Preparation of an Emissions Trading System (ETS) in Mexico

Mexico intends to involve the private sector in the implementation of its NDCs through the introduction of an Emissions Trading System (ETS). However, there is still a lack of expertise and institutional capacity to continue the development of and implement an ETS. Therefore, the project creates the institutional and technical conditions to be met by stakeholders from the public and the private sector and civil society. In doing so, the project develops knowledge-based recommendations for action to guide the Mexican decision-making processes on ETS design. The project strengthens the different stakeholders involved through capacity development and promotes cooperation between them. Besides, the project relies on international knowledge transfer to enable the Mexican stakeholders to learn from other countries and regions that already have an ETS and to disseminate the lessons learned in Mexico.

Project data

Countries
Mexico
IKI funding
4,200,000.00 €
Duration
09/2017 till 02/2023
Status
open
Implementing organisation
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Political Partner
  • Ministry of Environment and Natural Resources (SEMARNAT) - Mexico
Implementing Partner
  • Ministry of Environment and Natural Resources (SEMARNAT) - Mexico
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State of implementation/results

  • Building on the work of the Climate Alliance and with the support of the project, the amendment to the Climate Change Act (LGCC) came into force in July 2018, providing for the introduction of an emissions trading scheme (ETS) from 2022 and a three-year pilot phase from 2019.
  • Results of the project's technical and legal advice fed into the development of the legal framework as well as negotiations with the private sector.
  • In Q2 2022, the project conducted four technical workshops with companies participating in the ETS, in coordination with SEMARNAT, Mexico's Ministry of the Environment, to examine the impact of emissions trading on competitiveness.
  • On 20 April, an information event on the ETS was held for parliamentarians in Mexico. The event was organised by the civil society organisation POLEA under a funding contract with the project.
  • In March 2022, 67 people from Mexican government and research institutions participated in the inaugural session of the ETS Academy, a three-week training format on technical, economic and policy issues related to carbon trading. Speakers included representatives of the Federal Ministry of Economics and Climate Protection (BMWK) and Dr Jürgen Landgrebe, Head of the German Emissions Trading Authority (DEHSt) at the Federal Environment Agency.
  • Since February 2022, the SEMARNAT project has been advising on the regulation for the implementation phase of the ETS, which is to enter into force in 2023. For this purpose, the implementation of important technical studies was already started in the 3rd quarter of 2021. Thematic focal points of the studies include: Setting of emission caps (CAP), competitiveness of participating companies, allocation of emission rights and feasibility of benchmarking analyses.
  • In the 1st quarter of 2021, anti-corruption training was conducted with the participation of the German Emissions Trading Authority (DEHSt), SEMARNAT and the companies participating in the ETS. At the same time, in cooperation with the EU- and BMU-funded SPIPA project and the European University Institute (EUI), four exchange events on European experiences with ETS design and implementation were held, with the participation of SEMARNAT, the private sector and Mexican research institutions.
  • The project also supported the establishment of a government website on the ETS pilot phase, where studies and information materials developed by the project, such as brochures and factsheets, are available to the public. --The project has also developed didactic tools such as a training course for civil society and a reference book with contributions from 23 academics from renowned Mexican research institutions. The aim of both measures is to disseminate knowledge on ETS.
  • In June 2022, the project published a video about the Mexican ETS and the role of the project. The video is available in Spanish.

 

Latest Update:
03/2023

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