Can The Corn Ethanol Lobby Win In Mexico, Too?

Taking advantage of major changes to the country’s energy policies, the U.S. corn ethanol gang has been pushing to implement a 10% content mandate in Mexico, too. Thus far, the efforts have been negative-to-mixed, but the debate is not settled.

When Mexico City was declared the world's most polluted city in by the World Health Organization in 1993, the Mexican government moved quickly to introduce oxygenates into the country's gasoline. Mexico's new fuel standards and other regulatory actions were an immediate and dramatic success, helping to produce significant reductions in carbon monoxide, particulates and ozone levels over the next several years. While Mexico's standards allowed the use of up to 5.8% ethanol (E-6) in gasoline, there was no mandate for its use, and it was never utilized. The country's impressive results in cleaning up its air quality were achieved largely through the use of MTBE.

When the Mexican government began to enact its recent energy reforms, the corn ethanol lobby jumped in, pushing the country's energy regulatory commission (CRE) hard for implementation of an E-10 mandate. After more than a year's deliberation, in December 2016, the CRE initially reconfirmed the pre-existing policies allowing E-6 (but not mandating it) in rural areas, but banned its use in the country's three large metro areas, including Mexico City, Monterrey and Guadalajara. In issuing its decision, CRE's Chairman Guillermo Ignacio Garcia Alcocer cited both the Worldwide Fuels Charter, which recommends the use of MTBE for fuels oxygenation rather than ethanol, and a 2010 EPA report titled "Evaporative Emissions From In-Use Vehicles: Test Fleet Expansion," which cites the potential for ethanol to actually increase ozone levels. It appeared that a commitment to science and air quality would rule the day.

Rather than go back to the U.S. licking its wounds, the ethanol industry redoubled its lobbying efforts, and in June of this year, with no stakeholder consultation or real explanation, CRE reversed its decision on the rural areas, and will now allow the use of E-10 in large swaths of the country, though it stopped short of a mandate. Opponents of the decision filed suit shortly after, and on September 13, a Mexican federal judge issued an injunction preventing the new policy from taking effect pending further appeals. READ MORE