The design of the Emissions Trading System (ETS) in Mexico has required generating inputs focused on technical, regulatory and capacity-building aspects. With respect to the latter, in the first year of the Preparation of an Emissions Trading System in Mexico (SiCEM) project of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, efforts have been focused on the country’s industrial sector.

In accordance with the reforms to the General Law on Climate Change, in its pilot phase the preliminary legal basis of the ETS “should consider the circumstances around competitiveness of the national industry in the global context, particularly in those sectors whose economic activity is exposed to international competition, ensuring not to affect its competitiveness.” This mandate offered relevant greenhouse gas (GHG) emitting sectors the opportunity for an ongoing and close collaboration with the actors involved in the ETS project.

In 2018, a series of activities have been carried out with the industry to build sectoral capacities and support their participation in the ETS design and implementation processes. During the first half of 2018, generalized and specialized approaches were employed in the workshops, in which participants were taught both basic and complex topics. In the second half of the year, participants attended a study trip to Germany to witness the European Union ETS (EU ETS) design and implementation experiences firsthand. Interviews with representatives of key German institutions for the EU ETS gave participants a better understanding of the opportunities and challenges facing regulated sectors.

According to Goal 9: Industry, innovation and infrastructure of the United Nations Sustainable Development Goals (SDGs), innovation and investment in infrastructure are a fundamental part of economic growth and development. It is precisely at the moment of looking for permanent solutions in the technology field where research and innovation promote the path towards the achievement of sustainable industries.

The implementation of the ETS will support Mexican companies in making decisions to improve technologically and reduce their GHG emissions, or to participate in the market. This will catalyze innovation processes as companies seek the most cost-effective solutions. Currently, a series of sectoral workshops are being planned to study key decision-making elements, including about available technology in sectors such as steel, cement and financial analysis. The workshops will also cover the steps of the ETS compliance cycle and the issue of auctions, among other topics.

The SiCEM project is developed by GIZ  on behalf of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) of Germany, in support of the actions led by the Ministry of the Environment and Natural Resources (SEMARNAT).