Mexico’s Chamber of the Iron and Steel Industry (Canacero) has opposed the country’s energy transition law (LTE), which sets goals and mechanisms for the use of renewable energy into the nation’s electric grid.
The LTE, which was reviewed and approved by the nation’s Senate, puts the competitiveness of the country’s steel industry “at risk”, according to the local steel association.
“Mexico’s steel industry is totally favorable and is committed to the reduction of gases to mitigate the effects of climate change, but not in the terms and conditions proposed in the LTE,” the trade group said in an open letter published in major national newspapers.
According to Canacero, the LTE “obligates” Mexico to consume renewable energy it “still doesn’t have.” Several industrial trade groups noted companies should buy clean energy certificates, no matter the strong demand and the weak supply there will be for those certificates.
Canacero noted that the lack of a maximum limit to the clean energy certificates could result “in high direct costs, which we all Mexicans will pay, not only the industry, and which will benefit only the energy producers.”
“Our [steel] industry is in accordance in paying a cost [for using cleaner energy], but we don’t support a mechanism that doesn’t guarantee limits to the raising of electricity prices and which can, upon certain scenarios, generate out of proportion costs and a strong uncertainty about its effects and future costs of electricity.”
Canacero said that once the steel industry’s competitive is affected, Mexico would then be “at risk” of seeing more incentives for the import of steel to the country.
The recently approved version of the LTE sets intermediary goals for the country, which expects to obtain 35 percent of clean energy in the nation’s electricity mix by 2024.
Other trade groups, such as the nation’s association of manufacturing industries, said the LTE would lead to a 20 percent increase in electricity and could potentially cause bankruptcies, according to media reports.