Mexico E-Fuel Market Overview, 2029

The development of Mexican e-fuel, otherwise referred to as synthetic fuel, has been moving slowly but steadily. Historically dependent on oil, Mexico started searching for alternative energy solutions towards the early 2000s due to issues related to the environment and its necessity to diversify energy sources. E-fuel became part of the alternatives that Mexico used in pursuit of its climate targets before International climate change commitments under the Paris Agreement. Mexico started the collaboration in international stakeholders to start up research and development of e-fuels in the 2010s, as it has enormous renewable energy potential-including withered and solar. In the recent years, major energy companies invested much in pilot projects, and Mexico continues aligning its e-fuel initiatives with the global energy transitions. The General Law on Climate Change sets national goals in terms of the reduction of greenhouse gases, which promotes the use of cleaner fuels such as e-fuels. The Energy Transition Law promotes renewable energy, and the production of e-fuel will be stipulated. Pemex, the national oil company, needs to comply with regulatory frameworks due to the Hydrocarbons Law that now includes alternative fuels. International standards, such as the International Energy Agency (IEA), further support the regulatory framework of Mexico over e-fuels. The country is among the foremost in the development of e-fuels due to abundant renewable energy sources. High solar and wind potential make the country a perfect platform for producing e-fuels in a sustainable way, displacing several other countries having a lesser capacity of renewable. Apart from that, the strategic geographic location of Mexico in terms of distribution has been significant, which is close to the U.S. market and shipping routes. Government policies had been proactive in Mexico. There had been increasing foreign investments, making it a key player in Latin America concerning innovation in e-fuel that can give it an edge over other countries in the region. According to the research report "Canada E-Fuel Market Overview, 2029," published by Bonafide Research, the Canada E-Fuel market is anticipated to grow at more than 25% CAGR from 2024 to 2029. Technological advancements, especially in power-to-liquid processes, are transforming e-fuel production, enhancing efficiency, and reducing costs driving the e-fuels market in Mexico. The compatibility of e-fuels with existing infrastructure and their ability to cater to long-haul transport needs are key drivers of e-fuels market adoption. Corporate commitments to sustainability, with many integrating e-fuels into their strategies, are supporting market growth. These factors forecast a promising path for the e-fuels market in Mexico, leading to a more sustainable future in the energy sector through continued innovation and expansion. In Mexico, the rising demand for sustainable Aviation Fuels (SAFs) reflects a global shift towards greener practices in the aviation industry. These fuels, derived from renewable sources such as plant oils, algae, and waste biomass, offer a significant reduction in lifecycle greenhouse gas emissions compared to conventional jet fuels. Several key factors driving the growing demand for SAFs include, Environmental imperatives, government initiatives, industry commitment, advancements in technology, and increased production capacity drive the e-fuels market in Mexico. SAFs offer substantial benefits, including a significant reduction in greenhouse gas emissions, sourcing from renewable materials contributing to a circular economy, compatibility with existing aircraft engines, and performance similar to traditional jet fuels. As consumers become more aware of air quality and environmental issues, the need for sustainable energy alternatives such as the product is increasing. For example, in areas with high air pollution, such as urban or industrial areas, consumers may increasingly choose electric vehicles instead of traditional gasoline or diesel. This change could result in reduced emissions of dangerous pollutants such as particulate matter and nitrogen oxides, improving local air quality and public health.

In the Mexico E-Fuel Market, E-kerosene, also known as synthetic aviation fuel, is leading the segment by type. This is primarily due to the growing demand for sustainable aviation fuel driven by the international commitments to reduce greenhouse gas emissions from the aviation sector. Mexico's strategic location as a hub for international flights makes it a significant market for E-kerosene. The Mexican government's supportive policies and initiatives to promote the use of cleaner fuels have contributed to the growth of this segment. E-diesel is another notable segment, with its usage predominantly in the transportation sector, particularly in buses and trucks. The Mexican government's push for cleaner public transportation and the country's extensive road freight industry have driven the demand for E-diesel. The growth of this segment is somewhat tempered by the slower adoption rate of e-diesel in private vehicles. E-gasoline, while available, has seen slower growth compared to E-kerosene and E-diesel. This is largely due to the dominance of conventional gasoline in the passenger vehicle segment, which is the primary mode of transport for most Mexican people. The existing infrastructure for gasoline and the slower transition to electric and hybrid vehicles have hindered the widespread adoption of E-gasoline. E-methanol is a growing segment, driven by its potential as a cleaner alternative for various applications, including fuel cells and as a blending component for gasoline. The growth is supported by Mexico's efforts to diversify its energy mix and reduce dependence on fossil fuels. Other hydrocarbons, such as renewable propane and butane, make up the remaining segment of the market. These are used in various applications, including heating and cooking, but their market share is relatively small compared to the other E-fuel types. Hydrogen technology with Electrolysis is the leading segment in the Mexico E-Fuel Market. This is because, above all, the demand for green hydrogen is rising fast due to its clean source status. Electrolysis is the technique where a chemical reaction splits water into hydrogen and oxygen applying electrical energy. It is one of the fundamental technologies for producing low emission hydrogen and renewable energy sources, like solar or wind power, for its generation. Abundance in the supply of renewable energy, supporting government policies to reduce greenhouse gas emissions, and growing this segment have largely contributed to growth in the segment. Reverse-Water-Gas-Shift is a rapidly growing segment in the Mexico E-Fuel Market. This technology takes carbon dioxide and hydrogen and converts them into carbon monoxide and water. It can often be used in combination with many other technologies like FT in order to enhance the overall efficiency of the e-fuel production process. The growth of the RWGS segment is driven by the technology's potential to reduce the carbon footprint in the production of e-fuel using captured carbon dioxide, but is still in its development and demonstration phases, so has not penetrated the market as much as electrolysis. Fischer-Tropsch, or FT, is another significant market segment. In the FT process, liquid hydrocarbons are formed from a feed of mixtures of carbon monoxide and hydrogen. These can then be manufactured into various types of fuel. The increase in the FT segment is driven primarily by the high-quality, low-sulfur fuels that meet stringent environmental regulations. In the Mexico E-Fuel Market, the Transportation segment is leading by application. This is primarily due to the increasing demand for cleaner and more sustainable fuels to reduce emissions from the transportation sector, which is a significant contributor to Mexico's overall greenhouse gas emissions. The growth of the Transportation segment is driven by several factors, including the Mexican government's supportive policies and initiatives to promote the adoption of e-fuels in aviation, road transport, and marine sectors. The growing awareness and commitment from both public and private entities to reduce their carbon footprint have further boosted the demand for e-fuels in transportation. The Industrial segment is growing, driven by the increasing need for cleaner fuels in various industries such as manufacturing, chemicals, and steel production. E-fuels provide a viable alternative to traditional fossil fuels, helping industries reduce their carbon emissions and meet their sustainability goals. The growth of this segment is supported by Mexico's industrial policies that encourage the transition to cleaner energy sources and the increasing pressure on industries to adopt more environmentally friendly practices. Power Generation is another notable segment in the Mexico E-Fuel Market. E-fuels can be used to generate electricity, providing a flexible and cleaner alternative to conventional power sources. The growth of this segment is driven by the increasing demand for reliable and sustainable power generation, particularly in remote or off-grid areas. The others segment includes various applications such as heating, cooking, and other specialized uses. This segment is relatively small compared to Transportation and Industrial, but it is growing as the demand for cleaner energy sources expands into different areas.

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Manmayi Raval

Research Consultant

Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • E-fuels market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By End-use • Aviation • Marine • Industrial • Railway • Automotive • Others

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By Application • Transportation • Industrial • Power Generation • Others By Type of E-fuel • E-kerosene (Synthetic Aviation Fuel) • E-diesel • E-gasoline • E-methanol • Other Hydrocarbons By Technology • Hydrogen technology (Electrolysis) • Fischer-Tropsch • Reverse-Water-Gas-Shift (RWGS) The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the E-fuels industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry. ?