On February 4, 2025, Mexican President Claudia Sheinbaum submitted a bill to the Mexican Senate to revoke, issue, and amend various energy laws in accordance with the constitutional amendments passed in December 2024. This is part of her administration’s “Plan México” announced on January 13, 2025.
The bill was passed by the Senate on February 27 and by the House on March 12, the bill is on hold to be published in the Mexican Federal Register in order for the laws to become effective. This collection of legislative actions is consistent with the plan to streamline governmental processes that the current administration will be implementing in the upcoming years. This means that even though we do not know the specific content of the new laws, we could expect a completely new system of governmental processes that should differ from the currently used administrative methodology to obtain energy-related permits or any publicly related matter for the sector. The bill’s key point consist in strengthening the Electricity Commission (CFE) and PEMEX, designating them as State-Owned Entities (SOE) and consolidating their legal status as an SOE.
From this, the primary changes to the current Mexican legal framework consist in expediting eight (8) new secondary laws and the amendment of two (2) more to merge their content with the already passed constitutional amendments:
- Law of SOE PEMEX and Law of SOE CFE: In order to eliminate monopolistic practices, protect energy sovereignty, and to embed the “energy justice concept” within the development of the new Mexican energy model, both PEMEX and CFE will change their legal status from productive state enterprises to public enterprises.
This change is aimed at establishing the basis for more efficient delivery of public services, favoring efficient use of energy (electricity and hydrocarbons) over economic interest and commercial speculation.
- Biofuels Law: This law is created as a legal framework for the regulation of the production, storage, transportation, commercialization, import, export, distribution, and other commercial operations within the biofuels production chain that factor in its valuation. As part of this law, the authority of the Ministries of Energy, Environmental, and Agriculture are expanded to include research and development of technologies that allow for the greater use of animal and vegetable residues with which biomass is generated.
- Electricity Sector Law: Repealing the Electricity Industry Law, this provision will govern the generation, transmission, distribution, and supply of electricity and the issuance of authorizations by the Ministry of Energy (SENER). This change will ensure that at least 54% of the annual average of supply of electricity to the grid is provided by state-owned companies.
Likewise, it establishes participation by privately-owned parties in the generation of electricity, individually or jointly, with CFE related to distributed generation or for the wholesale market, self-consumption, or cogeneration. The law also provides for self-consumption permits for electric generation plants between 0.7 MW and 20 MW as long as they are not connected to the national network.
Licenses granted under the repealed law will be allowed to operate under those terms. SENER, however, will promote ways for self-supply and cogeneration companies to implement the new provisions stated in this law.
- National Energy Commission (CNE) Law: Through the authority conferred to the Energy Regulatory Commission and the National Hydrocarbons Commission, the CNE is a decentralized agency of SENER, with technical and operational autonomy, which will have the following functions: (i) Granting licenses for the generation of electricity; (ii) Granting licenses for the transportation, storage, and distribution of petroleum products, natural gas, and liquefied petroleum gas through pipelines; and (iii) Approving tariffs for the transmission, distribution, and basic supply of electricity and hydrocarbons.
The CNE will be led by a central board and a technical committee which will jointly adopt decisions.
- Planning and Energy Transition Law: To guarantee equitable access to reliable, safe, and clean energy by the entire population, this law regulates the implementation of plans to improve the infrastructure of the energy sector, in order to expand electricity coverage to vulnerable populations. This objective will be led, promoted, and supervised by the Energy Planning Board.
- Hydrocarbons Sector Law: By repealing the Hydrocarbons Law, this regulation intends to promote self-sufficiency in the hydrocarbons sector and specifies the way which private parties may participate in the exploration and extraction of hydrocarbons. PEMEX will choose the allocations and maintain the majority participation in these arrangements.
Additionally, it outlines the permits granted and supervised by SENER and the CNE regarding activities involving oil, petroleum products, petrochemicals, and natural gas.
- Geothermal Law: As in the case of the new biofuels regulation, this regulation is also based on energy planning, strategic generation, and distribution for social purposes. It establishes a regulatory framework that will govern permits and usage, innovation in financing, exploration, and production of geothermal energy.
- Other amendments: The final legal changes proposed by the bill can be divided into two main points: Mexico’s Petroleum Fund Law will now be adjusted in accordance to the public company status of PEMEX, along with the new regulations, and; the granting of powers to the new energy authorities to consolidate a true self-sufficient supply of energy. Both of these validate the new public administration regime which aims to reach energy sovereignty and provide a new market for private companies.
