This best prospect industry sector includes water technologies, waste management, recycling, air pollution control, and emissions control. These sectors are important due to water scarcity, air pollution, and the increase in solid waste due to urban growth. This summary includes a market overview and trade data.
Overview
The environmental technologies and water markets in Mexico are projected to grow over the next few years because of a strong need for infrastructure in the water sector and the need for innovative solutions for solid waste management. Many environmental challenges in Mexico can be addressed with the use of technologies and modernization projects that will offer business opportunities for U.S. companies in the coming years. The sector is competitive and U.S. firms must offer compelling, cost-effective solutions.
Water
Mexico, a country of 139 million people, has been struggling to meet the demand for water by agriculture, industry, and citizens as rain patterns change due to climate and drought. Aquifers are drained and cannot recharge due to increased urbanization, and wastewater systems cannot handle the volume of wastewater that the country produces.
According to Mexico’s National Water Commission (Comisión Nacional de Agua or CONAGUA), Mexico has ten major rivers, more than 180 dams, and 4,820 small reservoirs: a total of 984 potable water treatment plants, 2,540 municipal wastewater treatment plants, and 3,144 industrial wastewater treatment plants. CONAGUA officials and water authorities in major urban centers recognize that there is a need to upgrade the existing infrastructure that has been operating at 45 percent capacity over the last two years due to the lack of projects. CONAGUA’s authorized budget for 2022 was USD 2 billion, ten percent of which has been allocated to small projects to improve the existing infrastructure in major cities such as Monterey, Guadalajara, Tijuana, Reynosa, Ciudad Juarez, Tampico, Veracruz, Villahermosa, Merida, Los Cabos, Tapachula, Puebla, Toluca, Queretaro, San Luis Potosi, Oaxaca, Morelia, Hermosillo, and others.
CONAGUA officials and state and local authorities expect to execute a budget of over USD 3 billion dollars in 2023 to upgrade the existing infrastructure and to announce potable and municipal wastewater treatment plants. Sources in the private sector (Consejo Coordinador Empresarial or the Business Coordinating Council) recently commented that major manufacturing companies are contemplating investments of over USD 500 million in equipment and services for industrial wastewater treatment plants between 2023 to 2025 to meet new industrial effluent discharge standards.
The World Bank, the Inter-American Development Bank, the International Boundary and Water Commission (IBWC), and BANOBRAS (Mexico’s Public Works Bank) are already executing water and wastewater projects in the northern and central states of Mexico and have plans to continue investing in water projects between 2023- 2025 in partnership with Mexican water contractors.
Mexico City
Situated in the Valley of Mexico over a mile above sea level, Mexico City is one of the world’s largest cities, with nearly 22 million people living in an area of approximately 3,000 square miles. The city is built atop the lakebed of Lake Texcoco, which the Spanish largely drained following their conquest of the Aztec Empire in 1521. Since that time, the city has suffered from flooding, poor drainage, and water supply issues. Mexico City has no large-scale operation for recycling wastewater or collecting rainwater and expels nearly 200 million gallons annually through an overwhelmed sewer system.
The city imports forty percent of its water from remote sources via an energy intensive system that pumps water up over the mountains surrounding the city and back into the valley below. It then loses forty percent of that water to leaks in or pilferage from the 8,000 miles of pipes that deliver the water to end users. Experts estimate that twenty percent or more of the city’s residents lack a reliable water source. Many of the city’s poorer residents often rely on tanker trucks or “pipas” to deliver water, often at a higher price than municipal delivery.
The Mexico City water authority indicates that the city has 63 potable water treatment plants and 30 municipal wastewater treatment plants that would need to be upgraded during the next five years.
Monterrey
Located in the northern state of Nuevo Leon, Monterrey is Mexico’s third-largest city with a population of approximately 1.5 million. In summer 2022, the city illustrated the severity of Mexico’s water crisis. Three of the reservoirs that provide much of the city’s water dried up, leaving some five million people in Monterrey and the surrounding region without water for up to 75 days. The local government spent USD 82 million to rent more pipas to distribute water, pay additional drivers, and dig more wells. The government uses pipas to deliver nine million liters of water daily to 400 neighborhoods, many of them illegal settlements that are home to the poorest residents.
In response to the crisis, the state government is investing USD 97 million to construct a new wastewater treatment plant and plans to buy water from a desalination plant in neighboring Tamaulipas State. In May 2022, the Governor of Nuevo Leon unveiled plans to spend USD 125 billion to ensure water security for the region through 2050.
However, investing in new water sources and infrastructure is not enough. Monterrey and Nuevo Leon will need to curb demand for water by agriculture and industry, which are the largest consumers of water in the region.
The State of Nuevo Leon water authority indicates that the state has 12 potable water treatment plants, 56 municipal wastewater treatment plants, and over 900 industrial wastewater treatment plants that would need to be upgraded during the next five years.
Guadalajara
Guadalajara is the capital city for the State of Jalisco with a population of over four million people (62 percent of the total population for the state). Some neighborhoods in the city of Guadalajara experience intermittent water pressure and occasional loss of all water access for up to two days.
According to information provided by the state of Jalisco water authority’s monitoring stations, the major source of surface water for the state is Lake Chapala, located to the south of the city. The lake collects chemicals and pesticides (toxic wastes) that are disposed in rivers by manufacturing, agrobusiness, and pharmaceutical companies installed in industrial parks in the State of Michoacan, State of Mexico and the state of Jalisco. The reservoir at the Calderón Dam, another significant supply of potable water near Guadalajara, has recently recovered from a major loss of water and stocked fish and has spent the last year at nearly 100 percent capacity. This has helped the local tourism and seafood industries but concerns about pollution and low water levels will remain as water demand continues to increase. Potential opportunities to sell services and industrial wastewater treatment also exist with companies installed in industrial parks in Michoacan and the State of Mexico.
The state of Jalisco operates 48 potable water treatment plants, 130 municipal wastewater treatment plants, and over 600 industrial wastewater treatment plants that would need to be upgraded within the next five years.
The market for the water and wastewater sub-sectors in Mexico is expected to increase 1.8 percent from 2022-2023. U.S. exports account for approximately seventy percent of Mexico’s imports in the water and wastewater sub-sectors. The main water challenges in Mexico are over-exploitation, inadequate infrastructure, drought, and contamination of water resources. CONAGUA sources report that nine million people do not have access to potable water, and 11 million are not connected to sewage lines. To address these issues, as part of the National Water Plan (Programa Nacional Hídrico or PNH) for 2020-2024, the federal government seeks to modernize the country’s infrastructure through public policies and other new initiatives, such as systems to measure consumption and improve water management in urban and agricultural areas of the country.
(Figures in USD Billions)
|
|
2020 |
2021 |
2022 |
2023 (Est.) |
|
Total Local Production |
1.20 |
1.21 |
1.22 |
1.23 |
|
Total Exports |
1.51 |
1.52 |
1.55 |
1.58 |
|
Total Imports |
3.94 |
4.00 |
4.08 |
4.16 |
|
Imports from the U.S. |
2.42 |
2.48 |
2.60 |
2.65 |
|
Total Market Size* |
3.63 |
3.72 |
3.74 |
3.81 |
|
Exchange Rates |
20.20 |
20.28 |
20.12 |
18.40* |
*Total market size = (total local production + imports) – exports
Source: Central Bank of Mexico (Banxico), World Bank, Mexican Water Technology Institute (IMTA,), National Bank for International Trade (BANCOMEXT), Secretariat of Economy, International Boundary Water Commission (IBWC), National Water Commission (CONAGUA), Mexico City Water System, and interviews with importers, distributors, and end users of water and wastewater equipment and services
Waste Management and Air
The market for environmental technologies in Mexico is estimated to increase by 2.6 percent from 2022 to 2023, while exports from the United States to Mexico are expected to be 67.4 percent of the total imports market over the same period.
The Secretariat of Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales or SEMARNAT) is the federal entity in charge of the laws, standards, programs, and initiatives that shape the environmental sector in Mexico.
One example of the initiatives from SEMARNAT, was the General Law on Climate Change (Ley General de Cambio Climático), which was last updated in 2018, and it serves as the national guide for climate change policy in Mexico. In accordance with the General Law for the Prevention and Comprehensive Management of Waste (known as LGPGIR), the federal government is responsible for formulating, conducting, and evaluating the national policy on waste, as well as preparing the National Program for the Prevention and Comprehensive Management of Solid Waste Management (known as PNPGIR) and the National Program for the Prevention and Comprehensive Management of Special Handling Waste (known as PNPGIRME).
The 2022-2024 PNPGIRME establishes the following objectives:
- Generate information that allows for decision making on how to handle waste;
- Promote the prevention, adequate handling, and recycling of waste;
- Develop a legal framework for handling waste.
SEMARNAT is also responsible for management programs to improve air quality, known as ProAire, to prevent and correct the deterioration of air quality in major cities in Mexico.
In Mexico, there are 29 ProAire programs that cover 27 federal entities and serve a population of 105.2 million inhabitants.
The objectives of the ProAire programs are:
- To promote the participation of the three levels of government (federal, state, municipal) with industry, academia, and civil society to find solutions to air pollution challenges;
- To generate a diagnosis of the causes that affect air quality in specific areas of study and identify the main sources of emissions;
- To determine measures and actions focused on reducing emissions, strengthening institutions, protecting public health, and improving environmental education.
Table 2: Environmental Technologies: Air, Waste Management, Recycling
(Figures in USD Billions)
|
|
2020 |
2021 |
2022 |
2023 (Est.) |
|
Total Local Production |
1.85 |
1.87 |
1.90 |
1.92 |
|
Total Exports |
0.85 |
0.86 |
0.87 |
0.88 |
|
Total Imports |
2.72 |
2.77 |
2.83 |
2.88 |
|
Imports from the U.S. |
1.77 |
1.80 |
1.89 |
1.94 |
|
Total Market Size* |
3.72 |
3.78 |
3.86 |
3.92 |
|
Exchange Rates |
20.20 |
20.28 |
20.12 |
18.40* |
*Total market size= (total local production + imports) – exports
Source: Central Bank of Mexico (Banxico), National Bank for International Trade (BANCOMEXT), Mexican Secretariat of Economy (SE), Mexican Secretariat of Environment and Natural Resources (SEMARNAT), Mexican Congress (Cámara de Diputados), Mexican Tax Authority (SAT), Mexican Geography and Statics Institute (INEGI), U.S. International Trade Administration, World Bank, International Monetary Fund, Organization for Economic Cooperation and Development, United Nations, Business Monitor, World Trade Atlas, bank reports and interviews with importers, distributors, and end users of air, waste management and recycling equipment and services
Leading Sub-Sectors
The leading sub-sectors for U.S. companies are in water resources equipment and services and environmental technologies, such as suspended solids removal, biological treatment, disinfection/oxidation technologies, reverse osmosis treatment, water pumps, valves, aerators, odor control equipment, data collection software and hardware, test equipment, calibrators, actuators, pipe and fittings, and supervision engineering services, solid waste management (including technologies to treat bio-hazardous waste), recycling, air pollution control, and emissions control equipment. U.S. products and services are considered competitive in the Mexican market due to quality, post-sale services, and guarantees offered by U.S. companies.
Opportunities
Upgrading of Municipal Wastewater Treatment Plants
According to CONAGUA and the Secretariat of Agriculture and Rural Development (Secretaría de Agricultura y Desarrollo Rural or SADER), in 2023 and 2024 the Government of Mexico will continue upgrading existing municipal wastewater treatment plants that are in over 1,400 municipalities, including Mexico City and in the states of Guerrero, Oaxaca, Veracruz, Tabasco, Coahuila, Sonora, Sinaloa, Chiapas, and in Mexican border cities such as Tijuana, Mexicali, Ciudad Juárez, and Reynosa. The estimated budget projected by CONAGUA for the projects is USD 500 million.
Upgrading of Potable Water Treatment Plants
In 2022 and 2023, CONAGUA, in collaboration with the World Bank, Mexico City Water Authorities, and the International Boundary Water Commission, will upgrade potable and municipal wastewater plants in Mexican border cities and the Cutzamala water system, and will strengthen the management of groundwater resources in the Valley of Mexico. Additional water projects will be completed in the states of Puebla, Coahuila, Durango, Baja California, and Baja California Sur. International tenders will be published in Mexico’s Official Gazette to invite companies to participate in projects to be financed by the World Bank and the North American Development Bank in U.S. and Mexican border cities. Some of the projects include upgrading existing potable water treatment plants; building two desalination plants for the cities of La Paz and Los Cabos in the state of Baja California Sur; rehabilitating the Ensenada Desalination Plant; building a municipal wastewater treatment plant in Tijuana; building a Rio Colorado-Tijuana Aqueduct, and cleaning the Grijalva River in the city of Villahermosa, Tabasco. The estimated budget projected by CONAGUA in its 2021-2024 National Water Plan is USD 960 million.
Other Opportunities: Engineering services, design, and construction services
Feasibility studies; equipment for potable, municipal, and industrial wastewater treatment such as CAD software, water filtration, pumps, leak detection software and instruments, belt filter pressers, vacuum filters, arsenic, uranium and radium removal systems, automatic strainers, UV water purification systems, water testing products, water softeners, ultrapure water systems, aeration blowers, compressors, mechanical and digital scanners, volumetric feeders, filters, chemical metering pumps, pumping systems, reverse osmosis systems, remote monitoring, coolers and deionized treatment systems, purification equipment, and carbon filters.
Technologies for Waste Management and Recycling
In Mexico, the main sources of waste are: 1) solid urban waste from municipalities; 2) special handling waste from health services, agricultural activities and fisheries, residual sawmill forest and livestock biomass, wastewater treatment, transportation, construction, and from technology, batteries, tires, and manufactured products at the end of their life cycle; 3) hazardous waste from various industrial and commercial activities, medical waste, polychlorinated biphenyls (also known as PCBs); and 4) waste from the oil and mining industries.
In 2020, per capita generation of urban solid waste in Mexico was estimated at 0.944 kg per inhabitant per day and the total generation in the country is estimated at 120,128 tons per day. In terms of the classification of solid urban waste, 31.56 percent corresponds to waste susceptible to use, 46.42 percent to organic waste, and 22.03 percent to other types of waste. Of the waste generated, 100,751 tons per day are collected, which equates to a national coverage of 83.87 percent.
In terms of the transfer of waste, there are approximately 26,615 collection vehicles, of which 59.3 percent have compaction systems. Twenty-nine percent of those vehicles are models prior to 1995 with at least 24 years of operation. The transfer of waste in Mexico is done in 127 facilities, located in 112 municipalities of 23 states, 49 percent of which are in municipalities with population of more than 100,000 inhabitants.
There are 173 solid waste collection centers in operation in the country in 63 municipalities in 19 states. The separation of waste is done in 144 municipalities in 23 states, including in 16 locations in Mexico City. Approximately 5,281 tons of separated waste (organic and inorganic) are collected daily, which accounts for around five percent of the total waste collected in the country. From the separated waste collected in Mexico, 2,062 tons correspond to organic waste and 3,219 tons correspond to inorganic waste. There are 47 waste treatment plants in which the processes of separation or recycling, crushing, compaction, composting, and biodigestion are performed.
There is a Mexican technical regulation for hazardous waste (NOM 87), which establishes the guidelines for the separation, packaging, storage, collection, transportation, treatment, and final disposal of hazardous waste. In July 2022, SEMARNAT published an updated list of companies authorized to provide hazardous waste management services that comply with Article 42 of the General Law for Prevention and Comprehensive Management of Solid Waste.
There is a global need for advanced technologies to tackle environmental challenges derived from solid waste management, services, and with authorized companies that treat hazardous waste.
Emissions Control
The National Emissions Registry (Registro Nacional de Emisiones or RENE) is an instrument that was developed by SEMARNAT under the 2012 General Law on Climate Change in Mexico. The objective is to compile information on the emissions and greenhouse gases from specific industries. Companies that belong to the energy, manufacturing, transportation, agricultural, waste, business, and services industries, which have direct and indirect emissions of greenhouse gases or compounds from all their facilities that exceed 25,000 tCO₂e (tons of CO₂ equivalent), must follow a process to register and comply with an emissions report through a platform known as RENE Version 3.0. The emission calculator was updated on March, 2023.
For electrical transportation, the Energy Regulatory Commission notified SEMARNAT that the emission factor of the National Electrical System for the calculation of indirect greenhouse gas emissions for electricity consumption corresponding to the year 2022 is 0.435 tCO2e/MWh.
The reporting of emissions from industries to the government also helps to make companies more aware of their impact on the environment. This creates an area of opportunity for U.S. technologies, as some of these companies are interested in adopting specific measures and utilize technologies, products, and services, to manage their activities in a more sustainable and efficient way that reduces their carbon footprint.
Resources
|
Secretariat of Environment and Natural Resources (SEMARNAT) |
|
|
National Water Commission (CONAGUA) |
|
|
National Institute of Ecology and Climate Change (INECC) |
|
|
Attorney General for Environmental Protection (PROFEPA) |
|
|
Mexican Institute of Water Technology (IMTA) |
|
|
National Bank for Public Works (BANOBRAS) |
|
|
North American Development Bank (NADBANK) |
|
|
National Council of Industrial Ecologists of Mexico (CONIECO) |
|
|
National Association of Water and Sanitation Companies of Mexico (ANEAS) |
|
|
Mexico City Secretariat of Environment (SEDEMA) |
|
Events
- The Green Expo-Aquatech, September 5-7, 2023. Mexico City
- WEFTEC, September 30-October 4, 2023. Chicago, IL
- Waste Expo, May 6-9, 2024. Las Vegas, NV
Contacts
For more information on the environmental technologies and water sectors in Mexico, please contact:
Francisco Cerón
Commercial Specialist, Water
U.S. Commercial Service —Mexico City
Tel: +52 (55) 5080-2000 ext. 5211
Claudia Salgado
Commercial Specialist, Environmental Technologies
U.S. Commercial Service —Mexico City
Tel: +52 (55) 5080-2000 ext. 5224