Mexico can become competitive zero-emission fuels producer and exporter, new report finds

With quick and strategic action, Mexico has the potential to establish itself as a global leader in maritime decarbonisation by engaging in green fuel production and bunkering, the new P4G-Getting to Zero Coalition report shows.

Illustration. Courtesy of Global Maritime Forum

The report titled “Shipping’s energy transition: strategic opportunities in Mexico” explores the potential for Mexico to accelerate and benefit from international maritime decarbonisation.

It was prepared by the P4G-Getting to Zero Coalition partnership which seeks to engage stakeholders and companies from three P4G partner countries -Indonesia, Mexico and South Africa – with the aim to make zero-emission vessels and fuels a reality and identify concrete and actionable growth and business opportunities.

” … The massive demand for zero-emission fuels that will arise constitutes a major growth opportunity for Mexico, having the chance to become a future powerhouse for international shipping in Latin America“, says Ingrid Sidenvall Jegou, project director at Global Maritime Forum.

With access to both the Pacific and Atlantic Oceans, well-established shipping routes and trade relations to multiple continents, Mexico can, according to the new report, tap into new markets and establish itself as a global energy hub and provider of green zero-emission fuels.

Realizing this potential can accelerate the transition to cleaner forms of energy across the wider economy, creating several opportunities for the country, the coalition said.

Being part of the transition for shipping and investing in itself, Mexico could create new revenue streams from scalable zero-emission fuel (SZEF) exports and bunkering, establish green hubs and ports, as well as open possibilities for green corridors along key shipping routes.

According to the report, estimates show that the development of green fuel infrastructure to serve Mexico’s shipping sector could attract investment up to $37-53 billion MXN ($1.9-2.7 billion USD) in onshore infrastructure by 2030.

After consultation with key Mexican stakeholders, the report names three key opportunities for Mexico, including the port of Manzanillo, DH2 Energy activities in Central Mexico, and Baja California, that each have the potential to benefit from the production, offtake, and distribution of SZEFs.

However, essential to unlocking these opportunities is a facilitative policy and financial framework capable of effectively motivating and convening key actors across sectors and value chains, the report finds.

Presently, Mexico lacks a favourable ecosystem both politically and financially to leverage benefits from the production and use of SZEF, especially given the current administration’s preference to continue exploiting the country’s fossil fuel resources.

As other countries in Latin America take steps to prepare their own bunker supply chains and engage with the international shipping sector, Mexico should take quick and strategic action to position itself as a competitive producer and exporter of SZEF.

With appropriate incentives and targeted action towards encouraging investments into renewable energy and fuel production, Mexico can gain a competitive advantage in the bunkering and export of SZEF in Latin America, the report concludes.

“As Mexico charts its path toward sustainable development, this report highlights tangible steps the country can take to produce green fuels”, said Ian de Cruz, global director at P4G.

This will help create jobs, expand clean energy across sectors and attract green investment. P4G is pleased to support the Getting to Zero Coalition Partnership’s report, so Mexico can leverage this momentum and take the quick action needed to transition to zero-emissions shipping.”

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