Why Mexico's renewable energy industry will be hoping Harris wins US presidency

With just one week to go before the US presidential election, analysts say that the fate of ambitious plans to make Mexico’s energy sector greener will partly depend on who wins the race to the White House.

Over 80% of Mexico’s primary energy comes from hydrocarbons and only about 12% of its electricity is generated from wind and solar power.

Newly inaugurated President Claudia Sheinbaum has vowed to increase the role of renewable energy, including hydro, to 45% of the country’s electricity system by 2030.

Should Kamala Harris be elected next week, it could be easier for Mexico to mobilize foreign capital, reduce its carbon emissions and meet the 45% target, analysts say. 

Conversely, a Trump presidency might row back on the Joe Biden administration’s support for energy transition projects in the Americas and Trump could give the green light to liquefied natural gas (LNG) proposals in Mexico and other oil and gas projects in the region that have stalled under Biden.

“Harris is much more pro-clean energy and that jives well with Claudia Sheinbaum,” Jorge Mariscal, a professor at the Columbia University School of International and Public Affairs (SIPA) and a former Wall Street banker said Monday in response to a question from BNamericas on a webinar organized by Global Americans. 

“Trump on the other hand is drill, baby, drill. He would be less supportive of clean energies in Mexico,” he added.

“A Harris administration might present more opportunities for renewable energy investment in Mexico,” Diego Marroquin, North America Scholar at the Woodrow Wilson Center, told BNamericas. 

“Under a second Trump presidency, the energy sector's role remains unclear. Energy might fall in priority to more contentious topics like immigration and auto manufacturing.”

USMCA review

One of the top priorities for whoever moves into the White House in January will be the scheduled six-year review of the US-Mexico-Canada Agreement (USMCA) in 2026.

Both candidates have said they will make changes to the free trade deal but have not specified how those changes would affect the energy sector.

Harris was one of 10 senators who voted against the launch of the free trade pact in 2020 on the grounds that it did not go far enough on labor and environmental issues.

“A Harris administration would likely seek to strengthen these pillars in the upcoming USMCA review,” Marroquin said. “Although the exact impact on Mexico’s energy sector is uncertain, it would likely involve more bilateral discussions about Mexico’s rising CO2 emissions and reforms limiting US private investment in the sector.”

The US has been at loggerheads with Mexico about its energy sector since 2022, when the US requested dispute settlement consultations.

The US says Mexico is undermining US energy companies in favor of Mexico’s state-owned electrical utility CFE and national oil and gas company Pemex.

Constitutional reforms approved by Mexico this October have further cemented CFE’s dominance of the electricity market and appear to conflict with USMCA.

“This policy undermines US and Canadian economic interests, particularly for energy companies,” Marroquin said. “Canadian and US firms have invested over US$34bn in Mexico’s energy sector, including significant commitments to renewable energy.”

The ratchet clause of USMCA says that a country cannot roll back measures which have opened a sector to foreign competition and investment.

For his part, Trump has said that he wants to renegotiate USMCA and impose tariffs on cars and other imports from Mexico but has not detailed his plans for the energy sector.

Different styles

The differences between the two candidates' attitudes to Mexico and its energy sector will be as great in style as in substance.

One energy consultant noted that Harris, like Sheinbaum, would be her country’s first female president if elected.

He told BNamericas he expected the two to strike up a strong rapport and increase momentum for green energy. It would be hard to see Sheinbaum and Trump getting along so well, he added.

Meanwhile, Marroquin expects Trump to deploy his trademark hands-on style to Mexican affairs if he is voted back to the White House next Tuesday. 

“Based on the 2016-20 period, we can infer that another Trump administration would deprioritize North American bilateral and trilateral fora and institutions, handling issues instead through direct, executive-level negotiations,” he said.