Policy Brief
CO2 emission standards to achieve Mexico’s 2030 electrification target for light-duty vehicles
More than 90% of Mexico’s CO2 emissions from transportation come from vehicles on the road, with light-duty vehicles accounting for 65% of the on-road transport CO2 emissions. Mexico’s updated Nationally Determined Contribution in 2022, pledged a 35% reduction in greenhouse gas emissions across the economy, including a 22% reduction from the transport sector by 2030. Mexico further officially announced a target for 50% of new LDV sales to be zero-emission by 2030. However, these ambitious commitments are not well-aligned with the current Phase 2 CO2 emissions standard for LDVs, enacted in January 2024, setting gCO2/km targets for 2025-2027 and accounting for excessive compliance flexibilities.
This brief models the CO2 emissions impacts of the Phase 2 standard and alternative policy scenarios to identify the potential stringency level of the CO2 standard that could help Mexico achieve its electrification target by 2030.
Key findings suggest that the currently adopted Phase 2 standards will not be sufficient to achieve Mexico’s climate and electrification goals. Furthermore, these standards could potentially drive increase in gCO2/km emissions from internal combustion engine (ICE) vehicles. Such increase in ICE emissions can lead to 108 million tonnes additional cumulative emissions during 2024-2050, compared to business-as-usual level.
To reach the goal of 50% EV sales by 2030 and achieve significant CO2 reductions, the fleet-average gCO2/km emissions of new LDVs would need to drop by 50% to 70%, compared to 2016. Such stringency levels would lead to cumulative CO2 reduction of nearly 300 million tonnes through 2050, relative to business-as-usual level. A scenario supporting only the 50% EV target, without major ICE efficiency improvement, might hinder progress. In contrast, aligning ICE efficiency improvement with that of other leading markets could significantly bolster Mexico’s prospects for meeting its electrification target by 2030.
