Comision Federal de Electricidad (CFE)

CFE has stated an aim to reduce its emissions intensity by 42%, from 530 g/kWh hour in 2019 to 308 g/kWh by 2024. While this signifies a step forward, having had no emissions targets in the past, it is not clear from company disclosure which scope of emissions or business operations it applies to. The company should seek to formalise the target, with clear descriptions of scope. Moreover, it should establish more ambitious long-term targets to achieve net-zero, with this target acting as an intermediary target to drive near-term action.

CFE’s locked-in emissions, from its installed and planned electric power plants up to 2035, are projected to exceed its carbon budget by approximately 69%. There is no evidence that the company plans to completely phase out coal. The company’s Petacalco coal power plant has an expected lifetime of at least 12 years, with one unit that came online in 2010, expected to extend far beyond this up to 2050. Despite a reduction in coal generation in favour of increasing gas, which has led to a reduction in emissions intensity between 2015 and 2020, its coal capacity has remained constant. CFE should commit to replace any retired fossil assets with renewable capacity and schedule the early closure of its coal assets.

CFE is unlikely to achieve its target to reduce emissions and increase hydroelectric electricity generation without significantly improving its climate governance. As a state-owned company, it is committed to complying with Mexico’s General Law on Climate Change to achieve 35% low-carbon generation share by 2024. However, there is no evidence that the company has strategic mechanisms or low-carbon investment plans in place to achieve this goal. To improve its low-carbon alignment, the company should develop a low-carbon transition plan and implement board-level climate governance to oversee its delivery.

CFE aims to reduce emissions intensity by 42% by 2024, compared to 2019. However, the company does not describe the scope or the business activities the target covers. As a state-owned company, it has committed to comply with Mexico’s General Law on Climate Change, which requires a low-carbon generation share of 35% by 2024.

CFE has made general statements on expanding clean energy projects, such as increasing hydroelectric generation by 530 MW by 2025. But it has not implemented a low-carbon transition plan to drive the business towards low-carbon alignment. It is unclear how CFE plans to achieve its objectives.

In 2020, low-carbon electricity sources accounted for just 26% of total generation. Gas generation represented approximately 80% of fossil-fuel generation, with the remaining 20% being coal.

Between 2015 and 2020, CFE’s coal generation decreased, but was replaced by gas. This resulted in a small reduction in the company’s emissions intensity of approximately 2% per year on average, only a fifth of what is required by its 1.5°C pathway. The proportion of low-carbon electricity generation has remained constant.

Despite positive steps in developing an emissions target and planning to increase low-carbon hydroelectric capacity, without a low-carbon transition plan or clear climate governance structure in place, there is no indication that CFE can achieve rapid decarbonisation.