New Energy Laws

1. Introduction

As a result of the constitutional reforms regarding strategic areas and companies, as well as organizational simplification, which came into effect at the end of 2024, the following new energy laws were published in Mexico on March 18, 2025 (the "New Energy Laws"):¹

1. The Electricity Sector Law (Ley del Sector Eléctrico);
2. The Hydrocarbons Sector Law (Ley del Sector Hidrocarburos);
3. The National Energy Commission Law (Ley de la Comisión Nacional de Energía);
4. The Law of the State-owned Public Company, Federal Electricity Commission (Ley de la Empresa Pública del Estado, Comisión Federal de Electricidad);
5. The Law of the State-owned Public Company, Petróleos Mexicanos (Ley de la Empresa Pública del Estado, Petróleos Mexicanos);
6. The Energy Planning and Transition Law (Ley de Planeación y Transición Energética);
7. The Biofuels Law (Ley de Biocombustibles); and
8. The Geothermal Law (Ley de Geotermia).

1.1. General Aspects of the New Energy Laws

The New Energy Laws aim to increase the control, regulation and supervision of the electricity and hydrocarbons industries by the Mexican State, while also enhancing the participation of the Federal Electricity Commission (Comisión Federal de Electricidad, "CFE") and of Petróleos Mexicanos in such industries, mainly through the following:

• The dissolution of the Energy Regulatory Commission (Comisión Reguladora de Energía, "CRE") and the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos, "CNH") as coordinated regulatory bodies for the electricity and hydrocarbons industries, and the transfer of regulatory powers over these industries to a new National Energy Commission (Comisión Nacional de Energía, "CNE"), which is part of the organizational structure of the Ministry of Energy (Secretaría de Energía, "SENER"), and potentially to SENER itself directly.
• The establishment of binding requirements for the planning of the electricity and hydrocarbons sectors, the introduction of additional conditions to obtain the necessary permits to carry out certain regulated activities, and the expansion of the supervisory powers of the CNE and SENER.
• The granting of prevalence to the CFE in the generation and commercialization of electricity, and the granting to Petróleos Mexicanos of the right to directly obtain allocations for its self-development and mixed-development allocations for conducting hydrocarbon exploration and extraction activities. Additionally, Pemex is granted priority in obtaining capacity reservations in integrated hydrocarbons transportation and storage systems.

It is important to note that, although the New Energy Laws introduce certain significant changes in the electricity and hydrocarbons industries, the Electricity Sector Law (Ley del Sector Eléctrico, "LESE") and the new Hydrocarbons Sector Law (Ley del Sector de Hidrocarburos, "LSH")--which form the core of the New Energy Laws package- are largely based on the text of the now-repealed Electricity Industry Law (Ley de la Industria Eléctrica, "LIE") and the now-repealed Hydrocarbons Law (Ley de Hidrocarburos, "LH"), which regulated the electricity and hydrocarbons industries prior to the publication of the New Energy Laws.

Consequently, in general terms, the LESE and the LSH preserve the framework for the electricity and hydrocarbons industries established by the 2013 Constitutional Energy Reform, including the opportunity for private parties to participate in the activities of the electricity and hydrocarbons value chains under the regulation of the Mexican State.

1.2. Respect for Permits and Agreements in Force; Private Investment Opportunities

The LESE and the LSH establish a regime that respects permits, agreements and, in general, administrative acts entered into or granted prior to their entry into force.
Therefore, the issuance of the New Energy Laws does not limit the possibility of investing in projects in the electricity and hydrocarbons industries developed under the now-repealed LIE and LH. Furthermore, the New Energy Laws create new investment opportunities in these sectors, particularly in electricity generation and transmission, as well as in the exploration and extraction of hydrocarbons. These opportunities include both individual investments and joint ventures with the CFE or with Petróleos Mexicanos, respectively, through one of the schemes set forth in the New Energy Laws, which are described further below.

1.3. Importance of Issuance of Secondary Regulations

Although the New Energy Laws establish the new framework for carrying out activities within the value chain of the electricity and hydrocarbon industries in Mexico, the specific details regarding the implementation of such activities will be outlined in the secondary regulations that will be issued in the coming months.

Therefore, it is advisable to wait for the issuance of these secondary regulations in the coming months before analyzing the impact of this regulatory change on the development of regulated activities.

2. Electricity Sector Law

2.1. General Aspects

The new LESE regulates the generation, storage, transmission, distribution, and commercialization of electricity in Mexico, as well as the planning and control of the national electricity system, the operation of the wholesale electricity market, and the supply of primary inputs for the electricity sector, replacing the now-repealed LIE.

It is important to note that the LESE is based on the text of the now-repealed LIE; therefore, the LESE maintains most of the principles and provisions established in the LIE.

For example, regarding electricity generation, the LESE maintains the possibility for electricity generation to be carried out by the Mexican State or by private parties in modalities such as distributed generation and generation for the wholesale electricity market. Additionally, the LESE opens the possibility for electricity generation to be carried out jointly by the Mexican State and private parties through the mixed investment schemes, and introduces concepts such as self-consumption and cogeneration, which are described in Section 2.2 below.

With respect to electricity transmission and distribution, these activities remain public services that can only be provided by the Mexican government exclusively through the CFE. In terms of the LESE, the CFE may contract and partner with private parties in certain aspects related to these activities, as described in Section 5.2 below.

With respect to the interconnection of power plants and the connection of load centers to the transmission and distribution networks, the LESE maintains the interconnection and connection process under the responsibility of the National Energy Control Center (Centro Nacional de Control de Energía, "CENACE") in terms similar to those established in the LIE.

With respect to the commercialization of electricity, the LESE maintains the figures of Qualified Supply (Suministro Calificado), Basic Supply (Suministro Básico) and Last Resort Supply (Suministro de Último Recurso) as outlined in the LIE. The LESE also establishes that the Basic Supply (Suministro Básico) can only be provided by the Mexican State to ensure that electricity is supplied to Mexican people at the lowest possible price.

The LESE maintains the existence of the Wholesale Electricity Market, allowing generators and traders to engage in transactions for the purchase and sale of electricity, related services, power, transmission financial rights, clean energy certificates, and other products related to electricity.

Finally, it is important to note that the LESE establishes that all permits, contracts and instruments granted under the Public Electricity Service Law (Ley del Servicio Público de Energía Eléctrica) (e.g., legacy projects in independent energy production, self-consumption, cogeneration and small production modalities) and the LIE will remain effective until the end of their term and will be governed by the provisions in force at the time of their execution.

2.2. Relevant Points

We highlight the following points of the LESE:

• Establishment of the Prevalence of the Mexican State in Generation and Commercialization. It is established that the Mexican State has prevalence over private parties in the generation and commercialization of electricity. Regarding electricity generation, the LESE stipulates that the Mexican State must maintain –at a minimum– fifty-four percent of the average energy injected into the grid in a calendar year, as subsequently detailed in the applicable provisions.
• Creation of New Electric Generation Schemes. New schemes for generating electricity between the Mexican State and private parties are introduced, such as the "mixed development" scheme, through which the Mexican State and private parties can jointly develop electric power plants through the following schemes: (i) long-term production; (ii) mixed investment; or (iii) any other scheme defined by the regulations or the provisions to be issued later. In addition, the cogeneration modality is incorporated into electricity generation permits, whereby power plants will have mandatory dispatch in certain particular cases.
• Substitution of the "Isolated Supply" Scheme for Self-Consumption. The "isolated supply" provision in the LIE is replaced by "self-consumption", which involves allocating the production of a power plant with a capacity equal to or greater than 0.7 MW to meet the needs of a person holding a generation permit. This may occur either in the form of interconnected self-consumption (where surplus electricity is injected into the grid and missing electricity is acquired) or in the form of isolated self-consumption. It is anticipated that self-consumption related to power plants with capacities between 0.7 MW and 20 MW may have a simplified procedure for obtaining a generation permit.
• Increase in the Capacity of Exempt Generation Power Plants. The generation capacity of power plants that do not require a generation permit (e.g., Exempt Generators) is increased from 0.5 MW to 0.7 MW. These power plants are primarily used in distributed generation schemes.
• Modifications to the Sale of Energy from an End User to a Third-Party Scheme. The characteristics of the scheme for the sale of energy from an end user to a third-party have been modified. It is now established that the sale can be occur within a particular network² instead of "in the End User's facilities", which –in principle and subject to the secondary regulations to be issued for this purpose– would provide greater flexibility for implementing this scheme.
• New Forms of Product Acquisition by the Basic Services Supplier. The basic services supplier is now allowed to enter into electricity coverage agreements through competitive mechanisms or directly, as opposed to the LIE, which required the basic services supplier to enter into electricity coverage agreements exclusively through medium- and long-term auctions.
• Inclusion of Electricity Storage as a Regulated Activity. The concept of electricity storage is introduced as a regulated activity, with SENER being empowered to establish the terms, conditions, and modalities for the participation of electricity storage systems in the sector.
• Inclusion of Electromobility. The concept of electromobility is introduced and SENER is empowered to establish the criteria for the interconnection of infrastructure, the consideration for the supply of electricity and the terms and conditions for its use in electromobility.
• Social Impact. The characteristics of the social impact assessment for the electricity sector are explained, the process for granting the corresponding authorization is detailed, and penalties for non-compliance with the provisions on social impact are included.

3. Hydrocarbons Sector Law

3.1. General Aspects

The new LSH regulates the activities of recognition and surface exploration, exploration and extraction, treatment and refining of oil, processing of natural gas, as well as the import, export, commercialization, transportation, storage, distribution, and sale of hydrocarbons. It also regulates a new activity in the hydrocarbons value chain called "formulation" of petroleum products.
It is important to note that the LSH is based on the text of the now-repealed LH. Therefore, the LSH maintains most of the principles and provisions from the LH.
In general terms, the LSH maintains the possibility for private parties to participate in the activities of recognition and surface exploration, exploration and extraction, treatment and refining of oil, processing of natural gas, as well as the import, export, commercialization, transportation, storage, distribution, and sale of hydrocarbons, including the formulation of petroleum products, after obtaining the corresponding agreements or permits.

However, there are some changes regarding the participation of private parties in certain activities within the value chain. For example, regarding exploration and extraction activities, the LSH maintains the existence of exploration and extraction agreements; however, such agreements will now be exceptional, as priority will be given to the new types of allocations to Petróleos Mexicanos called allocations for own development and allocations for mixed development, which are explained in the Section 3.2 below.

In addition, the scope of commercialization and distribution activities is modified and the power to directly regulate the exploration and extraction of hydrocarbons and the treatment, refining, transportation, storage and commercialization of crude oil is transferred to SENER.

Finally, it is important to note that the LSH establishes that all allocations and contracts for exploration and extraction, as well as the authorizations and permits granted by SENER, CNH and CRE prior to the LSH becoming effective, will remain in effect under the terms granted.

3.2. Relevant Points

We highlight the following points of the LSH:

• New Allocations for Exploration and Extraction. New types of allocations are created to allow Petróleos Mexicanos to carry out exploration and extraction activities, called allocations for own development and allocations for mixed development. In the allocations for own development, Petróleos Mexicanos can exclusively carry out exploration and extraction activities, notwithstanding that Petróleos Mexicanos is allowed to enter into service agreements with private parties under schemes that allow for greater productivity and profitability. In mixed development allocations, Petróleos Mexicanos can complement its technical, operational, financial or execution capacities by entering into an agreement with one or more private parties. This agreement will establish the participation interest of Petróleos Mexicanos and the private party in the corresponding area (with the understanding that Petróleos Mexicanos must maintain a percentage of participation interest equal to or greater than forty percent), as well as the cooperation obligations and the distribution of risks, among other aspects.
• Granting of Binding Nature to the Planning of the Hydrocarbons Sector. It is established that the planning of the hydrocarbons sector by SENER is binding, and it is anticipated that the granting of authorizations, approvals and permits must be made in accordance with the criteria set out in such binding planning.
• Inclusion of the Formulation of Petroleum Products as a Regulated Activity. It is established that the formulation of petroleum products will be a regulated activity by the CNE. Formulation is defined as the activity of blending petroleum products with additives and biofuels to obtain products that comply with the quality specifications established in the applicable regulations.
• Obligation to Have Volumetric Controls. Permit holders of regulated hydrocarbon activities must comply with volumetric control obligations, which include having the necessary equipment and computer programs to carry out such controls, certificates demonstrating their correct operation and functioning, and reports issued by a testing laboratory.
• Increased Reporting Periodicity. Permit holders of regulated hydrocarbon activities must submit weekly information related to volumetric controls, measurement, quality, and commercial operations carried out with clients and suppliers.
• Priority in the Allocation of Capacity to Petróleos Mexicanos and CFE in Integrated Systems. It is established that Petróleos Mexicanos and CFE have priority in obtaining capacity in integrated hydrocarbon transportation and storage systems, such as the Integrated National Natural Gas Transportation and Storage System, currently operated by the National Natural Gas Control Center.
• Suspension of Regulated Activities. SENER and the CNE have the authority to provisionally suspend the performance of regulated activities when the permit holder does not immediately prove the legal origin of the hydrocarbons, when there is adulteration of the hydrocarbons, when there are indications of practices that favor the illegal market or the smuggling of hydrocarbons, among other cases
• Changes in the Open Access Principle. It is established that Petróleos Mexicanos and CFE are not obligated to provide open access without undue discrimination to their facilities and services of transportation and distribution through pipelines, as well as storage of hydrocarbons, petroleum products, and petrochemicals.
• Social Impact. The characteristics of the social impact statement for the hydrocarbons sector are explained, the process for granting the corresponding authorization is detailed, and sanctions for non-compliance with the provisions on social impact are included.

4. National Energy Commission Law

4.1. General Aspects

The National Energy Commission Law ("CNE Law") regulates the organization and operation of the new National Energy Commission ("CNE") which will replace the CRE and the CNH as the governmental authorities responsible for regulating, supervising and imposing sanctions on most activities within the electricity and hydrocarbons industry value chain.

The regulatory and supervisory powers of the CNE include, mainly, the granting, modification, updating, revocation and termination of permits, authorizations, and other administrative acts necessary for carrying out such activities, as well as the issuance of regulations and general administrative provisions related to these activities and monitoring of their compliance.

As a result of the New Energy Laws, the distribution of powers between the CNE and SENER regarding the regulation, supervision, and imposition of sanctions for regulated activities in electricity and hydrocarbons will be as follows:

4.2. Relevant Points

We highlight the following points of the CNE Law:

• Organizational Structure of the CNE. Unlike the CRE and the CNH, which had a collegiate governing body, the CNE will be headed by a general director who will be freely appointed and removed by the head of the Federal Executive Branch and ratified by the Senate (except for the first General Director, who will be appointed by the head of the Federal Executive Branch without requiring Senate ratification).
• Powers and Functioning of the Technical Committee. Additionally, the CNE will have a Technical Committee composed of: (i) the Secretary of Energy (holding the casting vote), (ii) the Subsecretary of Electricity; (iii) the Subsecretary of Hydrocarbons; (iv) the Head of the Electricity Unit of the CNE; (v) the Head of the Hydrocarbons Unit of the CNE; and (vi) three technical experts from the energy sector. The Technical Committee will be responsible for granting, modifying, updating, revoking, and cancelling permits and authorizations, as well as issuing other administrative acts related to energy activities within the CNE's scope of authority. The Technical Committee shall meet at least once a month.
• Temporary Suspension of Deadlines. In order to facilitate the administrative transition from the CRE and the CNH to the CNE, a suspension of the deadlines applicable to permit applications and other procedures currently being handled by the CRE and the CNH is provided for a period of 90 calendar days.

5. Law of the State-owned Public Company, Federal Electricity Commission (Comisión Federal de Electricidad)

5.1. General Aspects

The Law of the State-owned Public Company, Federal Electricity Commission ("New CFE Law") regulates the organization, administration, functioning, operation, control, evaluation and accountability of the CFE in its new capacity as a public company of the Mexican State.

In line with the new vision of the Mexican electricity sector, the New CFE Law provides that the purpose of the CFE will be to procure energy justice for the people of Mexico and ensure the sustainable development of the activities such as generation, storage, transmission, distribution, commercialization, and supply of electricity, as well as to contribute to the provision of internet and telecommunications services with the Mexican State.

In general terms, CFE maintains its special regime regarding subsidiaries, remuneration and austerity, procurement and leasing, services and works, assets, administrative responsibilities of its personnel, budget and accounting, debt, and sustainability, with the particularities mentioned in Section 5.2 below.
It is important to note that the New CFE Law provides that contracts, agreements, trusts and other legal acts entered into by the CFE with any individuals or legal entities, whether domestic or foreign, that were entered into or granted prior to the entry into force of the New CFE Law, will be respected in the terms agreed upon. The payment obligations and guarantees granted by the CFE in Mexico and abroad will also be respected.

5.2. Relevant Points

We highlight the following points of the New CFE Law:

• Legal Nature of the CFE. The CFE ceases to be a productive company of the Mexican State and becomes an entity of the federal public administration under SENER, with its own legal personality and assets, and technical, operational and management independence.
• Vertical Integration and Disappearance of Subsidiary Production Companies. It is anticipated that CFE must carry out transmission, distribution, commercialization, and basic supply activities directly, for which purpose the subsidiary production companies that carried out such activities will disappear. The rights and obligations of the subsidiary production companies under agreements, contracts, trusts and other legal acts entered into by them will be assumed by the CFE by operation of law, without the need for any procedure and respecting the terms under which they were agreed.
• Subsidiaries of CFE. The possibility for CFE to have subsidiaries to carry out, among others, the activities of electricity generation or the provision of telecommunications services is maintained. CFE's subsidiary companies continue to have the legal nature and organization in accordance with the private law of the place of their incorporation. For this purpose, a Subsidiary Companies Committee is created within CFE's board of directors, whose main function is to advise the board of directors on the creation, merger or spin-off of subsidiaries.
• Agreements and Alliances with Private Parties. It is maintained that CFE may enter into contracts, agreements, alliances, associations or any other legal act with individuals or legal entities from the private sector. In addition, it is maintained that CFE may enter into agreements under mixed development schemes (CFE-private party) that allow CFE to expand its services, including modalities that allow them to partner and/or share costs, expenses, investments, risks and other aspects of the activities of which it is the owner.
• Participation of Private Parties in Electric Power Transmission and Distribution Activities. The New CFE Law provides that CFE must carry out the activities of transmission and distribution of electric energy directly. However, for such purposes, CFE may:
  • Enter into agreements with its subsidiaries or with private parties to carry out, among other things, the installation, maintenance, and expansion of the infrastructure necessary to provide such services; and
  • Enter into partnerships or alliances with third parties through the creation of or participation in subsidiary companies, through minority participation in other companies, or through any other form of association that is not contrary to the law.

6. Law of the State-owned Public Company, Petróleos Mexicanos

6.1. General Aspects

The new Law of the State-owned Public Company, Petróleos Mexicanos ("New Law of Petróleos Mexicanos") regulates the organization, administration, functioning, operation, control, evaluation and accountability of Petróleos Mexicanos in its new capacity as a public company of the Mexican State.

In line with the new vision of the hydrocarbons sector, the New Law of Petróleos Mexicanos provides that the purpose of Petróleos Mexicanos is to carry out activities across the hydrocarbons value chain in order to preserve the sovereignty, security, sustainability, self-sufficiency and energy justice of the Nation.

In general terms, Petróleos Mexicanos maintains its special regime regarding subsidiaries, compensation and austerity, acquisitions and leasing, services and works, assets, administrative responsibilities of its personnel, budget and accounting, debt, and sustainability, with the particularities mentioned in Section 6.2 below.

It is important to note that the New Law of Petróleos Mexicanos provides that contracts, agreements, trusts and other legal acts entered into by Petróleos Mexicanos with any individuals or legal entities, whether domestic or foreign, prior to the entry into force of the New Law of Petróleos Mexicanos, will be respected in the terms agreed upon. The payment obligations and guarantees granted by Petróleos Mexicanos in Mexico and abroad will also be respected.

6.2. Relevant Points

We highlight the following points of the New Petróleos Mexicanos Law:

• Legal Nature of Petróleos Mexicanos. Petróleos Mexicanos ceases to be a production company of the Mexican State and becomes an entity of the federal public administration under SENER, with its own legal personality and assets, and technical, operational and management independence.
• Agreements and Alliances with Private Parties. It is maintained that Petróleos Mexicanos and its subsidiaries may enter into contracts, agreements, alliances, partnerships or any legal act with individuals or legal entities from the private sector. In addition, it is maintained that Petróleos Mexicanos may enter into agreements under mixed development schemes that allow Petróleos Mexicanos to associate or share costs, expenses, investments, risks and other aspects of the activities of which it is the owner, under the terms of the applicable laws.
• Vertical Integration and Disappearance of Subsidiary Production Companies. The following production subsidiaries of Petróleos Mexicanos are expected to disappear: Pemex Exploración y Producción (PEP), Pemex Transformación Industrial (PTRI), and Pemex Logística (PLOG). The rights and obligations of such subsidiary production companies under agreements, contracts, trusts and other legal acts entered into by such companies will be assumed by Petróleos Mexicanos by operation of law, without the need for any procedure, and respecting the terms under which they were agreed
• Subsidiaries of Petróleos Mexicanos. The possibility for Petróleos Mexicanos to have subsidiaries to carry out all the activities of the hydrocarbons value chain, with the exception of exploration and extraction, is maintained. The subsidiary companies of Petróleos Mexicanos will continue to have the legal nature and organization in accordance with the private law of the place of their incorporation. For this purpose, a Committee of Subsidiary Companies is created within the board of directors of Petróleos Mexicanos, whose main function is to advise the board of directors on the creation, merger or spin-off of subsidiary companies.
• Creation of a Price Committee. Within the board of directors of Petróleos Mexicanos, a Price Committee is created to set and adjust the prices of goods and services produced or rendered by Petróleos Mexicanos.
• Participation of Private Parties in Exploration and Extraction Activities. The New Law of Petróleos Mexicanos provides that Petróleos Mexicanos must carry out exploration and extraction activities directly. However, for such purpose Petróleos Mexicanos may:
  • Within the framework of the new allocations for self-development, enter into all types of agreements (including works and services) for the execution and operation of the allocation.
  • Within the framework of the new allocations for mixed development, enter into the mixed agreements referred to in Section 3.2 above.
  • Within the framework of exploration and extraction agreements in which Petróleos Mexicanos is part of an association or participates in a consortium, it may do so directly, through subsidiaries, companies in which it has a minority interest, or through other forms of association permitted by the LSH and other applicable regulations.

7. Energy Planning and Transition Law

7.1. General Aspects

The Energy Planning and Transition Law ("LPTE") establishes the basis for strengthening the energy transition, the sustainable use of energy, clean energy obligations, and the reduction of polluting emissions.

The LPTE replaces the now-repealed Energy Transition Law ("LTE").

Although the LPTE introduces significant changes compared to the now-repealed LTE, it maintains the objectives of promoting the sustainable development of the energy sector and clean energy, supporting the energy transition, and advancing the sustainable use of energy.

In addition, the LPTE preserves the institutions established by the now-repealed LTE, such as the National Energy Information System (Sistema Nacional de Información Energética), the National Commission for the Efficient Use of Energy (Comisión Nacional para el Uso Eficiente de la Energía), the Fund for Energy Transition and the Sustainable Use of Energy (Fondo para la Transición Energética y el Aprovechamiento Sustentable de la Energía) and modifies the name of the Universal Electric Service Fund (Fondo de Servicio Universal Eléctrico) to the Universal Energy Service Fund (Fondo de Servicio Universal Energético).

7.2. Relevant Points

We highlight the following points of the LPTE:

• Inclusion of Energy Poverty and Energy Justice in the Energy Transition Framework. In line with the new LESE, energy poverty³ and energy justice⁴ are included within the framework of the energy transition, incorporating them within the medium- and long-term planning obligations.
• Importance of Planning. Emphasis is placed on the importance of planning the electricity and hydrocarbons sector for the purposes of the energy transition. Therefore, it regulates in greater detail the characteristics of the various planning instruments, such as the National Energy Transition Strategy, the Electricity Sector Development Plan, the Hydrocarbons Sector Development Plan and the Plan for the Energy Transition and the Sustainable Use of Energy. It is expected that SENER and the CNE and even the Ministry of Environment and Natural Resources must consider these planning instruments when granting permits and authorizations within the scope of their authority.
• Financing. In general, it is anticipated that the financing required to comply with the provisions of the LPTE will come from the federal budget, the wholesale electricity market and the Mexican Oil Fund for Stabilization and Development; in other words, it must primarily come from public sources. However, the possibility of utilizing other instruments is allowed, meaning that private initiative participating in the financing required to meet the LPTE's objectives cannot be ruled out.

8. Biofuels Law

8.1. General Aspects

The new Biofuels Law will regulate and promote the sustainable development of biofuels. In line with the new vision of the Mexican energy sector, the regulation and promotion of biofuels aim achieve energy sovereignty, justice, and self-sufficiency. The Biofuels Law replaces the now-repealed Law for the Promotion and Development of Bioenergy (Ley de Promoción y Desarrollo de los Bioenergéticos, "LPDB"), which was published almost 17 years ago.

The Biofuels Law establishes the basis for, among other things: (i) promoting the use and valorization of organic waste for biofuel production; (ii) promoting the sustainable production of biomass for biofuel production; and (iii) developing and promoting mechanisms to encourage the direct use of biomass as fuel.

In addition, the Biofuels Law regulates the production, import, export, storage, transportation, distribution, commercialization, and sale of biofuels to the public. It is important to note that the LPDB already regulated these activities; however, it did so in a deficient manner by establishing an unclear distribution of powers between SENER and the now extinct CRE.

8.2. Major Changes

We highlight the following points of the Biofuels Law:

• Establishment of the Biofuels and Biomass Regulators. It is established that the activities of the biofuels and biomass value chain will be regulated as follows:
  • SENER has the authority to: (i) establish national biofuels policy; (ii) grant, modify, update, suspend and revoke permits for the production, import, export, storage, transportation, commercialization, distribution and sale of biofuels to the public; and (iii) issue general administrative provisions to regulate the aforementioned activities.
  • The Ministry of Agriculture and Rural Development has the authority to grant permits for the production of biomass for the production of biofuels from sugarcane or sorghum. These permits will be granted provided that there are surplus inventories of domestic production to satisfy national consumption.
• SEMARNAT's Participation in Biofuels. Although SENER and the Ministry of Agriculture and Rural Development will be the regulators of the sector, the participation of the Ministry of the Environment and Natural Resources in the sector is increased. SEMARNAT is empowered to: (i) formulate and conduct national policy regarding the use and valorization of organic waste and the treatment of wastewater for direct use as biofuels or for biofuel production; (ii) to initiate, process and resolve the administrative procedures corresponding to its powers regarding the direct use of biomass as biofuel; and (iii) issue Mexican Official Standards (Normas Oficiales Mexicanas) and general administrative provisions related to environmental protection, industrial and operational safety, integral waste control, and atmospheric emissions, as well as wastewater treatment and recovery of organic waste, in connection with the use of biomass as biofuel.
• Promotion Instruments: Fiscal and Financial Incentives. It is established that the agencies of the federal public administration may promote and encourage fiscal, financial or market instruments that support (i) the use and valorization of organic waste and wastewater treatment for direct use as biofuels or for biofuel production; (ii) the sustainable production of biomass for direct use as biofuel or for biofuel production; and (iii) the production of biofuels and their sustainable use.

9. Other Relevant Laws and Amendments to Current Laws

9.1. New Geothermal Law

The new Geothermal Law forms part of the New Energy Laws package. Its purpose is to regulate the exploration and exploitation of geothermal resources.

The Geothermal Law is based on the text of the now-repealed Geothermal Energy Law, and therefore maintains some of the principles set forth in that law, such as: (a) the existence of permits to carry out the exploration of geothermal resources; (b) the existence of concessions for the exploitation of geothermal resources; and (c) that SENER is the authority in charge of regulating geothermal resources.

However, the Geothermal Law contains some aspects worth point out, such as:

• The concept of exempt geothermal exploitation for the exploitation of geothermal resources for diverse small case uses⁵ is introduced. This activity does not require a permit but must be registered with SENER.
• The creation of a diverse uses permit, which recognizes the right of a person to exploit geothermal resources and use them for various purposes.
• It is anticipated that concession holders will be able to exploit by-products except for lithium and those regulated by the LSH and the Mining Law unless they obtain the corresponding authorization.

9.2. Amendments to the Hydrocarbons Income Law

Finally, along with the New Energy Sector Laws, the Hydrocarbons Income Law was amended to create and regulate the so-called "oil right for welfare", which requires Petróleos Mexicanos, in its capacity as the holder of allocations to carry out hydrocarbon exploration and extraction activities, to pay annually to the Mexican Petroleum Fund for the hydrocarbons extracted in the year in question under the corresponding allocation.

_{1 Amendments to the Law of the Mexican Petroleum Fund for Stabilization and Development, the Law of Income on Hydrocarbons and the Organic Law of the Federal Public Administration were also published.
2 Defined as the electrical networks that do not form part of the National Transmission Grid or the General Distribution Grids.
3 Defined as the situation that occurs when a dwelling is unable to meet one or more basic energy needs, such as water heating, cooking, food preservation and lighting, due to its income conditions and social deprivation.
4 Defined as actions or strategies aimed at reducing energy poverty, social and gender inequalities in the use of energy and promoting regional development and shared prosperity through access to reliable, affordable, safe and clean energy and energy infrastructure to meet basic needs, reducing impacts on health and the environment. It also includes the expansion of spaces for inclusive participation, mainly of indigenous peoples, in the local production chains of energy projects.
5 Diverse uses are understood to be any activity that takes advantage of the heat from the subsoil to benefit from geothermal energy, other than the generation of electrical energy, including urban or greenhouse heating or both, drying of agricultural or industrial products, balneology, aquaculture, canning, different types of thawing, wool and dye washing, refrigeration by absorption or absorption with ammonia, chemical extraction, fresh water distillation, metal recovery, evaporation of concentrated solutions, paper pulp manufacturing, among others.}

_{White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.}

_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

_{© 2025 White & Case LLP}