Mexico ratifies cleaner-diesel use rule for heavy vehicles

On Thursday, the Mexican government ratified an environmental rule that requires truck and bus makers to manufacture and sell only vehicles running on clean diesel starting in January 2021 , despite criticism from the industry.

The Environment Ministry said in a statement that the rule, which mandates ultra-low-sulfur diesel (ULSD) , was necessary to ensure a healthy environment and “to be consistent with commercial partners in North America and the European Union.”

President Andrés Manuel López Obrador’s administration is under pressure to fulfill environmental commitments at a time when several cities in the country show high levels of pollution.

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Mexico

, Canada , and the United States are close to ratifying a new trade deal , which was modified at the last minute to add labor and environmental provisions demanded by Democrats in the United States.

The Mexican government said that the domestic availability of ULSD was at around 86% , considering production from state oil company Pemex and imports. But trade association Anpact estimated that as of mid-2019 , ULSD was available in only 75% of the country’s gasoline stations, citing a survey of 345 outlets.

“Not having ULSD in 100% of the country represents an obstacle for carriers as they decide whether to renew their fleet,” said Miguel Elizalde , president of Anpact, which represents companies such as Navistar International Corp and Volkswagen .

The Environment Ministry said in the statement that it recognized the need to develop a plan to distribute ULSD more strategically and was participating in a working group with Pemex to modify another standard issued by energy regulator CRE , which also calls for clean diesel.

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In December, CRE postponed the deadline, however, for Pemex to comply with the rule until 2025 .

Anpact

warned in August that manufacturers were running out of time to comply with the environmental provision .

“What we ask is that both technologies co-exist,” Elizalde said.

Mexican truck and bus output fell sharply at the end of last year due in large part to doubts over the future of this new diesel rule that requires that only vehicles using cleaner-burning fuel are made and sold, according to a local trade group.

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The assembly of trucks and buses fell nearly 38% in December, data from trade association Anpact showed, in line with the falling production of heavy vehicles since August.

Despite the decline in December 2019 was a record year for production, up 12% from 2018, according to Anpact.

The trade group attributed the production decline to companies’ hesitation to update their fleets amid uncertainty about the rule that mandates the use of clean diesel starting in 2021 .

Concerns about the rule remain because Pemex will not be required to produce, distribute and sell ultra-low-sulfur diesel (ULSD) until 2025 , potentially leaving transportation companies without a guaranteed supply of fuel.

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Anpact has asked Mexico’s Environment Ministry to modify the rule so that vehicles running on conventional diesel can coexist with those running on ULSD until the supply of clean diesel is guaranteed nationwide.

Exports, which represent 85% of production , fell 27.4% in December compared with the same month in 2018, hit by lower demand in the United States and Canada , Anpact said. The declining demand has also hit production figures, the group said.

However, exports were up 13.9% in the year overall, Anpact said.

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