Mexico is advancing a national biofuels strategy through new regulatory frameworks, technical collaboration and industry engagement, positioning the sector as a component of energy transition policy while state-owned Pemex faces operational and financial pressures.
Under technical assistance from the Inter-American Development Bank (IDB) and Iniciativa Climática de México (ICM), SEMARNAT is developing participatory workshops to design a program focused on the use and valorization of organic waste and wastewater for biofuel production. The initiative is part of the implementation of the Biofuels Law and the Circular Economy Law, aimed at promoting renewable energy, waste utilization and technological development.
The Biofuels Law, published in March 2025, establishes principles of energy diversification, sustainable management of organic waste and the strengthening of value chains through production, storage, transport, commercialization and trade. Authorities said the regulatory framework is aligned with national circular economy and waste policies to scale the sector.
Germán Ruiz, Director General of Sustainable Urban Environmental Promotion, SEMARNAT, said the alignment of policies “will allow the strengthening of value chains” and support the development of the sector. He added that the Circular Economy Law will enable the gradual implementation of extended producer responsibility to catalyze investment and technology adoption.
Mexico generates approximately 139,000t of urban solid waste, with nearly 50% classified as organic and with low levels of energy utilization, according to preliminary data from the Basic Diagnosis for Integrated Waste Management. Authorities see this as a key opportunity to expand biofuel production.
The policy is part of the federal government’s broader industrial strategy under Plan México, which includes investment in Circular Economy Development Poles for Well-Being (PODECIBIS) to support energy transition and regional development.
At the institutional level, SEMARNAT is working with agencies including the National Energy Commission (CNE), the Ministry of Energy (SENER), the Ministry of Agriculture and Rural Development (SADER), the National Institute of Ecology and Climate Change (INECC) and Banobras, alongside private sector representatives.
Parallel discussions at the Senate have reinforced the role of biofuels in Mexico’s energy strategy. At the forum, Biofuels: Strategic Component to Strengthen Energy Sovereignty, participants from government, industry and academia examined technical, regulatory and investment challenges.
During the opening session, officials highlighted that biofuels represent a strategic alternative to move toward a more sustainable energy matrix, reduce emissions, leverage national resources and strengthen energy self-sufficiency.” The Mexican Petroleum Institute (IMP) contributed technical expertise on bioethanol and other fuels.
In a panel on national capacity, experts emphasized the need to assess infrastructure, feedstock availability and operational conditions to expand ethanol use in gasoline. They noted that Mexico has “relevant opportunities” to develop bioethanol if strategies are based on technical evidence, innovation and long-term planning.
PEMEX also presented its approach to energy transition, stating that bioethanol is part of its strategy to reduce emissions in the transport sector and diversify energy sources. Industry participants said biofuels could help lower carbon emissions, particularly in segments where electrification remains limited, and highlighted Pemex’s logistics infrastructure as a potential enabler for market integration.
However, development of the sector remains incipient and faces regulatory, investment and scalability challenges. Analysts also noted that Pemex continues to play a central role in national energy policy, despite ongoing constraints.
The company is under pressure from declining hydrocarbon production, which reached approximately 1.63 million barrels per day at the end of 2025, its lowest level in 46 years. PEMEX also faces financial debt exceeding US$100 billion, liquidity constraints and payment delays affecting suppliers and operations.
Additional challenges include a recent oil spill in the Gulf of Mexico, caused by a pipeline leak near the Cantarell platform. The incident, which began in February 2026, generated a crude oil slick covering more than 300km2 and impacted coastal areas in Tabasco and Veracruz, affecting fishing communities and ecosystems.
Amid these conditions, the government is also exploring international cooperation. President Claudia Sheinbaum said PEMEX and Brazil’s Petrobras are in talks to share technology in oil production and biofuels, including biodiesel and ethanol. She noted that discussions remain at an evaluation stage with no formal agreements