This Country Framework is part of the Regulatory Frameworks for Project-Based Carbon Credit Markets. To learn more click here.
Overview
For nearly two decades, Mexico has hosted carbon projects registered with independent crediting standards and the Clean Development Mechanism (CDM). Most of the credits issued to these projects have been used abroad for voluntary emissions compensation and compliance with Kyoto Protocol targets. With the launch of Mexico’s Emissions Trading System (ETS), the role of these projects could change, but this remains to be seen.
Over the last five years, Mexico has established early institutional foundations for carbon market activity through the implementation of a pilot phase for its ETS and the assessment of voluntary carbon market (VCM) potential. The ETS pilot phase, launched in 2020, caps CO₂ emissions from selected sectors and is overseen by the Ministry of Environment and Natural Resources (SEMARNAT) and the Emissions Trading System Committee (COCOSCE). The use of offset credits is expected to be permitted in the operational phase of the ETS as a flexibility option to facilitate compliance. However, detailed rules governing offset eligibility, quality criteria, and use in the operational phase have not been published. As of early 2026, Mexico’s ETS remains in a transitional implementation stage following its pilot and transition phases, with regulators and stakeholders anticipating the full operational (compliance) phase and accompanying rules to be finalized and launched later in 2026.
In the meantime, VCM activity exists outside the ETS. A government-commissioned study completed in 2024 by the National Institute of Economy and Climate Change assessed the carbon market’s potential in the country, but did not issue formal regulatory recommendations. Additional analytical work is underway, including a study to identify strategic pathways for the agricultural sector’s participation in the VCM.1 Mexico previously maintained national procedures for approving CDM projects under the Kyoto Protocol;2 however, these frameworks are no longer operational following the wind-down of the CDM and have not been formally repurposed for domestic or voluntary carbon crediting.
Current provisions focus primarily on emissions reporting and verification within the ETS framework, while supply-side, demand-side, and market-side regulations for project-based carbon credit markets (PCCMs) remain largely undeveloped. If the ETS operational phase were to allow limited use of carbon credits for compliance, as contemplated in earlier draft regulations,3 comprehensive rules―such as eligible activities, methodologies, and carbon crediting standards―would be required to define how credits issued under voluntary registries could be eligible and used for that purpose. As of yet, no binding requirements have been established that govern credit issuance standards, credit use, accounting treatment, market conduct, or transparency in VCMs. Mexican authorities have acknowledged risks related to double counting and the importance of traceability, including in the context of potential future alignment with Article 6 of the Paris Agreement; however, regulations addressing host country authorization, corresponding adjustments, or the treatment of internationally transferred mitigation outcomes have not been published.
I. Supply-Side Regulations
Mexico’s supply-side PCCM framework is informed by the country’s engagement with VCMs, the ETS pilot phase regulation signaling the possibility of emissions compensation in the first phase, the carbon tax compensation rules issued by the Ministry of Finance in 2017, and a government-issued study on VCMs. As of April 2026, no binding regulations governing carbon credit issuance were established. The ETS pilot phase applies to mining and extractive activities, industry, and the power sector, with the use of offset credits expected in the operational phase under rules that have not yet been published. The VCM study identifies a broad range of potential credit-issuing activities, including renewable energy, land use, waste management, agriculture, transport, and energy efficiency, but does not establish eligibility criteria or mandatory methodologies. While additionality, permanence, quantification, and double-counting risks are discussed at a conceptual level in government analysis, no official standards, permanence requirements, registry rules, or procedures governing host country authorization and corresponding adjustments under Article 6 have been adopted.
A. Regulatory Framework
- Market Classification: Hybrid (i.e., ETS with planned offset use and voluntary market activity).
- Regulatory Status: Mexico was the first country in Latin America to commence an ETS pilot phase, which occurred in 2020.4 The use of offset credits is expected to be allowed in the operational phase.5 A study on VCMs was conducted in 2024, although no formal recommendations were made.6
- Key Authorities: Mexico’s SEMARNAT and COCOSCE, a dedicated committee within the Mexican federal government, are responsible for drafting regulations for the Mexican ETS,7 which could eventually determine further guidelines regarding acceptance of carbon credits.
- Sanctions: No penalties have yet been mandated. Further information is expected in the operational phase of the ETS.8
B. Credit Generation Standards
- Eligible Activities: Currently, the Mexican ETS pilot phase covers mining and extractive activities as well as the industry and power sectors.9 The government study highlights renewable energy, land use, waste management, home and community, chemical processes and manufacturing, energy efficiency, agriculture, and transport as credit-issuing activities in VCM,10 although there is no official regulation yet on whether all of those will be accepted.
- Methodology Framework: No specific standards are referenced as mandatory or preferred. The government study on VCM outlines where Mexico’s current domestic project-based credits are issued and highlights Climate Action Reserve (CAR), Gold Standard, Plan Vivo, and Verra’s Verified Carbon Standard (VCS).11
- MRV Requirements: Credits traded on the national ETS shall follow an annual self-reporting cadence and be verified by a third party.12 Eventual offset participation in the market is expected to follow the same rules. The governmental study on VCM reinforces the need to disclose “quality data” with independent verification processes, where the data provided is confirmed to be accurate and meets pre-determined requirements. Verifying organizations are accredited under international standards and approved by the registries where the credits are issued, rather than by Mexican authorities.13
- Registry System: Although no official requirements have been established, the government recognizes the need for appropriate tracking, registration, and transparency requirements for carbon credits. These include the appropriate identification, recording, and tracking of mitigation activities, issued credits, and final use, which registries shall conduct.14 These shall also provide complete and transparent information about accredited mitigation activities in an electronic format accessible to the general public.15
C. Integrity Principles
- Additionality Tests: To ensure that additionality principles are met, the government states that the project must not be legally required or part of routine practice; the project must demonstrate that credit revenues are necessary to close financial gaps and enable implementation; and the project description must demonstrate additional benefits that would not occur without the intervention. The implementer may use recognized tools or guidelines to prove additionality, identify alternative scenarios, or analyze barriers, as outlined by the selected methodology and selected standard.16
- Permanence Safeguards: There is no official requirement regarding permanence. The governmental study recognizes permanence standards when the generated credits have a similar duration or permanence to the emissions they offset, thereby ensuring their compensatory function. Due to the nature of carbon projects, protocols require all initiatives to account for the permanence of emission reductions or removals.17
- Quantification Standards: No quantification methodologies are officially mandated. The government study emphasizes the role of verification bodies in quantifying reduced or avoided emissions, but does not prescribe specific scientific methods.18
- Double-Counting Prevention: The study warns against double counting, describing it as a situation where a greenhouse gas emissions reduction unit is used more than once, either unintentionally or deliberately. This could involve the following: (a) being included in a regulated market inventory and/or (b) being sold to third parties for voluntary or regulated offsetting. This poses risks to national accounting systems under the Paris Agreement as well as voluntary market registries. Preventing double counting requires avoiding any overlap in credit use.19
D. Sustainable Development
- Co-Benefits: There are currently no co-benefit requirements.
- Net-Zero Compatibility: There is no mention of net-zero compatibility.
II. Demand-Side Regulations
Draft ETS regulations published for public consultation in 2018 contemplated the use of carbon credits as a flexibility option to meet a portion of compliance obligations (often referenced as up to 10 percent),20 with indicative limits discussed during the consultation process. However, this flexibility mechanism was not operationalized during the pilot phase, given the design of allowance issuance and allocation, and no implementing rules were adopted. As of April 2026, there were no published requirements addressing mitigation hierarchy, scope eligibility, quality standards, accounting treatment, public disclosure, or alignment with science-based targets, and no government authority has been designated to oversee demand-side credit use. Although the government has indicated that guidance on offset use within the ETS will be provided in the operational phase and has recognized in its VCM study the importance of tracing credit use to national climate objectives, no binding rules or disclosure obligations have been issued.
A. Use Authorization Framework
- Applications Allowed: There is no official guidance for PCCMs at the moment. The government has stated that further guidance on offset use for the Mexican ETS will come once the operational regulations are released.21
- Regulatory Status: No official demand-side guidelines or regulations have been released. The government-issued study on VCM potential in Mexico touches upon demand-side applications for credits, but does not provide any guidance, binding or otherwise.22
- Oversight Bodies: There are no predetermined government authorities for demand-side regulations.
- Standards Integration: Guidelines for the integration of credit purchase with standards are not present.
- Enforcement Mechanisms: No enforcement mechanisms are disclosed.
B. Corporate Use Requirements
- Mitigation Hierarchy: No regulations on mitigation hierarchy disclosure for credits have been released.
- Scope Coverage: There is no disclosure on restrictions for the scope coverage of offsets.
- Quality Standards: There is no disclosure on quality standards to be followed for credit use. The study conducted by the Mexican government highlights the importance of avoiding double counting and ensuring permanence, additionality, and the purchase of verifiable emissions.23
- Accounting Treatment: None related to the demand side has been specified.
C. Transparency and Assurance
- Public Reporting: There is no requirement for demand-side transparency and public disclosure.
- Third-Party Verification: No requirements for the demand side related to third-party verification have been released.
- Science-Based Targets: There is no requirement for the demand side to align with the Science Based Targets initiative.
- Policy Advocacy: There are currently no requirements to link credit use to policy. However, the government recognizes in its VCM study the importance of eventually being able to trace credit use to its nationally determined contribution.24
D. Market Integrity Protection
- Anti-Greenwashing: There is no mention of anti-greenwashing measures.
- Co-Benefits Delivery: There is no mention of assurance of co-benefit delivery from the demand side.
III. Market-Side Regulations
Mexico’s market-side carbon market infrastructure remains under development, with the government establishing a registry and institutional arrangements for ETS allowance auctions and a private-sector platform, MexiCO₂, operating under the Mexican Stock Exchange to facilitate voluntary carbon credit transactions. MexiCO₂ supports the trading of credits registered under international standards, such as the UNFCCC’s (United Nations Framework Convention on Climate Change) Clean Development Mechanism (CDM), Verra’s VCS, CAR, Gold Standard, and Plan Vivo, and is application programming interface (API)–enabled to allow integration with private-sector systems. However, no government-led initiative or regulatory framework has been disclosed to support API-based integration between national registries, ETS infrastructure, or international carbon market systems. No specific regulations govern trading mechanisms, settlement systems, accounting treatment, market supervision, market conduct, or cross-border transfers, including those related to Article 6 of the Paris Agreement.
A. Infrastructure Framework
- Market Structure: The government is developing its registry system and institutional arrangements to permit ETS allowance auctions.25 An additional private-sector initiative (MexiCOâ‚‚)26 under the Mexican Stock Exchange is available to provide a platform for voluntary transitions between private players.
- Registry Operations: MexiCOâ‚‚ allows for an integrated inventory system that categorizes credits by their status (bought, sold, offset, etc.). The platform is API-enabled, allowing credits to be accessible to buyers worldwide.27
- Data Standards: No formats or interoperability measures are required.
B. Trading and Participation
- Eligibility Rules: Credits traded in MexiCO₂ must be registered under UNFCCC’s CDM, VCS, CAR, Gold Standard, or Plan Vivo.28 To date, no designated authority has been defined to manage PCCM transactions in the ETS.
- Trading Mechanisms: There are no specific regulations on how offsets will be traded.
- Settlement Systems: There is no specific guidance from the government on settlement systems.
- Price Discovery: The Mexican ETS allowances will be sold through an auction system. It is unclear whether the offsets will follow the same scheme once allowed into the ETS.
- Oversight Authority: Market supervision for PCCM transactions is unclear.
- Legal Classification: There is currently no guidance on the appropriate accounting treatment for carbon credits. SEMARNAT equates a carbon credit to one ton of carbon dioxide equivalent captured, reduced, or avoided.29
C. Market Integrity Safeguards
- Anti-Manipulation and Fraud Prevention: There are currently no anti-manipulation or fraud prevention safeguards.
- Transparency and Reporting Requirements: No mandatory disclosure of market data or trading information is required.
D. Financial and Cross-Border Integration
- Financial Regulation Integration: There is currently no integration with securities law or planned regulatory harmonization.
- Cross-Border Trading Framework: There are currently no guidelines for cross-border trading, including potential harmonization with Article 6 transactions.
E. Regulatory Advancement Road Map
- Infrastructure Plans: The MexiCOâ‚‚ platform is API-enabled and allows for integration with private-sector systems to facilitate carbon credit transactions; however, no government-led initiative or regulatory framework has been disclosed to support API-based integration between national registries, the ETS infrastructure, or international carbon market systems.
- International Cooperation: There are no established bilateral agreements or connections with other registries.
- Regulatory Evolution: There is no disclosure on integration with broader financial markets.
- Enforcement Enhancement: There is no disclosure on market conduct and penalty frameworks.
References
- GGCI, El sector agropecuario en el mercado voluntario de carbono en México, Gobierno de México: Secretaria de Agricultura y Desarrollo Rural, 33, 2024, https://www.gob.mx/cms/uploads/attachment/file/958695/Reporte_MVC_sector_agropecuario_.pdf. ↩
- Germany Trade & Invest and DEG KFW Bankengruppe, CDM Market Brief: Mexico, July 2009, https://www.carbon-mechanisms.de/fileadmin/media/dokumente/Publikationen/Laenderprofil/Laenderprofil_2009_CDM_Market_Mexico_eng.pdf. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, ICAP ETS Map, April 2025, https://icapcarbonaction.com/en/ets/mexican-emissions-trading-system. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, 2024, https://icapcarbonaction.com/system/files/ets_pdfs/icap-etsmap-factsheet-59.pdf. ↩
- Ibid. ↩
- SEMARNAT-INECC-GGGI, Mercado voluntário de carbono en México: Caracterización y resultados de en territorio, Instituto Global para el Crescimento Verde, 2024, https://www.gob.mx/cms/uploads/attachment/file/943747/xxxxMercadoVoluntariodeBonosdeCarbono.pdf. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, 2024, https://icapcarbonaction.com/system/files/ets_pdfs/icap-etsmap-factsheet-59.pdf. ↩
- Ibid., 5. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, 2024, https://icapcarbonaction.com/system/files/ets_pdfs/icap-etsmap-factsheet-59.pdf. ↩
- SEMARNAT-INECC-GGGI, Mercado voluntário de carbono en México: Caracterización y resultados de su estudio en territorio, Instituto Global para el Crescimento Verde, 32, 2024, https://www.gob.mx/cms/uploads/attachment/file/943747/xxxxMercadoVoluntariodeBonosdeCarbono.pdf. ↩
- Ibid., 46–55. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, 5, 2024, https://www.gob.mx/cms/uploads/attachment/file/943747/xxxxMercadoVoluntariodeBonosdeCarbono.pdf. ↩
- SEMARNAT-INECC-GGGI, Mercado voluntário de carbono en México: Caracterización y resultados de su estudio en territorio, Instituto Global para el Crescimento Verde, 34–37, 2024, https://www.gob.mx/cms/uploads/attachment/file/943747/xxxxMercadoVoluntariodeBonosdeCarbono.pdf. ↩
- Ibid., 38. ↩
- Ibid. ↩
- Ibid., 37. ↩
- Ibid. ↩
- Ibid. ↩
- Ibid. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, ICAP ETS Map, April 2025, https://icapcarbonaction.com/en/ets/mexican-emissions-trading-system. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, 2024, https://icapcarbonaction.com/system/files/ets_pdfs/icap-etsmap-factsheet-59.pdf. ↩
- SEMARNAT-INECC-GGGI, Mercado voluntário de carbono en México: Caracterización y resultados de su estudio en territorio, Instituto Global para el Crescimento Verde, 2024, https://www.gob.mx/cms/uploads/attachment/file/943747/xxxxMercadoVoluntariodeBonosdeCarbono.pdf. ↩
- Ibid., 37. ↩
- Ibid., 19, 52. ↩
- International Carbon Action Partnership, Mexican Emissions Trading System, 5, 2024, https://icapcarbonaction.com/system/files/ets_pdfs/icap-etsmap-factsheet-59.pdf. ↩
- ICR, “MéxiCO₂,” accessed April 6, 2026, https://www.carbonregistry.com/directory/a56f68d2-3a95-4d5a-8533-be0ec5aaae14. ↩
- ICR, “Management for Climate Projects and Credits,” MexiCO₂, accessed April 6, 2026, https://www.carbonregistry.com/platform. ↩
- MéxiCO₂, Mercados de carbono en México, 5, accessed April 6, 2026, https://www.ema.org.mx/descargas_portalV2/resenas/seminarioGEI/6MEXICO₂.pdf. ↩
- SEMARNAT-INECC-GGGI, Mercado voluntário de carbono en México: Caracterización y resultados de su estudio en territorio, Instituto Global para el Crescimento Verde, 31, 2024, https://www.gob.mx/cms/uploads/attachment/file/943747/xxxxMercadoVoluntariodeBonosdeCarbono.pdf. ↩
