New Legal Framework to Promote the Circular Economy in Mexico

This new regulatory framework redefines the obligations of the authorities, the productive sectors, and waste generators, moving from a linear model of production and consumption toward a scheme oriented to waste prevention, the efficient use of resources, reuse, recycling, and the recovery of materials, under criteria of environmental sustainability, extended responsibility, and inter-institutional coordination. I. General Law on the Circular Economy The General Law on the Circular Economy (LGEC) establishes the legal framework for the adoption of a sustainable model of production and consumption, aimed at extending the useful life of products and optimizing the use of materials. To this end, it defines the objectives, principles, and scope of application of the circular economy, incorporating technical and public policy criteria applicable to production processes and waste management. Key principles, criteria, and definitions. The LGEC incorporates guiding principles of the circular economy, among which the following stand out: sustainable development of a restorative and regenerative nature, efficiency in the use of resources, and the extension of the economic value of materials within the economy, orienting production processes toward more sustainable and efficient schemes. Likewise, it introduces key technical definitions—such as circular design, life cycle analysis, secondary raw material, and circular utilization—and incorporates circular economy indicators, including the carbon and water footprint, which will serve as the basis for measuring performance, designing public policies, and eventually imposing sector-specific regulatory obligations. National Circular Economy System and Program. The LGEC creates the National Circular Economy System as the coordination mechanism among the Federation, the states, and the municipalities for the implementation of public policy on the matter. Likewise, it entrusts the Ministry of the Environment and Natural Resources with the preparation of the National Circular Economy Program, which will establish objectives, strategic axes, targets, and indicators to guide the transition toward a circular economic model at the national level. Extended Producer Responsibility and obligations of the productive sector. The LGEC incorporates Extended Producer Responsibility as a central axis of the new regulatory model, attributing to producers and importers the responsibility for their products throughout their entire life cycle. Under this scheme, the productive sectors must organize, implement, and, where applicable, finance circularity systems, including the recovery, valorization, and reincorporation of materials, as well as the integration of secondary raw materials into their value chains. Distinctions, incentives, and environmental auditing. The Law provides for the creation of the National Circular Economy Distinction as a recognition mechanism for products and processes that comply with circularity criteria, which may generate competitive advantages, even in public procurement procedures. Additionally, circular economy auditing is incorporated as a voluntary verification instrument. Entry into force and subsequent regulatory development. Although the LGEC came into force on January 20, 2026, its practical application will largely depend on the issuance of secondary provisions, including its Regulations, the National Circular Economy Program, and various general agreements. In this context, the implementation of the new regime will be progressive, but it already requires advance preparation on the part of companies. General agreements for the implementation of Extended Producer Responsibility. The specific obligations regarding Extended Producer Responsibility will materialize through general agreements to be issued by the environmental authority, which will define the products subject to this regime, the quantifiable targets, the compliance deadlines, the technical indicators, and the direct or indirect compliance schemes. These instruments will constitute the main regulatory front for the industry regarding the circular economy over the coming years. Coordination with the LGPGIR and management plans. The entry into force of the LGEC does not replace the management plans provided for in the LGPGIR; however, it introduces a new regulatory standard that will require their progressive alignment with the principles of the circular economy, particularly regarding valorization, traceability, and shared responsibility. In practice, Circular Management schemes may coexist with management plans. Inspection, compliance, and sanctioning regime. Although the LGEC does not establish an autonomous sanctioning regime, its noncompliance may give rise to infractions under the LGEEPA and the LGPGIR, including fines, corrective measures, and suspension of activities. Once the secondary provisions are issued, a strengthening of inspection and verification activities by the environmental authority is foreseeable, especially in priority or waste-generation-intensive sectors. II. Amendment to the General Law on Ecological Balance and Environmental Protection The amendment to the General Law on Ecological Balance and Environmental Protection (LGEEPA) expressly incorporates the circular economy approach into the environmental legal framework, establishing it as a binding regulatory parameter for the use of natural resources and the development of economic activities, in alignment with the LGEC. Waste valorization. The definition of “waste” is updated to recognize its valorization potential, allowing its use within circular economy schemes, provided that the applicable environmental regulations are complied with. Use of natural resources. The obligation that the use of renewable resources guarantee their sustainability and incorporate, where appropriate, circular economy mechanisms is reinforced. Virgin materials and environmental standard. The use of virgin materials in economic activities must be subject to the principles and criteria of the circular economy, guiding companies to maximize the useful life of products and reduce their environmental footprint. III. Amendment to the General Law for the Prevention and Comprehensive Management of Waste The amendment to the General Law for the Prevention and Comprehensive Management of Waste (LGPGIR) reinforces the incorporation of the circular economy approach into the legal regime for waste, aligning it directly with the objectives and principles of the LGEC. As a result, waste management ceases to focus exclusively on control and final disposal, and consolidates itself as a strategic instrument of environmental and productive policy. Valorization and comprehensive waste management. The amendment broadens the concept of waste utilization, incorporating actions aimed at the recovery of economic value, such as reuse, remanufacturing, redesign, treatment, recycling, and recovery of secondary materials or energy. Concept of product and circularity. The definition of product is updated to expressly recognize the use of virgin and secondary materials, reinforcing the principle of circularity in production chains and in applicable management plans. Compliance and sanctioning regime. The regulation of waste management must be subject not only to the LGPGIR, but also to the LGEC and to the general agreements regarding Extended Producer Responsibility, broadening the catalog of infractions, particularly for noncompliance regarding the circular economy during the management of hazardous waste. These changes entail both compliance challenges and opportunities to proactively begin analyzing appropriate strategies in order to optimize processes, strengthen environmental management schemes, and anticipate regulatory risks. Should you have any questions or require additional information, please do not hesitate to contact our experts: For additional information, contact: Edmond F. Grieger, Partner: +52 55 5258 1007 | egrieger@vwys.com.mx Roberto Flores, Associate: +52 55 5258 1007 | rflores@vwys.com.mx Stefania Lopardo, Associate: +52 55 5258 1007 | slopardo@vwys.com.mx Alondra Marin, Associate: +52 55 5258 1007 | amarin@vwys.com.mx Héctor Sánchez, Associate: +52 55 5258 1007 | hsanchez@vwys.com.mx Ana Diener, Associate: +52 55 5258 1007 | adiener@vwys.com.mx

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