On January 22, 2020, the Second Chamber of the Supreme Court of Mexico rendered a decisive judgment, nullifying a governmental agency's action aimed at permitting an elevated ethanol content within gasoline. The Court's ruling was underpinned by a profound consideration of both the precautionary principle and the fundamental right to a healthful environment, which necessitated a thorough assessment of the environmental perils associated with ethanol, notably its role in exacerbating GHG emissions.

In 2017, Mexico's Energy Regulatory Commission (ERC) unilaterally amended the official Mexican standard "NOM-016-CRE-2016" to increase the maximum ethanol percentage as an oxygenate in Magna and Premium gasoline (up to 10% from 5.8%). This modification was intended to be implemented nationwide, with certain exemptions applied to Mexico's three major urban centers, where air pollution concerns loomed large. The Supreme Court invalidated the measure, citing the potential for higher pollution levels with a greater maximum ethanol content, including the potential for increased GHG emissions. 

Acknowledging the potential economic benefits, including reduced fuel costs, the Court conscientiously weighed these economic considerations against Mexico's unwavering commitment to curtailing GHG emissions, in line with its obligations as a signatory to the Paris Agreement. In its definitive stance, the Court asserted that any measure bearing substantial environmental hazards must undergo scrutiny grounded in the most robust scientific knowledge available and must not be enacted without due public participation. In arriving at this determination, the Court invoked the right to public consultation on environmental matters and steadfastly adhered to the precautionary principle. 

Considering the risk to the environment posed by the amended rule, a decision necessarily needed to involve the input of specialized professionals, scientific or technological research institutions, as well as professional associations, which are integral to the so-called "National Consultative Committees for Standardization." Furthermore, citizen participation must be allowed before amending or rescinding such a standard. This inclusion of academic citizens, non-governmental organizations, and the general public affords them the opportunity to express their opinions and have them duly considered when making such decisions. This is because regulatory modifications can impact their human right to a healthy environment. State-level discussions should also be guaranteed within the broader context of the international commitments outlined in the Paris Agreement. This is because climate change can jeopardize the enjoyment of a wide array of human rights, particularly the rights to life, health, food, and water. Therefore, it is considered that any purely economic benefits that may result from increasing the ethanol percentage in gasoline as an oxygenate (presumably lowering the price of such fuels) must be carefully weighed against the potential environmental risks and the state's obligations to reduce GHG emissions (polluting gases) and, consequently, combat the phenomenon of climate change.

Ruling on Modification to Ethanol Fuel Rule

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Ruling on Modification to Ethanol Fuel Rule - opinion

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Ruling on Modification to Ethanol Fuel Rule - opinion

Target

Policy instrument

Risk

Impacted group

Just transition

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance