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Geothermal energy and biofuels in Mexico

Last verified: 2026-10-26 · Status: Stable

Geothermal fields are developed under two SENER titles: an exploration permit of up to 150 square kilometers for four years, extendable once, and an exploitation concession of 30 years that only the permit holder can obtain. The extension and the concession depend on meeting at least half of the technical and financial work schedules, drilling one to five exploratory wells, and a water authority opinion that aquifers are not affected. Biofuels need a SENER permit for production, import, export, storage, transport, marketing, distribution and retail; biomass from sugar cane or sorghum also needs an agriculture ministry permit, granted only when domestic stocks are in surplus.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Legal conversions in Mexico use the Banxico FIX, which differs slightly. Conversions are for orientation only. Fines set in UMA use the 2026 daily UMA of MXN 117.31 published by INEGI in the DOF of 9 January 2026.

Key facts

Maximum area of a geothermal exploration permit	150 km2Ley de Geotermia art. 12, as of 2026-10-26 · in force
Term of a geothermal exploration permit (extendable once by the same period)	4 yearsLey de Geotermia art. 12, as of 2026-10-26 · in force
Term of a geothermal exploitation concession	30 yearsLey de Geotermia art. 20, as of 2026-10-26 · in force
Minimum share of technical and financial schedules met to extend an exploration permit	50 %Ley de Geotermia art. 12, as of 2026-10-26 · in force

The rule

1. Geothermal exploration permit. SENER grants exploration permits to applicants that prove legal, technical and financial capacity and experience, with a technical work program with dated goals and a financial schedule by stage. A permit covers up to 150 square kilometers, lasts four years and can be extended once for four more years if the holder has met at least 50 percent of the technical schedule and 50 percent of the financial schedule. The extension request must be filed in the last six months of the permit. The holder has exclusive exploration rights over the area and must drill and complete at least one and up to five exploratory geothermal wells, and file a technical report at the end of each year.
Cost to do it: The main cost is drilling and completing one to five exploratory wells; the holder must also guarantee its permit obligations and any damage the exploration work may cause (art. 18, section VI).
Example: A developer granted a 120 square kilometer permit in Michoacán in 2026 must, by the end of year four, show at least half of its drilling and spending plan executed to secure the single four year extension. / If the financial schedule commits USD 40 million over four years, at least USD 20 million must have been spent to qualify for the extension.Ley de Geotermia, new law DOF 18 March 2025, Arts. 9 to 13 and 18, 2025-03-18 official text · verified 2026-10-26 · changed: The 2025 Ley de Geotermia repealed the Ley de Energía Geotérmica of 11 August 2014 as part of the 18 March 2025 energy package.

2. Geothermal exploitation concession. Only the holder of the exploration permit that met its terms and schedules can apply for the concession, over an area equal to or smaller than the permit area. The applicant's corporate purpose must cover geothermal exploration and exploitation, and it must show capacity, a budget, work and financial schedules, the generation permit request and interconnection feasibility. The water authority (CONAGUA) gives a binding input within 10 business days on whether exploitation interferes with adjacent aquifers. The concession lasts 30 years from publication of its extract in the DOF and may be extended at SENER's discretion; the extension request is filed between one year and six months before expiry. The applicant has a maximum of three years to obtain the other required permits.
Cost to do it: Concession duties are under the Ley Federal de Derechos; budget also for the CNE generation permit and interconnection under the LSE.
Example: A permit holder that confirms a resource in 2029 files for a 30 year concession and has until 2032 to secure the generation permit, interconnection and environmental authorizations. / No currency threshold; the terms are in years.Ley de Geotermia, new law DOF 18 March 2025, Arts. 20 to 23, 2025-03-18 official text · verified 2026-10-26

3. Biofuels permits. A SENER permit is required to produce, import, export, store, transport, market, distribute and sell biofuels to the public. Producing biomass for biofuels from sugar cane or sorghum needs a permit from the agriculture ministry (SADER), granted only when domestic production inventories exceed what is needed for national consumption. SENER sets traceability through to final use. Aviation biofuels may not be sold directly to the public; permitted distributors supply air carriers at aerodromes. Blending gasoline with ethanol or diesel with biodiesel for sale is a formulation activity that needs a separate CNE permit under the Hydrocarbons Sector Law, which starts to be granted only after quality standards for the blends are issued.
Cost to do it: No fee amount is set in the law; permit duties follow the Ley Federal de Derechos.
Example: A sugar mill in Veracruz that wants to turn cane into ethanol needs the SADER biomass permit, available only in surplus years, plus a SENER production permit. / No currency threshold applies.Ley de Biocombustibles, new law DOF 18 March 2025; Ley del Sector Hidrocarburos, new law DOF 18 March 2025, Ley de Biocombustibles arts. 25 and 26; LSH arts. 76, 84 and transitory art. Décimo Séptimo, 2025-03-18 official text · verified 2026-10-26 · changed: The 2025 Ley de Biocombustibles replaced the 2008 Ley de Promoción y Desarrollo de los Bioenergéticos.

Worked example

An Icelandic geothermal developer forms a Mexican company, obtains a four year exploration permit over 140 square kilometers, drills three exploratory wells and, having executed 60 percent of both schedules, gets a four year extension. It then applies for a 30 year concession over the 40 square kilometers with proven resource, with a CONAGUA aquifer opinion due within 10 business days, and files its CNE generation permit and CENACE interconnection request in parallel.

Step by step

1. Apply to SENER for an exploration permit with capacity evidence, a dated technical program and a financial schedule.
2. Drill and complete one to five exploratory wells and file yearly technical reports.
3. Before month 42, check that at least 50 percent of both schedules are met and request the single extension in the last six months.
4. File the concession request with the CONAGUA aquifer evidence; obtain the generation, interconnection and environmental permits within three years.
5. For biofuels, obtain the SENER permit for each activity and, for cane or sorghum biomass, the SADER permit.

Common traps

Falling below 50 percent of either schedule, which blocks the only extension (Ley de Geotermia art. 12).
Filing the concession extension late: the window closes six months before expiry (art. 20).
Blending biofuels into gasoline or diesel without the separate CNE formulation permit (LSH arts. 76 and 84).

Sources

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