Substances of Concern in Mexico’s Circular Economy Law

This article was written by Melissa Owen from AMBIENTELEGAL. For more information about her professional experience and expertise as well as about AMBIENTELEGAL, please refer to the biography section at the end of the article.

Companies operating across borders in Latin America - including  those manufacturing, importing, distributing, or transporting chemical products - need to pay careful attention to Mexico’s new Circular Economy Law. The title of the Law is deceptive because it goes well beyond waste and recycling.  It signals a policy shift toward addressing substances of environmental concern, what it refers to as “toxic and contaminating substances.”

Regulatory affairs professionals, product stewardship teams, SDS authors, transport compliance specialists, and emergency response coordinators should monitor how this framework evolves, as it may influence not only environmental policy but also broader chemical management practices, hazard communication, and long-term compliance strategies in Mexico.

The law approaches this issue in several ways

• First, the future National Circular Economy Program—which will identify covered products and sectors—should promote productive processes that reduce the use of toxic substances.
• Second, the Program is expected to foster Circular Design by minimizing the use of toxic and contaminating substances at the production stage.
• Finally, the government is tasked with establishing targets for substituting toxic substances with non-toxic alternatives. 

The law itself does not immediately ban or list substances, but it clearly mandates future policies, EPR implementation agreements, and targets that aim to:

1. Reduce the use of substances of concern
   
2. Promote substitution with safer alternatives
3. Embed these expectations into product design and lifecycle managemen

Any concrete restrictions will therefore come later—through the National Circular Economy Program, EPR Implementation Agreements, and future NOMs (mandatory technical standards).

The Disconnect: “Toxics” vs. Hazardous Substances

The law’s use of the term “toxic and contaminating substances” reflects a broader and longstanding challenge in Mexico’s environmental framework: the absence of a modern, comprehensive approach to hazardous chemical substances. These terms are imprecise and limiting, and their use perpetuates gaps already present in existing environmental legislation. By contrast, several Latin American countries—including Chile, Colombia, Brazil, and Peru—have moved toward modern chemical management regimes (often referred to as “LatAm REACH") all of which recognize the Globally Harmonized System of Classification and Labelling of Chemicals (GHS) as a foundational element. The Circular Economy Law could have adopted a more contemporary approach by referencing hazardous substances and aligning explicitly with the GHS. While the United States still uses the term “toxic” in its chemical framework, that statute -the Toxic Substances Control Act (TSCA) - dates back to 1976, long before the development of the UN GHS.

The terminology choice points to a lack of regulatory coordination. Companies need to understand that the Circular Economy Law addresses substances at a policy level using terminology that is disconnected from modern chemical management framework.  This outdated terminology is in stark contrast to the reality of operational compliance in Mexico which is already based on the Globally Harmonized System of Classification and Labelling of Chemicals (GHS). Mexico’s workplace safety regulations, transport requirements for hazardous materials, and certain emerging product standards are GHS-based and consistent with UN recommendations. The fact that technical compliance mechanisms are increasingly aligned with international standards leads us to assume some lack of coordination between the legislature that developed the new law and the regulators involved in day-to-day chemical regulations in the country. In this context, the Circular Economy Law feels like a throwback to earlier environmental laws such as the LGEEPA (General Law on Ecological Equilibrium and Environmental Protection).

Next Steps

Future instruments adopted under the Circular Economy Law - including the Regulation, National Program, EPR agreements, and NOMs - will ultimately determine how substances of concern are addressed in practice.

About the author

Melissa Owen, founder of AMBIENTELEGAL (www.ambientelegal.com)  and AMBIENTELEGAL Academy (https://ambientelegalacademy.teachable.com/p/home). She was born in Mexico and is a U.S.-licensed lawyer fluent in Spanish, Portuguese, Italian, French, and English. With 25+ years advising Fortune 500 companies and trade associations, she is a leading expert on environmental, regulated products, chemical, and sustainability regulations across Latin America and author of the Around Latin America newsletter. Her Linked In profile can be found here. 

About AMBIENTELEGAL

AMBIENTELEGAL is a legal and regulatory consulting practice focused on providing solutions for Latin America.