Commodities News

Mexico energy bill poses investment risk, top U.S. lobby says

The top U.S. business lobby in Mexico on Tuesday raised concerns about a bill that would strengthen state control of the power market at the expense of private capital, saying it would make it tougher for American companies to meet climate pledges.

Mexican President Andres Manuel Lopez Obrador has championed legislation to prioritize national power utility the Comision Federal de Electricidad (CFE), but critics say the plan undermines wind and solar power investment at a critical time for companies under pressure to improve their clean energy mix.

“Big U.S. companies have climate commitments as serious as being able to operate with 80% or 100% clean energy in the next decade,” Ana Lopez, head of the American Chamber of Commerce in Mexico (Amcham), told a congressional hearing on the bill.

“If they cannot meet their commitments because Mexico is not capable of providing enough clean energy, these companies will not be able to continue operating in the country,” she added, referring to the planned constitutional overhaul.

Amcham’s members also worry the initiative would go against Mexico’s commitments under the United States-Mexico-Canada Agreement (USMCA) trade pact, Lopez said.

U.S. Energy Secretary Jennifer Granholm, who visited Mexico last month, said the bill risked crimping investment and would not create a “level playing field” for U.S. companies wanting to invest in renewable energy there.

U.S. climate envoy John Kerry is scheduled to meet Lopez Obrador in Mexico on Wednesday to discuss expanding renewable energy and ensuring investment.

The Mexican president said the two countries would work together in a “coordinated fashion” on climate goals.

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