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Latin American steelmakers press for CBAM deadlines to be extended


Current timetable seen 'difficult to comply with'

CBAM transition period to start Oct. 1

Latin American countries 'not gaining subsidies' for energy transition: Alacero

  • Author
  • Diana Kinch
  • Editor
  • Richard Rubin
  • Commodity
  • Metals

Latin American steelmakers are pressing for deadlines for adhesion to the European Commission's Carbon Border Adjustment Mechanism to be extended, representatives of regional steelmaking associations said in a joint public statement Sept. 19.

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The associations' members will find it difficult to comply with the timetabled requirements for continued export product access to the EU, a major steel trade partner, according to the statement issued by Latin American Steel Association, or Alacero.

"We understand that, under the current conditions, it will be difficult to comply in a timely manner with the requested requirements, affecting the traditional trade processes of our steel producing members in the region," Alacero said.

Sao Paulo-based Alacero, which represents steelmakers and the broader value chain, signed the statement along with representatives of national steelmaking and metal producing associations from countries including Brazil, Mexico, Argentina, Colombia and Ecuador.

Alacero expressed "its concern regarding the process of regulation and implementation" of the EC's carbon border adjustment mechanism.

"We ask whoever is responsible to analyze a possible extension of deadlines, accelerate and improve communications and training, as well as to ensure that the information requested does not affect the compliance rules of each party involved," it said.

CBAM is a carbon tariff to be imposed on carbon-intensive goods entering the EU in line with EU Green Deal legislation, to be fully effective 2026. It aims to help establish a fair price for carbon and encourage cleaner industrial production in non-EU countries.

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Alacero noted that the CBAM transition period has been defined as starting as soon as Oct. 1 this year, continuing until Dec. 31, 2025.

However, guidance documents for CBAM were published only as recently as between Aug. 17 and 22, with proposed training courses being announced from Oct. 5, after the transition period will already be under way, Alacero said.

Some of the information on the EC website on the CBAM methodology is moreover "confusing and incomplete," Alacero said. "This situation represents increased administrative processes, with their consequent economic costs, affecting developing regions in an unequal manner," it said.

EC spokespersons had no immediate response Sept. 19 to the Alacero statement

State aid and subsidies

The Latin American steelmaking industry is fully committed to the energy transition, Alacero said.

"We understand that this is a complex process, which must be fair and realistic, taking the situation and available resources of each industry and each country into account," it said. "Unlike the countries that make up the European Union, Latin American countries do not have subsidies or non-refundable aid to finance the transition or the adoption of disruptive decarbonization technologies."

In the first eight months of 2023, EU governments announced allocation of Eur 8.7 billion ($9.29 billion) for decarbonization of EU steel companies, Ukraine-based steel industry researcher GMK Center reported Sept. 7.

The main beneficiary of these funds is steelmaker ArcelorMittal -- expected to gain 48% of the total allocations -- with ThyssenKrupp and Salzgitter being among other recipients, according to GMK Center, whose own research on the subject was complemented by data from the EC and other media outlets, it said.