Wednesday, December 6, 2023

Regulator gives Pemex a 5-year extension on clean diesel exemption

The Energy Regulatory Commission (CRE) has voted in favor of postponing for five more years the implementation of a rule requiring Pemex to produce, distribute and sell ultra-low-sulfur diesel (ULSD) across the country.

Members of the CRE governing body voted unanimously on Wednesday to defer the rule in a brief meeting. No reason was given for the decision and no public discussion was allowed.

The postponement comes after a deferral of the rule in late 2018 amid a continuing legal battle launched by Pemex over the matter.

According to the CRE resolution, the state oil company can only continue marketing ULSD in the country’s three largest cities – Mexico City, Guadalajara and Monterrey – and along the northern border.

In a document sent to the CRE last week by energy undersecretary Miguel Maciel, the federal government said the technical and operational conditions for distributing ULSD across the country won’t exist until late 2024, the year the current administration will leave office.

The news agency Reuters reported that Pemex doesn’t currently produce enough clean diesel to satisfy the demand that would be created by the rule, which was approved during the administration of the previous government. Its aim is to reduce carbon emissions and replicate regulations already in place in neighboring countries.

Refineries in the United States began preparing last year to produce USLD to export to Mexico but as the diesel rule didn’t take effect, higher demand for the clean fuel never came.

Pemex planned a project to produce USLD at its refinery in Cadereyta, Nuevo León, but it was suspended as were similar projects at other refineries due to a lack of funding.

The clean diesel rule passed during the administration of former president Enrique Peña Nieto but was based on a clean fuel strategy designed in 2005.

Nationwide distribution of USLD was originally supposed to begin in September 2009.

The federal governments led by ex-presidents Vicente Fox, Felipe Calderón and Peña Nieto all failed to meet their clean fuel commitments, the newspaper El Universal reported.

Source: Reuters (sp), El Universal (sp) 

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