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  • Carbon Tax in Mexico

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    ULISES
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    Mexico introduced a carbon tax in 2014 that applied to the use of fossil fuels. The initial price was set at $5 US per ton of CO2 emissions, but modifications in Congress lowered the price to around $3.5 US per ton. Natural gas was exempted from the tax. The estimated annual revenue from the carbon tax was $1 billion US, which was transferred to Mexico's Finance Department. While the carbon tax was intended to promote cleaner fuels, some exemptions and the lowered price mean it may have limited impact on actually reducing CO2 emissions.

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    Mexico introduced a carbon tax in 2014 that applied to the use of fossil fuels. The initial price was set at $5 US per ton of CO2 emissions, but modifications in Congress lowered the price to around $3.5 US per ton. Natural gas was exempted from the tax. The estimated annual revenue from the carbon tax was $1 billion US, which was transferred to Mexico's Finance Department. While the carbon tax was intended to promote cleaner fuels, some exemptions and the lowered price mean it may have limited impact on actually reducing CO2 emissions.

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    17 views6 pages

    Carbon Tax in Mexico

    Uploaded by

    ULISES
    Mexico introduced a carbon tax in 2014 that applied to the use of fossil fuels. The initial price was set at $5 US per ton of CO2 emissions, but modifications in Congress lowered the price to around $3.5 US per ton. Natural gas was exempted from the tax. The estimated annual revenue from the carbon tax was $1 billion US, which was transferred to Mexico's Finance Department. While the carbon tax was intended to promote cleaner fuels, some exemptions and the lowered price mean it may have limited impact on actually reducing CO2 emissions.

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    © All Rights Reserved
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    of 6

    SEMARNAT

    SEMARNAT
    SECRETARÍA DE MEDIO AMBIENTE
    Y RECURSOS NATURALES

    CARBON TAX
    IN MEXICO

    May 2014
    FOSSIL FUELS
    CARBON TAX
    A Carbon Tax was introduced in Mexico in 2014

     It applies only for the use of fossil fuels

     The Tax is intended to create awareness of CO2 Emissions, to put a


    price to carbon and to promote the use of cleaner fuels (initial price
    set at $5 US$/tCO2e)

     It also allows for the use of offsets in the payment (only CDM)

    However, modifications during its pass through Congress modified the


    initial proposal:

     Approx price of Carbon was set at $US 3.5 / tCO2e


     Natural gas was exempted
     Estimated revenue: approx $US 1Bn
     Transferred to Finance Dept by first producers/importers

    In following years, some changes could be introduced in the law to


    improve possible use of offsets
    FOSSIL FUELS
    CARBON TAX

    0.0 ¢/l 6.60 ¢/l 13.01 $/ton 13.45 $/ton 15.6 $/ton 27.54 $/ton
    10.38 ¢/l 10.38 ¢/l 10.38 ¢/l 12.40 ¢/l 12.59 ¢/l
    FOSSIL FUELS
    CARBON TAX
    CARBON TAX
    GENERAL Difference
    FOSSIL FUEL CONTENT IN (%)
    FORMULA Final proposal
    MEXICO* Initial proposal
    (LIEPS)
    NATURAL GAS CH4 0.526 kgC/m3 11.94 c/m3 0
    PROPANE C3H8 0.458 kgC/m3 10.50 c/l 5.91 c/l 43.7

    BUTANE C4H10 0.458 kgC/m3 12.86 c/l 7.76 c/l 39.7

    GAS
    (REGULAR AND Mixprom C8H18 0.619 kgC/m3 16.21 c/l 10.38 c/l 36.0
    PREMIUM)

    JET FUEL Mixalta C8H18 0.690 kgC/m3 16.21 c/l 10.38 c/l 36.0

    TURBOSINE AND
    Mixbaja C12H26 0.710 kgC/m3 18.71 c/l 12.40 c/l 33.7
    OTHER KEROSENE

    DIESEL C12H26 - C15H32 0.722 kgC/m3 19.17 c/l 12.59 c/l 34.3

    FUEL OIL
    (HEAVY AND C20Hm – C70Hm 0.813 kgC/m3 20.74 c/l 13.45 c/l 35.1
    REGULAR 15)

    OIL COKE >C70Hm 0.900 kgC/m3 189.85 $/ton 15.60 $/ton 91.8

    MINERAL CARBON C137H97 – C240H90 0.825 kgC/m3 178.33 $/ton 27.54 $/ton 84.6

    *Based on chemical analysis from PEMEX fuels


    **1 liter weights 0.54 kilograms
    FOSSIL FUELS
    CARBON TAX
    SEMARNAT
    SEMARNAT
    SECRETARÍA DE MEDIO AMBIENTE
    Y RECURSOS NATURALES

    GRACIAS

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