Mexico City Leads Circular Economy 2023/08/24

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By Fadlala Agabani*

Mexico City has the first regulatory framework in the country to promote the circular economy. Claudia Sheinbaum On February 28, 2023, the Decree Promulgating the Capital’s Circular Economy Law was issued. This is to lay the foundations for sustainable economic growth and to address the challenges posed by climate change, biodiversity loss, increased waste and pollution. In simple terms, a circular economy is one that preserves the value and useful life of goods, materials and resources associated with the production, distribution and consumption of goods and services. It is supported by the repurposing and reuse of materials, secondary raw materials and by-products, while preventing waste generation.

Among the main objectives of the law of interest to the commercial sector are: 1) promoting the adoption of responsible consumption habits among residents of Mexico City; 2) promote sustainable business models by promoting sustainable production through redesign, reduction, reuse, repair, restoration, remanufacturing, recycling and recovery; and 3) facilitating the production chain of MSMEs and large enterprises. In the application of the law, at least six dependencies of the Mexico City government, led by Sedema and mayors, participate.

For Sedeco, the law establishes 10 specific attributes in its article: 1) promoting markets for secondary raw materials, improving the production chain; 2) promoting business models with circular criteria, through support mechanisms for the business sector; and 3) promoting food banks in public markets and other distribution centers in the city. In this sense, to date, important advances have already been made in Central de Abasto with the ITACATE food collection and recovery center, the bioadditive production plant and anaerobic biomass digestion to produce biofertilizers.

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To make a transition towards a circular economy, the law establishes three public policy instruments: 1) circular assessment: companies voluntarily submit their products or processes to assessment to determine the degree of compliance with circularity criteria; 2) Exclusivity of the circular: Companies subject to assessment and having compliance levels have three years of validity on their products or processes. and 3) Circular Economy Plan: strategic planning tool with objectives, axes, action lines, methodology and monitoring and evaluation indicators. In addition, a circular economy is envisioned for the creation, recording, organizing and dissemination of public information systems.

Mexico City already has a long way to go to create a circular economy. According to AC ECOCE, 20 years ago only 8% of PET containers were recycled. Today, the recycling percentage is 59%, which means that out of every 10 containers, six have already been recovered. This is thanks in part to the 1,827 economic units dedicated to the business, management, collection, collection, recovery and treatment of waste in capital, of which 94% are small enterprises. Sedeco conducts tax regularization days to promote SAT’s new simplified trust regime (RESICO). Also, starting in 2021, Latin America will have the largest and most modern transfer station and screening plant for the recycling and utilization of municipal solid waste. Thus, Mexico today leads the Americas in PET recovery, ahead of Brazil, the United States and Canada.

As the first of its kind nationally and the first in the world, CDMX has once again stood out as a hub of ideas and good practice. Although its jurisdiction is limited to 16 municipalities, the implementation of the law is a federal regulation and will inspire other federal agencies, such as Oaxaca, to act on an initiative. Mexico City’s Circular Economy Act will also encourage other countries to resist overexploitation of natural resources, reduce waste, and create wealth from it. Finally, creating a circular economy is synonymous with creating environmentally sustainable and socially responsible economic growth.

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*Secretary of Economic Development of Mexico City.

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