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Idheas Litigio Estratégico v Centro Nacional de Control de Energía (CENACE) and Secretaría de Energía (SENER) - judgment

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Idheas Litigio Estratégico v Centro Nacional de Control de Energía (CENACE) and Secretaría de Energía (SENER) - decision

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In August 12, 2021, the Mexican Center for Environmental Law (CEMDA) and Greenpeace challenged a series of regulations that involved the setting of tariffs for renewable energy projects under legacy contracts. By an order of the District Court, the suit was divided in multiple trials due to the number and scope of the different regulations that were challenged.  Among them, the plaintiffs challenged the Agreement and its Annex to guarantee the efficiency, quality, reliability, continuity, and security of the National Electric System in light of the SARS-CoV2 (COVID 19) pandemic, emitted by the National Center for Energy Control (CENACE). The Agreement established that that the intermittency of renewable energy projects jeopardized the reliability of the National Electric System. As such, it ordered CENACE to limit the operation of intermittent energy projects and to suspend and reject pre-operational trials of intermittent wind and photovoltaic power plants in the process of commercial operation.

The plaintiffs considered that the Agreement violated the right to a healthy environment, enshrined in the Mexican Constitution, since it prevented the participation of renewable energy projects in the electric market which would lead to an increase in GHG emissions which contribute to climate change. Plaintiffs also argued that the Agreement prevents achieving an energy transition, as well as Mexico’s international commitments to address climate change since it imposes restrictions on renewable energy projects.  

On April 19, 2021, the Second District Court in Administrative Matters Specialized in Antitrust, Broadcasting and Telecommunications ruled in favor of the plaintiffs, concluding that CENACE did not have the authority to emit the Agreement and that it transgressed the individual and collective dimensions of the right to a healthy environment enshrined in the Constitution and several international treaties. On one hand, more GHG emissions would have an impact on human health. On the other hand, the court considered that the Agreement would prevent Mexico from fulfilling its commitments under the Paris Agreement, Kyoto Protocol and United Nations Framework Convention on Climate Change since it limited privileged electricity generated by fossil fuels over renewable energy projects. Thus, even if there was no certainty of the degree of the risk or harm that the Agreement would cause, a proper application of the precautionary principle demands that the regulation is struck down.  The Court also emphasized that in these cases, there is a reversal of the burden of proof, which forced authorities to prove that the Agreement would not cause any environmental damage. Finally, the court considered that the Agreement was contrary to the progressive nature of environmental protection envisaged by the Mexican legal system, which limited the possibility of unjustifiably reducing or modifying any already achieved level of protection. This was the case since the 2015 the Energy Transition Act orders authorities to set goals so that electricity consumption is increasingly satisfied by economically viable clean energy sources. The Act orders a minimum of 25% of the demand for electricity satisfied by clean energy sources by 2018; 30% by 2021, and 35% by 2024. 

The authorities appealed the decision but the First Circuit Court in Administrative Matters Specialized in Antitrust, Broadcasting and Telecommunications dismissed the appeal. 

On November 4, 2021, the First Circuit Collegiate Tribunal, who heard the appeal, decided to reverse the Court's decision and dismiss the case. 

The Tribunal decided this because on March 4, 2021 CENACE declared the challenged agreement and the policy null and void. The National Center of Energy Control determined to leave such regulations null and void, in compliance with a different amparo trial, where the Judge in that case considered that these regulations were unconstitutional for violating the right to economic competition. Therefore, the present case was dismissed, because the challenged regulations ceased to have effect. 

Idheas Litigio Estratégico v Centro Nacional de Control de Energía (CENACE) and Secretaría de Energía (SENER)

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Actions to adapt human health, healthcare systems and well-being to climate change.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Actions or measures to adapt freshwater systems to climate change.

Electricity generation from devices driven by the movement of salt water, differences in saltwater temperatures, or salinity gradients.

This sector involves managing waste treatment, sanitation, pollution control and environmental cleanup.

Electrical energy generated from mechanical devices driven by flowing fresh water.

Production of electricity and heat from solar irradiation.

This sector involves the distribution, treatment, and conservation of water resources.

This sector provides communication services, software development, and IT solutions.

This sector involves activities to move goods and people, alongside the storage of products.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

This sector involves the wholesale and retail selling of goods.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Using laws and the legal system more broadly to protect vulnerable entities

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Heat extracted from the ground, usually in the form of hot water or steam and typically referred to as hydrothermal fluid.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Any substance with chemical properties that can cause physical harm to people or damage the environment, including ammonia, carbon monoxide, phosphine, chlorine, arsenic, cadmium, mercury, pesticides, dioxins, microplastics, benzene, asbestos, aflatoxins, fluoride, methanol, and toxins from marine sources.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Kinetic energy of airflow transformed into useful energy, mostly electrical energy.

A company that is owned wholly or partially by the state, typically operating in key sectors.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Idheas Litigio Estratégico v Centro Nacional de Control de Energía (CENACE) and Secretaría de Energía (SENER) - judgment

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance