Informing Mexico’s climate policies  

Mexico is at a pivotal moment in its energy and climate policy development. Following the arrival of a new administration in October 2024, the country has increased its climate ambitions and begun reassessing its long-term strategy to better align with the objectives of the Paris Agreement.

To support this process, the National Institute of Ecology and Climate Change (INECC), in collaboration with the Danish Energy Agency (DEA) under the Energy Partnership Programme III, developed an analytical framework centred on the TIMES-Mexico (TMX) model. Developed with E4SMA as technical partner, the model represents the full Mexican energy system from fuel supply to end-use sectors including agriculture, industry, residential, services, and transport. The framework is complemented by the Balmorel-Mexico model for detailed electricity system analysis. 

The modelling supported the development of Mexico’s enhanced climate targets under NDC 3.0, published in November 2025, including the assessment of emissions pathways toward the 2035 targets. Several scenario families were analysed, including a Least-Cost Reference scenario reflecting existing and announced policies, Net-Zero scenarios with alternative target years (2050, 2055, and 2060), and a Paris-aligned carbon budget scenario consistent with a 2°C global temperature limit. 

The analysis shows that carbon neutrality in Mexico is technically feasible but requires a structural transformation of the energy system. Electrification emerges as the central decarbonisation pillar, supported by rapid expansion of renewable electricity, grid infrastructure, and storage. While buildings can approach near-zero emissions through electrification, industry and transport require complementary solutions such as alternative fuels and carbon capture technologies.