Biofuels use in Mexico still limited

March 26, 2026
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Biofuels in Mexico are still limited but growing, with policies and projects aimed at expanding their role in the energy mix. Here’s a clear overview of how biofuels are used in Mexico:

1. Main types of biofuels used

Mexico primarily focuses on three types:

Bioethanol

  • Produced from crops like sugarcane and corn
  • Used mainly as a gasoline additive (blending fuel)
  • Typical blends:
    • Up to 5.8% ethanol (E5.8) allowed nationwide (outside major cities)
    • Up to 10% (E10) allowed in some regions without a strict national mandate

Main use: transport sector (cars and gasoline engines)

Biodiesel

  • Produced from:
    • Waste vegetable oils
    • Non-edible crops like jatropha
  • Used as a diesel substitute or blend

Main use: trucks, buses, and industrial transport

Biogas / biomethane

  • Generated from:
    • Agricultural waste
    • Animal manure
  • Used for:
    • Electricity generation
    • Heat or self-consumption energy

Smaller role compared to liquid biofuels

2. Current level of use

  • Biofuel use in Mexico is relatively low compared to countries like Brazil or the U.S.
  • Ethanol consumption remains small (tens of millions of liters vs. billions of liters of gasoline)
  • There is no strong national blending mandate, which limits expansion

Result: biofuels are supplementary, not a major energy source

3. Government policy and regulation

Mexico has introduced several laws to promote biofuels:

Key laws:

  • 2008 Bioenergy Law → supports development of biofuels
  • Energy Transition Law (2015) → promotes cleaner energy
  • New Biofuels Law (2025) → creates a detailed regulatory framework

2025 updates:

  • Rules now cover:
    • Production
    • Transport
    • Distribution
    • Sales of biofuels

Goal: increase use of biofuels and reduce emissions

4. Why Mexico is interested in biofuels

Main motivations:

  • Reduce greenhouse gas emissions
  • Improve air quality (especially in cities)
  • Support rural agriculture
  • Diversify energy beyond oil

5. Challenges limiting biofuels use

Despite potential, several barriers exist:

Economic issues

  • Biofuels are often more expensive than fossil fuels
  • Government subsidies keep gasoline/diesel cheap

Infrastructure gaps

  • Limited production plants and distribution systems

Policy uncertainty

  • Weak mandates and inconsistent regulations slow investment

Food vs fuel concerns

  • Using corn for ethanol raises food security concerns

6. Overall role today

  • Biofuels in Mexico are:
    • Emerging energy source
    • Used mainly in transport (blending fuels)
    • Not yet widely adopted or dominant

Mexico is still in an early development stage, but new policies (especially since 2025) aim to expand their use.