General Law on Circular Economy: quick guide

What is the circular economy?

The circular economy seeks to transform the traditional linear economic model, in which raw materials are extracted, products are manufactured, used and finally discarded as waste. In contrast, the circular economy model aims to extend the useful life of products by: (1) revalorising waste; (2) designing products for circularity; (3) promoting collaborative economy models or servitisation as substitutes for product sales; and, of course, (4) holding producers responsible throughout the entire lifecycle. Through technical, social, economic and environmental feasibility, circular economy projects reduce negative environmental impacts, regenerate natural systems, and contribute to environmental conservation.

The pillars of the law

This law aims to promote the circular economy in both consumption and production patterns in Mexico through the following pillars:

1. Obligations, control measures and supervision

Once the General Implementation Agreement for EPR is published, the sectors or product categories subject to circular economy obligations will be determined. Their main obligation will be registration of their Circular Management within the Circular Economy Register, which entails describing their comprehensive circularity plan. This plan may include, among other elements, lifecycle analysis, environmental footprint assessments, the circularity mechanisms to which they align, and their associated targets. Failure to comply with these obligations may result in sanctions under the General Law on Ecological Balance and Environmental Protection (LGEEPA) and other applicable regulations, as established by the Regulation.

2. Economic instruments

On one hand, although still undefined, the law enables the Federal Executive to develop and implement tax incentives that benefit companies with circularity practices, in accordance with the National Programme on Circular Economy. It is anticipated that these incentives may include, among others, tax credits, incentives and benefits related to taxation or foreign trade.

On the other hand, voluntary commercial labels—such as the National Circular Economy Mark authorised by SEMARNAT—serve as official seals helping consumers identify and select circular products and services. At the same time, they provide a competitive advantage and prevent misleading greenwashing practices. Companies seeking this mark must submit, in person at the Citizen Services Area, various documents including a Circularity Manifesto describing how their products or services align with the circular economy. After an exhaustive documentary review and, in certain cases, an on-site audit, companies receiving at least 80 out of 100 points obtain permission to use the mark in communications and advertising related to the specific product or service.

3. Collaboration

Recognising that the transition to a circular economy requires complex infrastructure and coordinated participation among producers, consumers, government and other intermediaries, the law establishes collaboration as a central pillar. Collaboration will be organised through the National Circular Economy System, which will serve as the mechanism to plan, implement and supervise circular economy policies.

Within government, it aims to coordinate the three levels: Federal Government, State Governments and Municipal Governments. The Federal Government will lead implementation through the development of the National Programme on Circular Economy, the General Implementation Agreement for EPR, and the National Circular Economy System, among others. State and Municipal Governments must adopt and apply circular economy policies and promote local circular economy infrastructure.

Producers, in turn, must comply with EPR obligations and uphold their Circular Management commitments. Their efforts include making technical adjustments, adapting business models, strengthening staff expertise, collaborating with other actors, and more.

For consumers, their essential role lies in waste separation, adherence to product recovery practices at end-of-life, and promoting responsible and informed consumption that supports the circular economy.

4. Education and awareness

Achieving structural change in society requires significant efforts to increase awareness around the topic. Through education, shared responsibility among the various stakeholders involved in this new law can be strengthened. The document specifically notes the need to provide accessible information and promote research and professional training in circular economy in order to establish solid foundations for progress.

5. Technological innovation

The law recognises that advancing technological innovation requires promoting research. This research should focus on how to adapt traditional processes and machinery to use revalorised materials; identifying optimal strategies for circular business models; understanding the ideal balance between economic, social and environmental aspects; and improving current waste management, including tools, logistics practices, infrastructure and more. Companies that identify these sustainability opportunities aligned with the circular economy and invest early in preparation and capacity-building will gain competitive advantages, added value, and reduced risks associated with regulatory non-compliance or late alignment.

For companies operating in Mexico, it will be crucial to remain informed about developments to this Law.

How we can help

At Forvis Mazars, our sustainability specialists can help you prepare to comply with the requirements of the General Law on Circular Economy. Our services include drafting circular management documentation, performing lifecycle and environmental footprint assessments for products, and supporting companies in obtaining the National Circular Economy Mark.

If you wish to consult the publication of the General Law on Circular Economy in the Official Gazette of the Federation, you may click the button below.

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