Decomposition of energy consumption and CO2 emissions in Mexican manufacturing industries: Trends between 1990 and 2008

From 1990 to 2008 the share of the manufacturing sector in the Mexican CO2 emissions related to energy consumption decreased from 20% to 14%. This was due to increased emissions of the transport sector (32 to 40%), but also to an important decrease in energy intensity of the manufacturing industries. The objective of this paper is to explain the changes in CO2 emissions related to energy consumption of the manufacturing industries in Mexico. To this end, a decomposition analysis based on an additive Log Mean Divisia Index was developed, in order to estimate relative contributions of activity, structure, real intensity, and fuel switching changes in different industrial subsectors. The results show that structure and real intensity changes played an important role in the moderate increase of CO2 emissions of the Mexican manufacturing industries. However, real intensity changes do not always reflect energy efficiency derived from technological changes, they might also reflect changes in the structure of product production.

► From 1990 to 2008 Mexican manufacturing energy intensity decreased by 26%.
► Divisia index is used to analyze CO2 emissions of Mexican manufacturing energy use.
► The reduction in energy intensity not always reflects energy efficiency.
► Decrease in energy intensity can be attributed to changes in product production.