Advanced BioFuels USA

by David Alire Garcia and Sharay Angulo (Reuters) The Mexican Supreme Court ruled against the modification of a fuel rule on Wednesday that would have allowed higher ethanol content in gasoline, similar to content rules in the United States, arguing that regulators exceeded their authority.

The court’s decision follows a three-year-old modification of a gasoline regulation by Mexico’s Energy Regulatory Commission, or CRE, which sought to allow up to 10% ethanol in gasoline sales nationwide, excluding in the country’s three biggest cities, where air pollution is a long-standing concern.

The pre-existing fuel rule allows a maximum 5.8% ethanol content.

Backers of the modification, including U.S. ethanol exporters, argued it would result in cleaner air and that the alternative additive MTBE, which is also used to oxygenate fuels, has been known to contaminate underground water supplies.

MTBE is banned in most of the United States, and besides national oil company Pemex, which produces the additive, other producers like Rotterdam-based LyondellBasell have sought to protect their market share in Mexico.

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The court described the CRE’s modified fuel rule as “unilateral,” called for a more rigorous science-based evaluation of higher ethanol content and even cited the risk of more air pollution under the regulation.

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Backers of ethanol like AMMS argue that Mexican sugar cane and sorgum farmers stand to benefit if 10% ethanol gasoline is permitted, as both commodities can be used to make it. READ MORE

US ethanol market unfazed by Mexican court ruling (S&P Global Platts)

Mexico rules against higher ethanol content in gasoline (Biofuels International)

Mexico Still Depends on U.S. for Fuel: Fuels Institute report examines the impact of fuel deregulation. (National Association of Convenience Stores)

Excerpt from S&P Global Platts: After the ruling, a trio of ethanol trade groups said they will continue to work with their Mexican counterparts to make the ethanol regulation pass court muster.

“The NOM was struck down not because of the merits of ethanol, but because of arguments against the process to modify the fuel specification,” a statement from the US Grains Council, Growth Energy and the Renewable Fuels Association read. “If there is a silver lining to this decision it would be that the Supreme Court of Justice will allow for the 180-day grace period during which the NOM will remain in place. That still allows the CRE time to rework the specification and permits stakeholders to have a say in the process for enabling 10 percent blends.”

The Mexican Supreme Court Wednesday said Mexico’s energy agency didn’t have the authority to unilaterally change the law. The court also said the agency must take into account more scientific information as possible before making such a regulatory change. READ MORE