. Integrated system managers will operate with prior permission granted by CNE.
The National Center for Natural Gas Control ("CENAGAS") is the independent operator of the National Integrated Natural Gas Transportation and Storage System. Its purpose is to ensure continuity and security in the provision of services of this system.
Permit holders providing third-party transportation and distribution services via pipelines, as well as storage, must offer non-discriminatory open access to their facilities and services.
This obligation will not apply to state-owned companies or their subsidiaries, i.e., PEMEX and all its storage and pipeline transportation infrastructure, which could have different practical implications for market participants.
The sale of aircraft fuels directly to the public is prohibited. However, the aircraft fuel Distribution permit granted by CNE will allow its sale.
Hydrocarbons, Oil Products, and Petrochemicals must be imported, transported, stored, commercialized, distributed, sold, dispensed, and supplied without alteration or adulteration, and any type of alteration is sanctioned.
Transfer or Relocation between Containers (Decanting) can only be carried out as part of the activities inherent to the permits for the Storage and Distribution of Hydrocarbons, Oil Products, and Petrochemicals, as well as the Formulation of Oil Products permit, and must be carried out in the facilities included in such permits.
CNE may issue general application provisions for the regulation of activities referred to in the LSH, including the terms and conditions to which the provision of services must be subject, as well as the determination of applicable compensations, prices, and tariffs, among others.
SENER or CNE may establish provisions to be complied with by the permit holders of Transportation, Storage, Distribution, Public Sale, and Commercialization of Hydrocarbons, Oil Products, and Petrochemicals, as well as by the users of these products and services, to promote the efficient development of these markets.
In any case, cross-participation must be authorized by SENER, with a favorable opinion from the relevant Mexican authority on antitrust matters. This does not apply to the Economic Interest Group to which state-owned companies belong.
The Hydrocarbons industry is of exclusive federal jurisdiction and public utility, allowing for the establishment of legal easements or the necessary surface occupation or affectation for the realization of its activities. Hydrocarbons Exploration and Extraction activities are considered of social interest and public order, taking precedence over any other activity involving the use of the surface or subsoil of the affected lands.
The compensation, terms, and conditions for the use, enjoyment, or affectation of the lands, goods, or rights necessary to carry out Hydrocarbons Exploration and Extraction activities, as well as pipeline transportation, must be negotiated and agreed upon between the owners or holders of these lands, goods, or rights, including real, ejidal, or communal rights, and the Assignees, Contractors, or Pipeline Transportation Permit Holders. In the case of private property, acquisition may also be agreed upon.
Individuals interested in obtaining a permit or authorization to develop Hydrocarbons projects, as well as Entitlement holders and Contractors, must submit to SENER, for approval, a Social Impact Statement for the Energy Sector.
Relevant Transitory Provisions
Purpose
The main purpose of the Law of the National Energy Commission ("CNE Law") is to regulate its organization and operation, as well as to establish its competences, powers and attributions.
Legal Nature
The CNE will function as a sectorized body under SENER and will have technical, operational, management and decision-making independence, and its purpose will be to regulate, supervise and impose sanctions on activities in the energy sector (activities related to electricity and hydrocarbons) in order to promote their efficient development.
Attributions
In particular, the CNE will be empowered to regulate the tariffs, fees and prices of the activities of the electricity and hydrocarbons sector, to grant, modify, terminate and supervise the permits for the generation and commercialization of electricity, to monitor and supervise the MEM, and to grant, modify, terminate and supervise the following permits: (i) processing, liquefaction, regasification, compression, decompression, transportation, storage, distribution, commercialization and public sale of natural gas, (ii) for the formulation, transportation, storage, distribution, commercialization and public sale of petroleum products, and (iii) for the transportation, storage and commercialization of petrochemicals.
Organizational Structure
The CNE will be directed and managed by a General Directorate and must have a Technical Committee to ensure its decisions are jointly agreed upon. Additionally, the CNE must have administrative units, which will be determined in its internal regulations.
The head of the General Directorate will be freely appointed and removed by the head of the Federal Executive and ratified by the Senate and will have, among others, the following powers:
The Technical Committee will be a collegiate body whose purpose will be to give its opinion, analyze, evaluate, rule and approve the legal or administrative acts issued by the CNE within the scope of its competencies and which will be integrated as follows:
Relevant Transitional Provisions
Legal Nature and Structure
The Law of the State-owned Company, Federal Electricity Commission (“CFE Law”) establishes that the CFE will be a state-owned entity within the Federal Public Administration, sectorized to SENER; it will have technical, operational, and managerial independence, as well as its own legal personality and assets. The subsidiary companies will be dissolved, with the CFE assuming their rights and obligations.
General Management and Board of Directors
The management of the CFE will be entrusted to a General Director appointed by the Federal Executive. Its functions include the administration and legal representation of the CFE, as well as the execution of agreements made by the Board.
The Board of Directors will be responsible for defining policies, strategic direction, and approving development and sustainability programs. It will consist of eight members, including heads of various secretariats and two independent directors.
Special Regime
A special regime will apply regarding i) subsidiary companies, ii) remuneration, iii) acquisitions, iv) assets, v) administrative responsibilities, vi) budget, vii) debt, and viii) sustainability, of which the following is noteworthy:
Oversight and Audit
The oversight and audit of the CFE and its subsidiaries will be carried out by an Audit Committee, Internal Audit, and External Audit.
Transparency and Accountability
It will be subject to transparency and access-to-information laws. Thus, it must publish information regarding its financial, administrative, operational, economic, and legal status.
Dispute Resolution
Disputes will be addressed by Federal Courts; however, the CFE may opt for alternative dispute resolution methods and agree to the application of foreign law for matters outside of Mexico.
Purpose
The purpose of the Law of the State-owned Company, Petroleos Mexicanos (“PEMEX Law”), is to regulate the administration, functioning, operation, control, evaluation and accountability of PEMEX, as a State Public Entity, as well as to establish its special regime.
Among other matters, it is established that the purpose of PEMEX will be the development of exploration, extraction, import, export and transformation of hydrocarbons, as well as the storage, commercialization, formulation, transportation, distribution and sale of hydrocarbons and their derivatives, as well as the development of activities related to energy sources other than those derived from hydrocarbons, in order to preserve the sovereignty, security, sustainability, self-sufficiency and energy justice of the Mexican Nation.
Legal Nature
One of the main changes introduced by this reform is the modification of the legal regime of PEMEX, from being a “State Productive Company” to become a “State-owned Company”. As such, it will be part of the Federal Public Administration, specifically, of SENER; however, it will have technical, operational and management independence, legal personality, special regime and its own patrimony.
Structure
In terms of governance, the new law proposes a restructuring of PEMEX´s management and supervisory bodies. It is foreseen that PEMEX will be managed by a Board of Directors and General Directorate.
In order to fulfill its purpose, the Board of Directors will have the following Committees: Audit; Human Resources; Remuneration and Austerity; Strategy and Investments; Acquisitions, Leasing, Services and Works; Subsidiary Companies; and Sustainability.
Special Regime
Finally, a special regime is established for subsidiaries: compensation and austerity; acquisitions; leasing; services and works; assets; administrative responsibilities; budget and accounting; debt; and sustainability, which are summarized below.
It is established that PEMEX must directly perform hydrocarbon exploration and extraction activities. However, it may perform other activities and services directly, through subsidiaries, companies in which it has a minority interest, directly or indirectly, or through any type of association or alliance that is not contrary to the PEMEX Law.
PEMEX will have a special compensation regime. In addition, it must implement austerity guidelines on the expenditure and use of resources, without detriment to the efficiency of its operation, in accordance with the provisions approved by the Board of Directors, which will allow it to generate savings and improve its financial balance.
It is established that the acquisitions, leases, services and works required will be carried out in terms of Article 134 of the Constitution, subject to the principles of economy, effectiveness, efficiency, impartiality and honesty, in order to ensure the State the best conditions available in terms of price, quality, financing, opportunity and other relevant circumstances in accordance with the nature of the contract.
Significantly, the provisions established in the PEMEX Law and others derived from it will be applicable, and therefore the Public Sector Procurement, Leasing and Services Law and the Public Works and Related Services Law will not be applicable.
It is established that all acts related to the disposition, use and enjoyment of PEMEX´s assets will be governed by common legislation. Likewise, it is established that the real estate assets of PEMEX will be subject to the public domain regime of the Federation in accordance with the provisions of the General Law of National Assets and the PEMEX Law itself.
The General Law of Administrative Responsibilities will be applied to the personnel of PEMEX, through its Responsibilities Unit.
PEMEX will have budgetary autonomy and will be subject only to the financial balance and the ceiling for personal services expenses that, upon proposal of the SHCP, the Chamber of Deputies approves, as well as to the special regime in budgetary matters.
Among other issues, it is expected that:
It reinforces PEMEX's commitment to the protection of the environment, the health of the communities near its operations, and social welfare. Among other issues, it must have mechanisms for the evaluation and mitigation of environmental impacts derived from its activities.
Purpose
The enactment of the Energy Planning and Transition Law ("LPTE") aims to ensure that national energy planning is conceived from the outset with the goal of transitioning towards a cleaner and decarbonized energy sector, without ever compromising energy security and justice, nor the competitiveness of productive sectors. To achieve this, it promotes the development and use of clean energy.
Scope
The primary objectives and scope of the LPTE are:
The LPTE extends the scope of the Energy Transition Law by including binding planning for the entire sector, thereby strengthening the energy transition from its conception and planning.
A distinction is made between renewable energies and clean energies, requiring the latter to demonstrate measurable and verifiable efficiency through sustainability certification processes.
Furthermore, sector planning will include the concept of "externalities," understood as the total cost of the damages and benefits generated by a good or service in economic, social, environmental, and health terms, differentiating it from the price directly paid for its production and consumption. This will allow greater traceability within the sector and strengthen the exercise of collective rights in social, environmental, and indigenous areas.
All of the above is framed within international commitments related to climate change, with a special focus on reducing greenhouse gas emissions.
Authorities
SENER will be responsible for binding sectoral planning, considering the participation of the government, regulatory bodies, companies, and the public, with the aim to:
National planning will be centralized through the Energy Planning Council, which, through three plans[4] and three programs[5], will define policies, approaches, and priority actions within the sector.
The rules, permits, authorizations, and infrastructure projects must align with these instruments, which will be guiding and binding for energy policy.
As part of this framework, SENER will publish the National Energy Balance annually, a publicly accessible document containing detailed information about sector participants.
Strategic Pillars for the Energy Transition
Energy efficiency is established as a strategic pillar within the energy transition. To achieve this:
Excellence certificates in energy efficiency will be issued, which will allow the market valuation of products.
SENER will be responsible for administering and allocating resources to the following funds:
These funds aim to eliminate energy inequality and poverty, ensuring equitable access to sustainable energy sources.
SENER will also allocate resources to scientific research projects, technological development, and innovation, focusing on hydrocarbon efficiency, renewable energy, and clean technologies.
The law seeks to foster the growth of clean energies through the implementation of a carbon market, via new regulations for CEL. This system will establish measurable and transparent criteria to recognize and encourage the generation of clean energy.
a) The methodology issued by the CNE must consider the use of backup and essential additional services for the operation of clean energies within the National Electric System. These services, provided by fossil sources, must take into account the annual operational data of the system.
b) A Public Register of CEL will be created, which must include the registration of each certificate, along with the corresponding information regarding its issue date and ownership history.
c) The operation of the register must allow individuals to perform legal acts related to the buying, selling, pledging, or other operations involving the transfer of ownership, whether real, virtual, or legal.
d) The CNE must issue or update the provisions related to the operation of the certificate register.
e) CELs will have a validity of 30 months and must be reported or acquired during the first quarter of each year.
SENER will set a minimum participation target for clean energies in electricity generation, aligned with the long-term goals established in the General Climate Change Law.
Additionally, the initiative contemplates sanctions for non-compliance with energy efficiency obligations, which will be enforced by the Federal Consumer Protection Agency (“PROFECO”).
Relevant Transitional Provisions
|
Action/Deadline |
Description |
|
Effective Date of the Law: |
The law will come into effect the day after its publication in the DOF. |
|
Repeal of the Law: |
The Energy Transition Law of 2015 will be repealed. |
|
Regulations: |
The Federal Executive must issue the law’s regulations within 180 days. |
|
Other Relevant Provisions: |
Within 360 days, the following plans and strategies must be issued:
|
Conclusions
Purpose
Unlike the Law for the Promotion and Development of Bioenergy, which included general provisions for the promotion and development of bioenergy, the Biofuels Law establishes a detailed and specific regulatory framework for: (i) production; (ii) import and/or export; (iii) storage; (iv) transportation; (v) commercialization; and (vi) sale of biofuels.
The aim is to drive the energy transition by diversifying the clean energy matrix. This will be achieved through the development of new energy generation technologies and the valorization of organic waste within a circular economy policy framework.
Scope
The primary objective of the Biofuels Law is to regulate and promote the sustainable development of biofuels in Mexico by:
Biofuels
As part of energy planning actions, a key pillar for reducing fossil fuel dependency is the diversification of the energy matrix. Therefore, the Biofuels Law aims to incentivize the production and use of biofuels, such as:
|
Category |
Description |
Example |
|
Biomass |
Renewable organic material whose energy content can be utilized as biofuel. |
Agricultural, forestry, and other organic waste. |
|
Liquid Biofuels |
Bioethanol produced from crops such as sugarcane and sorghum, not primarily intended for human consumption. |
Biodiesel, produced from vegetable oils and animal fats. |
|
Gaseous Biofuels |
Biogas generated from the anaerobic decomposition of organic waste. |
Biomethane, refined from biogas to be used as a substitute for natural gas. |
|
Solid Biofuels |
Biomass transformed into solid forms for use as biofuel. |
Biomass pellets, wood waste briquettes, and other organic materials. |
|
Advanced Fuels |
Biofuels designed to reduce emissions in aviation. |
Green diesel, produced from biomass and organic waste, with similar characteristics to fossil diesel. |
|
Other Biofuels |
Non-conventional biofuels, produced from biomass through biological or thermochemical processes. |
Biohydrogen, produced from biomass via biological or thermochemical processes. |
Authorities
The new regulatory framework establishes and delineates the responsibilities of various authorities based on their scope of action:
|
SENER |
Ministry of Environment and Natural Resources ("SEMARNAT") |
Ministry of Agriculture and Rural Development ("SADER") |
|
Responsible for formulating and coordinating national policy on biofuels, in addition to granting permits and setting production goals. |
Responsible for the policy on the use of organic waste and the treatment of wastewater for biofuel production. |
Promotes the production of biomass on marginal soils and the use of agricultural waste |
|
Will issue permits for: |
Will issue permits for: |
Will issue permits for: |
|
Production of Biofuels. |
Utilization and Valorization of Organic Waste. |
Biomass Production for Biofuels (specifically from sugarcane and sorghum)[6]. |
|
Import and Export of Biofuels. |
Environmental Impact Assessment. |
Planting Notices. |
|
Storage of Biofuels. |
Permits for the construction and operation of facilities. |
National Agricultural Registry. |
|
Transport of Biofuels (including pipelines). |
Industrial and Operational Safety. |
|
|
Commercialization of Biofuels. |
Environmental Reports. |
|
|
Distribution of Biofuels[7]. Sale of biofuels to the public. |
Land Use Change in Forested Areas. |
Other Elements
The new Law also seeks to implement tax, financial, and market incentive programs to foster the production and use of biofuels.
These measures are aimed at making projects in this sector attractive to green and sustainable financing.
Finally, disputes arising from biomass transactions will be resolved through the National Arbitration Service, in accordance with Article 184 of the Sustainable Rural Development Law.
Additionally, disputes between those involved in biofuels production, import, export, storage, marketing, distribution, and sale to the public, and consumers, must be resolved in accordance with the applicable provisions of the Federal Consumer Protection Law.
This could lead to jurisdictional conflicts in the application of the Biofuels Law, potentially affecting the development of the biofuels sector.
Relevant Transitional Provisions
|
Action/Deadline |
Description |
|
Entry into force of the law |
The law will enter into force the day after its publication in the Official Gazette of the Federation. |
|
Repeal of the previous law |
The Law for the Promotion and Development of Bioenergy of 2008 will be repealed. |
|
Permits and logbook formats |
• SENER will issue the permit format within 180 days. • SENER will issue the logbook format within 180 days. |
|
Other relevant provisions |
Within 360 days, the issuance of the following programs: • Program to promote the direct use of biomass as biofuels, biofuels production, and sustainable use. • Program to promote the utilization and valorization of organic waste and wastewater treatment for direct biofuel use. • Program to promote sustainable biomass production from marginal lands or the use of agro-industrial waste. |
Conclusions
Purpose
The purpose of the Geothermal Energy Law initiative is to regulate the exploration and exploitation of geothermal resources for the sustainable use of underground thermal energy, with the aim of generating electricity or directing it to other uses.
This law replaces the 2014 Geothermal Energy Law, introducing key changes, including: (i) promoting and streamlining the regulatory framework to facilitate activities; and (ii) emphasizing the sustainable use of underground thermal energy, with a broader focus on sustainability and environmental protection.
The Geothermal Energy Law reiterates that the activities contemplated therein have preferential status over any other use or exploitation of the subsoil, except for the hydrocarbons industry, which maintains priority.
The initiative encourages the use of geothermal energy as a renewable energy source, which will diversify the country's energy matrix and reduce dependence on fossil fuels, thus contributing to the energy transition.
Obligations for Licensees and Concessionaires
New obligations for licensees and concessionaires in terms of sustainability are established, which include:
Furthermore, the Geothermal Energy Law initiative sets forth a clearer and more detailed regulatory framework than the previous one, ensuring that the exploration and exploitation of geothermal resources are carried out with an environmental protection approach.
Permits and Activities
The permits and activities outlined in the Geothermal Energy Law, for which SENER has authority, are as follows:
|
Type of Permit |
Description |
Duration |
|
Exploration Permit |
Allows the conduct of exploration activities to determine the presence of geothermal resources and define the geothermal area. |
Four years, renewable for three more years. |
|
Permit for Diverse Uses |
Allows the exploitation of geothermal resources for uses other than electricity generation, such as urban heating, drying agricultural products, balneology, etc. |
Temporary, depending on the purpose of the permit. |
|
Exploitation Concession |
Grants rights for the exploitation of geothermal resources in a defined geothermal area. |
Thirty years, renewable. |
|
Exempt Geothermal Use Notice |
Allows the utilization of geothermal resources for small-scale uses without the need for a permit, but with registration of the activity at the Ministry. |
Not applicable (no specific duration). |
|
Reallocation |
Allows the reallocation of geothermal areas granted to new holders in case of decreased technical, financial, or legal capabilities of the original concessionaire. |
Not applicable (depending on conditions). |
Authorities
In addition, SENER will coordinate its actions with other authorities to ensure environmental protection, including:
These permits and concessions are designed to ensure that geothermal exploration and exploitation activities are carried out in an orderly, safe, and sustainable manner, promoting the development of geothermal energy in Mexico.
Relevant Transitional Provisions
|
Action |
Description |
|
Entry into force of the law |
The law will enter into force the day after its publication in the Official Federal Gazette. |
|
Repeal of the previous law |
The 2014 Geothermal Energy Law will be repealed. |
|
Regulation: |
Issuance of the Regulations within the following 180 days. |
|
Other relevant provisions |
CFE must request an extension for areas where geothermal activities are conducted within the following 360 days. |
Conclusions
Our team of specialists in each area is at your disposal to provide you with legal services tailored to your needs and to answer any questions you may have regarding this newsletter.
This newsletter was prepared by José Antonio Postigo Uribe ([email protected]), Georgina Gutiérrez Barbosa ([email protected]), Guillermo Villaseñor Tadeo ([email protected]), Max Ernesto Hernández Ernult, ([email protected]), Mauricio Alejandro León Alvarado ([email protected]) Tania Elizabeth Trejo Gálvez ([email protected]) Malcolm Hemmer Rebolledo ([email protected]), Enrique Cruz Lozano ([email protected]), Pablo Chévez Gallegos ([email protected]) and Grecia Farfán Ureña. ([email protected]).
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[1] Prevalence: preference of the State over private parties in the generation and commercialization activities, since it is responsible for guaranteeing the reliability, security, continuity and accessibility of the public electricity service. Binding planning shall guarantee the preference of the State in the referred activities, to provide the people of the United Mexican States with electricity at the lowest possible price.
[2] Economic Load Dispatch: process by which generation, controllable demand and storage resources are programmed to meet demand, minimizing their variable production costs and satisfying the operational, reliability and security restrictions of the SEN.
[3] Energy Justice: Actions or Strategies aimed at reducing Energy Poverty, social and gender inequalities in the use of energy and promoting regional development and shared prosperity through access to reliable, affordable, safe and clean energy and energy infrastructure to meet basic needs, reducing impacts on health and environment.
[4] Electricity Sector Development Plan; Hydrocarbons Sector Development Plan; and Energy Transition Plan.
[5] Clean Energy Program; Energy Efficiency Program; and Energy Infrastructure Development Program
[6] These permits will only be granted when there are surplus inventories of sufficient domestic production to meet national consumption.
[7] In the case of aircraft, it may only be carried out by air carriers, air operators, and non-aeronautical third parties.
