Single Environmental Licence (LAU) and COA: what your plant needs in Mexico

The Single Environmental Licence (LAU) and the Annual Operating Certificate (COA) are two key procedures for any federal-jurisdiction industrial plant in Mexico. The LAU is the authorisation that allows you to operate; the COA is the annual report through which emissions are declared. Understanding the difference between the two, and how they relate, is essential to keep your facility compliant and avoid penalties.

In short: you first obtain the LAU (once, when setting up or when modifying operations) and, from then on, you file the COA each year to track emissions.

What the Single Environmental Licence (LAU) is

The LAU is SEMARNAT's federal authorisation for the operation and functioning of federal-jurisdiction fixed sources that emit or may emit odours, gases or particulates into the atmosphere. Its legal basis is Article 111 BIS of the LGEEPA, and it is processed by SEMARNAT through its relevant Directorate.

Its main feature is an integrated approach: a single instrument analyses the establishment's impacts on air, water and soil. The LAU is issued once and definitively according to the main activity and location of the plant; it is updated when there are significant changes in operations.

Two references explain that design. Article 109 BIS 1 of the LGEEPA requires SEMARNAT to set up mechanisms so that anyone needing several permits, licences or authorisations from the same ministry can complete a single procedure: that is where the single licence logic comes from. And article 18 of the LGEEPA Regulation on the prevention and control of atmospheric pollution establishes that federal-jurisdiction fixed sources that emit or may emit odours, gases or particles require an operating licence issued by SEMARNAT, with indefinite validity. Article 17 BIS of that regulation also details the specific subsectors of each federal industry.

Who needs the LAU

The LAU applies to federal-jurisdiction fixed sources, which the LGEEPA narrows to eleven industrial sectors:

• Chemical
• Oil and petrochemical
• Paints and inks
• Automotive
• Pulp and paper
• Metallurgy (including steelmaking)
• Glass
• Electricity generation
• Asbestos
• Cement and lime
• Hazardous-waste treatment

Fixed sources that do not belong to these sectors are generally under state or municipal jurisdiction and are governed by the corresponding local environmental licences.

What the Annual Operating Certificate (COA) is

The COA is the annual report associated with the LAU. It is the instrument through which federal-jurisdiction fixed sources report to SEMARNAT their emissions and transfers of pollutants to air, water, soil and subsoil, as well as the generation of hazardous waste, for the immediately preceding year. In practice, the LAU authorises operation and the COA accounts, each year, for how that operation has behaved.

How they are filed

Both procedures are carried out electronically before SEMARNAT. Broadly:

1. LAU: the application is submitted with the establishment's technical information and, where applicable, supporting studies. Article 19 of the atmospheric regulation lists what must accompany the application: general data, location, process description, layout of machinery and equipment, raw materials or fuels and their storage, their transport to the process area and their transformation, products, by-products and waste, storage and distribution of products, quantity and nature of the expected pollutants, pollution control equipment and a contingency programme for unfavourable weather conditions or extraordinary emissions. The authority evaluates and, where relevant, issues the licence with the applicable conditions.
2. COA: each year, the previous period's emissions information is entered into the official system, based on the plant's measurements and balances.

The combustion data reported rely, among others, on the measurements required by the applicable Mexican Official Standards. You can dig deeper into the catalogue of Mexican Official Standards and how they fit into these procedures.

Decision deadline and content of the licence

Under article 20 of the regulation, SEMARNAT grants or refuses the licence within 30 working days from the date it has all the required information, and may request additional information or verify its accuracy at any time. If granted, the licence specifies how often the emissions inventory must be sent, the frequency of measurement and monitoring, the measures to apply in a contingency, and the equipment and conditions for preventing and controlling pollution. The authority can set specific maximum emission levels for sources that, because of their construction or processes, do not fit the NOMs, and can amend them on the basis of the COA information when the area becomes a critical zone, more efficient control technologies exist or production processes change.

Obligations that come with the licence

Holding the LAU is not just a piece of paper. Article 17 of the same regulation imposes a series of ongoing obligations on those responsible for federal fixed sources:

• Use control equipment and systems so that emissions do not exceed the maximum levels of the NOMs.
• Compile an emissions inventory in the format SEMARNAT determines.
• Install sampling platforms and ports, keep them in safe condition and keep measuring equipment calibrated.
• Measure emissions, record the results and send them when the authority requests.
• Carry out perimeter monitoring when the source is in urban or suburban areas, borders protected natural areas or could cause serious damage to ecosystems.
• Keep an operation and maintenance log for process and control equipment.
• Give advance notice of scheduled shutdowns and immediate notice of unscheduled shutdowns or control equipment failures that could cause pollution.
• Channel emissions through ducts or stacks with the effective height set by the relevant standard, unless the authority accepts a supporting study.

COA deadlines

The deadline is one of the most sensitive points. COA entry opens from 1 March to 30 June each year, and reports the previous calendar year's information (1 January to 31 December). It is a short window and the system stops accepting ordinary submissions once it closes, so it is best to prepare the data in advance and to confirm the calendar SEMARNAT publishes for each cycle.

Relationship with the RETC

The information declared in the COA feeds the Pollutant Release and Transfer Register (RETC), the national public database that compiles emissions and transfers of pollutant substances. The RETC is based on Article 109 BIS of the LGEEPA, and its regulation defines the obligated parties and the registry's conditions. Thus the COA is not an isolated procedure: it is the route by which your plant's data become part of the country's environmental transparency.

For new projects, an Environmental Impact Statement (MIA) is also usually required before operating. To place the LAU and COA within the full Mexican environmental framework, see our guide on environmental laws, NOMs and certifications in Mexico.

Consequences of non-compliance

Failing to meet these obligations, whether by operating without a LAU or by not filing the COA on time, can lead to penalties under the applicable environmental legislation, in particular the LGEEPA and its regulations. Article 171 of the LGEEPA provides for fines of 30 to 50,000 days of minimum wage (a reference now calculated in UMA), temporary or definitive closure, total or partial, administrative arrest of up to 36 hours and the suspension or revocation of concessions, licences, permits or authorisations; if the infringement persists after the deadline granted to correct it, fines can be imposed for each day that passes, and in case of recidivism the fine can be tripled, with definitive closure. The atmospheric regulation adds its own range, from 20 to 20,000 days of minimum wage. To grade the penalty, article 173 looks at severity, the offender's economic conditions, recidivism, whether the conduct was intentional or negligent and the benefit obtained, and treats correcting the irregularities before the penalty is imposed as a mitigating factor. The authority can even allow the fine to be replaced by equivalent investment in pollution control equipment. Complying on time not only avoids financial and operational risk, it also strengthens the company's environmental reputation. Moreover, building a solid emissions inventory to report is the basis for knowing and reducing your carbon footprint.

Frequently asked questions

What is the difference between the LAU and the COA?

The LAU is the operating authorisation obtained once for federal-jurisdiction fixed sources; the COA is the annual report through which that operation's emissions are declared to SEMARNAT each year.

When is the COA filed?

From 1 March to 30 June each year, reporting the immediately preceding calendar year's information. It is worth confirming the official calendar for each cycle before organising the data collection.

Does my company need the LAU?

The LAU applies to federal-jurisdiction fixed sources within eleven industrial sectors (chemical, oil and petrochemical, paper, metallurgy, cement and lime, electricity generation, among others). If your establishment is not in those sectors, a state or municipal environmental licence probably applies instead.

If you want to centralise your facility's emissions, energy and fuel data and keep it traceable for preparing the COA, you can calculate your plant's carbon footprint with Manglai.