Feature: Mexican Ethanol Blending Faces Legal Hurdles Following Injunction

Business News/Analysis, Marketing/Market Forces and Sales, Mexico, Opinions, Policy

October 24, 2017

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by Josh Pedrick and Silvia Struthers (Platts) A future that once looked rosy for climbing ethanol blends with gasoline in Mexico could be in jeopardy as legal challenges to a new fuel regulation have found traction in court.

A Mexican federal judge has issued an injunction against raising the amount of ethanol in gasoline sold in most of the country after a lawsuit was introduced arguing the increase will exacerbate air pollution problems, said Juan Machado, a partner in the law firm SOLCARGO and the attorney leading the case. The lawsuit also argues expert and environmental entities’ opinions were not taken into account, Machado said in an interview with S&P Global Platts.

“The increase of ethanol in gasoline will produce a counterproductive effect on air quality by increasing the emissions of volatile organic compounds,” said Carlos Del Razo, a plaintiff in the case and an environmental lawyer.

The case was brought by environmental activists, including former Mexican presidential candidate Gabriel Quadri.

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“We are concerned about extending vapor pressure waivers because there are many more cities that present problems of tropospheric ozone and poor air quality, even much more serious problems than Mexico City,” Del Razo said about the measure.

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Mexico uses MTBE as its primary oxygenate in gasoline, which is why ethanol has not been a consideration.

The injunction says ethanol blending has to remain at 5.8% while the case is decided, which could take more than a year, according to Machado.

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Del Razo said ethanol’s effects on the environment could be more negative than in the US as Mexico’s gasoline specification is different.

“The CRE claims to use the American model, but that is a half-truth — in the US they have conventional and reformulated gasoline.”

Mexico has its own set of factors in its gasoline that would affect tailpipe emissions if ethanol is added.

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One of the goals of NOM-016 was to align Mexico’s gasoline specifications with those in the US, easing exports from the US into the country. READ MORE

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