Mexico Issues Agreement on Environmental Compensation for Forest Land Use Changes

Mexico's National Forestry Commission issued the "Agreement Establishing the Reference Costs for Environmental Compensation for Change of Land Use in Forest Lands," published in the Federal Official Gazette (Diario Oficial de la Federación or DOF) on June 16, 2026.

The agreement introduces a significant adjustment to the framework applicable to the determination of environmental compensation amounts associated with authorizations for changes in land use in forest lands (cambio de uso del suelo en terrenos forestales or CUSTF).

Legal Framework

The regulation of the CUSTF is primarily based on the General Law on Sustainable Forest Development, which establishes the obligation to provide environmental compensation when these changes are authorized.

The regulation provides that compensations are made through a deposit into the Mexican Forest Fund and that the amount is determined by the Secretariat of Environment and Natural Resources (SEMARNAT) or the Agency for Safety, Energy and Environment (ASEA), based on published methodologies.

Furthermore, proof of such deposit is a mandatory requirement for obtaining the corresponding authorization.

Relevant Regulatory Background

The following are key dates related to the regulations:

• March 8, 2023: Reference costs and methodologies were published.
• December 26, 2025: The updated agreement was issued.
• June 16, 2026 (current agreement): The 2025 costs were repealed and the 2023 framework was reinstated. This change entails a return to the previously applicable scheme.

Main Provisions of the Agreement

The agreement's main provisions are:

• The reference costs associated with the restoration, reforestation and maintenance activities linked to environmental compensation for CUSTF will follow the March 8, 2023, publication.
• The agreement published on December 26, 2025, is expressly repealed.

In practical terms, this redefines the economic basis upon which authorities will calculate the amounts to be covered for environmental compensation.

Entry into Force

The agreement enters into force on the business day following its publication in the DOF. No transitional provisions are included, and applications must be assessed on a case-by-case basis.

Future Update of Costs

As of January 1, 2027, updates will be based on the National Consumer Price Index (Índice Nacional de Precios al Consumidor or INPC), published by the National Institute of Statistics and Geography.

Practical Considerations and Potential Effects

Reversal of Recent Economic Criteria

The return to the 2023 framework may result in variations in compensation amounts compared to those applied under the December 2025 agreement.

Impact on Financial Evaluation of Projects

Those who have projects involving CUSTF should:

• review their financial models and budgets
• recalculate provisions for environmental compensation
• assess potential adjustments to total project costs

Considerations for Ongoing Procedures

In administrative proceedings currently underway, issues may arise such as:

• determining the relevant timing for establishing applicable costs
• potential differences between amounts already notified and updated reference values
• interaction with previously issued resolutions

Need for Regulatory Planning and Monitoring

The change underscores the importance of:

• maintaining continuous monitoring of regulatory updates
• incorporating flexibility into the planning of projects subject to environmental authorization

Next Steps for Regulated Parties

Regulated parties should take the following steps:

• Review the status of CUSTF applications to identify the applicable regulatory regime.
• Confirm environmental compensation amounts based on the applicable reference costs.
• Assess the potential financial and compliance impact resulting from the change.
• Ensure proper documentation of payments to the Mexican Forest Fund as a prerequisite for authorization.

The agreement adjusts applicable reference costs while maintaining the overall structure of the compensation framework. Its impact will depend on a comparison between the 2023 and 2025 costs and their application by the authorities.

For more information or questions, please contact the authors.

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