Ruling on Modification to Ethanol Fuel Rule

Summary:

On January 22, 2020, the Supreme Court of Mexico invalidated an agency action that would have allowed higher ethanol content in gasoline. The Court concluded that the precautionary principle and the right to a healthy environment require consideration of ethanol's environmental risks, including its contributions to greenhouse gas emissions.

In 2017 Mexico's Energy Regulatory Commission modified a fuel rule to allow a maximum of 10% ethanol in gasoline sales, up from 5.8%. The modified rule would have applied nationwide, with exceptions for Mexico's three largest cities, where air pollution is of particular concern. The Supreme Court invalidated the measure, citing the potential for higher levels of pollution with a greater maximum ethanol content, including the potential for increased greenhouse gas emissions. The Court recognized that the measure could lower the cost of fuel, but determined that economic considerations must be balanced against the right to a healthy environment and Mexico's commitment to reduce greenhouse gas emissions as a signatory of the Paris Agreement. The Court concluded that a measure carrying significant environmental risks must be evaluated using the best scientific information available and should not be enacted without public participation. In reaching this conclusion, the Court cited the right to consultation in environmental matters as well as the precautionary principle.

At Issue: Whether Mexico's rule increasing the maximum ethanol fuel content is constitutional.