Millions of people in Mexico City are choking on the worst air quality in 14 years, as cars and trucks add to the pollution with their outdated emissions controls. And it’s not as though Mexico lacks access to the best technology.

The nation’s export-oriented factories, the focus of a $20 billion investment boom, ship motor vehicles to countries with strict pollution limits. Yet Mexico’s requirements are less stringent so cars, pickups and commercial trucks sold domestically don’t live up to the same emissions standards as the models made for foreign buyers.

Mexico’s weaker pollution controls are worsening the thick layer of smog basting the capital, which got so bad last week that city officials banned 40 percent of all vehicles from the streets. Transportation accounts for almost half of Mexico City’s air pollution, which according to government data kills as many as 2,700 people every year.

“We produce some of the best vehicles sold in the U.S. or Europe,” Edmundo Molina, an energy researcher at the Monterrey Institute of Technology, said by telephone. “The paradoxical thing is why we use technology here that’s not as good compared with other countries. And the reason has to do with regulation.”

Fuel Challenge

While low-polluting fuel is already sold in Mexico City, it has yet to be made available nationwide by Petroleos Mexicanos, the state-owned oil company known as Pemex. That makes it uneconomical to introduce vehicles with more modern emissions controls, according to the Mexican Automobile Industry Association, a trade group representing automakers.

Boosting tax breaks on new models would also help modernize the fleet of heavy vehicles, according to Miguel Elizalde, head of the country’s trade association for bus and truck makers. The average age of heavy vehicles in Mexico is 17 years, he said.

“This is not the industry’s whim,” Elizalde said by telephone from Mexico City.

The group welcomes an update in regulation that would raise emissions standards to those in the United States or Europe “but we need legal certainty to define the planning of the vehicles and make sure there is no surge in imports of used vehicles bought in the United States.”

‘Chicken or the Egg’

Pemex will provide ultra low sulfur diesel across the entire country by the end of 2018, the company said in an e-mailed statement.

“The negotiations are like a game of the chicken or the egg, in which one party says ‘Give me the gasoline first,’ and the other says ‘No, because we don’t have vehicles in which to use it,’” says Fatima Masse, an environmental policy analyst at the Mexican Competitiveness Institute, a Mexico City-based think tank.

Countries like India and Brazil have already introduced latest emissions technologies, which have been a requirement in the United States since 2014, Masse said. Mexico has been making progress since last year, when Pemex made ultra-low sulfur diesel available on major trucking routes.

“In spite of this, we’ve not seen movement or acceleration in the technology update process” for vehicle manufacturers, she said. “We no longer see a big barrier to this.”

Smog Blanket

The situation in the capital has only gotten more dire since a Mexican Supreme Court ruling last year that eased a program forcing motorists to leave their cars at home one day of the week. As a result 600,000 more cars are on the streets each day, said Gabriela Nino, public policy director at the Mexican Environmental Rights Center, a non-profit lobbying group.

Now, with the blanket of smog seemingly entrenched over the capital since last month, the city has been struggling to bring down ozone levels. Officials even took the unpopular step of forcing a fifth of all cars off the road once a week until June, regardless of their emission levels.

The government, Pemex and automakers are discussing ways to adopt more advanced emissions controls, said Nino, who has participated in the talks. Progress won’t come without a cost.

“In the end, the industry passes the cost of this technology change on to the consumer,” she said. “It’s one of the pending issues that are affecting air quality.”