On August 26, 2016, the Energy Regulatory Commission (CRE for its Spanish acronym) published in the Federal Official Gazette Official Mexican Standard NOM-016-CRE-2016 establishing Oil-Product Quality Specifications (NOM-016). NOM-016 allowed the use ethanol as an oxygenator in Regular and Premium gasoline, with a maximum content of 5.8% by volume. On June 26, 2017, CRE issued an Accord amending NOM-016, updating the percentage of ethanol as an oxygenator for gasoline to 10% by volume (Accord 028), among other changes.
On August 7, 2017 Mario Sergio Zúñiga Luján challenged the constitutionality of Accord 028, arguing a violation of articles 4, 14 and 16 of the Mexican Constitution, related to the first paragraph of article 25, that guarantees Mexico's sustainable development. Because of the high importance, relevance and impact of the challenge to Accord 028, the First Collegiate Court on Administrative matters of the Third Circuit requested the Supreme Court of Justice (the Supreme Court) to assert jurisdiction over the challenge of its constitutionality. As a result, the Second Chamber of the Supreme Court conducted the session to discuss the jurisdiction and challenge of Amparo on Review 610/2019.
On January 15, 2020, the Supreme Court declared Accord 028 unconstitutional, because of the importance of the relation between fundamental rights and the environment thereby nullifying Accord 028, including the increase in the percentage of ethanol as an oxygenator in gasoline, which means the maximum percentage of ethanol that can be used as oxygenator for gasoline decreased to the original threshold of 5.8%.
The Supreme Court applied to the case the environmental precaution principle that prohibits a single person or authority from issuing a decision that may put at risk or cause serious and irreversible consequences to the environment, in this case because the authority did not conduct the studies to value the magnitude of the problems. In addition, the Supreme Court indicated that in order for such amendments to take place, the participation of experienced professionals on the environment sector was required, in order to determine the consequences of the proposed actions. The Supreme Court also indicated that the citizen participation is necessary in order to establish the modifications or abrogation of certain regulation that may cause serious affectations to the environment.
Impacts of the ruling:
- The annulment of Accord 028 not only impacts the percentage of ethanol as an oxygenator for gasoline, but also the rest of the content of Accord 028 content (therefore the original content of the NOM-016 is again valid and enforceable).
- Even though the main effect of the decision applies to Accord 028, it may be used as a precedent to contest decisions made by any authority (including regulatory organism) that fail to comply with the requirement of having proper evaluations, studies from experienced professionals or citizen participation.