It is difficult for the industry of the region to timely fulfill the established requirements for further access to the EU markets

Latin American steel associations insist on extending the terms of joining the European CBAM. This is stated in a joint statement of regional industry associations, published by the Latin American Steel Association (Alacero), reports S&P Global.

It will be difficult for association members to fulfill the established requirements for further access of export products to the EU, which is the region’s main steel trading partner.

«We understand that under current conditions it will be difficult to fulfill the requested requirements in a timely manner, which will affect the traditional trading processes of our steel producing members in the region,» Alacero noted.

Alacero, based in São Paulo, signed the statement along with representatives of national steel associations from Brazil, Mexico, Argentina, Colombia and Ecuador.

«We ask all those responsible to analyze the possible extension of deadlines, to accelerate and improve communication and training, and to ensure that the requested information does not affect the rules of compliance with the requirements and regulations of each party involved,» the message reads.

As the steel association representing steelmakers of Latin America recalled, the transition period of CBAM begins already on October 1, 2023, and will last until the end of 2025. However, the guidelines were only published as recently as August, and the proposed training courses are being announced from October 5, after the transition period has already started. In addition, some information on the EC website regarding the CBAM methodology is «confusing and incomplete,» Alacero said.

The industry association notes that the Latin American steel industry fully supports the issue of green energy transition. However, this is a complex process that must be fair and realistic, taking into account the situation and available resources of each industry and country.

«Unlike EU member states, Latin American countries do not have subsidies or grants to finance the transition or implementation of revolutionary decarbonization technologies,» the statement said.

According to GMK Center, for the first eight months of 2023, EU governments announced the allocation of €8.7 billion for the decarbonization of steel industry. Allocation of €4.9 billion has already been approved, discussions on providing the remaining funds are ongoing. The main beneficiary of state support for decarbonization is ArcelorMittal. The company can receive 48% of all funds allocated to the industry by the governments of European countries.

As GMK Center reported earlier, China calls on the EU to provide compliance of CBAM with WTO rules. At the same time, Thailand’s exporters can to face difficulties in fulfilling EU reporting requirements within the framework of the mechanism.