The City of Mexico (CDMX) is set to implement a green tax targeting companies with monthly CO2 emissions exceeding one tonne equivalent. This initiative aims to reduce environmental pollution in the capital by promoting cleaner industrial processes. The tax, expected to generate around 60 million pesos annually, will be applied to approximately 6,000 out of over 100,000 registered businesses.
Tax Details
- Calculation Method: Based on internationally recognized methodologies endorsed by the Intergovernmental Panel on Climate Change (IPCC), with a digital platform featuring a built-in calculator to simplify declaration processes.
- Revenue Allocation: 45% for sustainable mobility, expansion of electric transportation, and cycling infrastructure; 30% for the Basura Cero program (zero waste initiative); 15% for water conservation efforts; and 10% for animal welfare.
Additional Environmental Measures
Alongside the tax, the city government plans to issue green bonds worth about 1.2 billion pesos for sustainable infrastructure projects, expected to launch in September.
Private Sector Response
The private sector has shown supportive stance, with Francisco Cervantes Díaz, President of the Coordinating Council of Employers (CCE), expressing willingness for dialogue and cooperation to enhance practices in transportation, manufacturing, and waste management.
Implementation Timeline
- June 2025: Presentation of the Climate Action Program (2025-2030).
- September 2025: First issuance of green bonds.
- 2026: Introduction of tax credits for companies meeting CO2 reduction targets.
The success of the Green Tax will be measured by its ability to drive structural changes in industrial processes, rather than solely by revenue collection. This initiative aligns with similar measures in 11 Mexican states and the State of Mexico.
