According to Abel Ayala, Director of Administration and Finance of Minera del Norte (MINOSA), a subsidiary of Altos Hornos de México (AHMSA), the recently proposed Mexican carbon tax is not consistent with the Energy Reform Project, as fuels that pollute more are taxed less on their selling price--such as gasoline (1.3 percent), fuel oil (1.6 percent), natural gas (6.1 percent) and coke (9.5 percent)--while the proposal seeks to impose a carbon tax of 19.5 percent.
Speaking before the Committee on Finance of the Chamber of Deputies, Ayala said: "For national security reasons, we should not discourage the use of coal as energy, because Mexico is one of the countries least likely to use this product in its energy mix, just with 8 percent , while the world average is 42 percent."
Ayala added that the carbon tax poses a serious risk to the coal region of Coahuila, the largest in the country, and in general to the Mexican steel industry, which provides employment to 600,000 workers.
Instead, Ayala proposed the following to the committee:
1) Establish an environmental compensatory tax of 13 percent on imports of steel. The tariff is fixed to countries that have no environmental standards similar to those in Mexico. This measure would generate resources by US$1.7 billion, considering only sector imports.
2) Set the reform initiative of who must pay the tax as one who burns the fuel and who produces and extracts it.
3) In case any taxes are applied to carbon emissions, theyshould be implemented gradually starting in 2017, given the limitations in the production and distribution of natural gas, as it is estimated that PEMEX has the necessary infrastructure to meet domestic demand gas from 2016.
4) If the tax reform is approved, it must prove against investments in environmental matters in the communities where industries opérate, including modernization processes for energy efficiency, mitigation actions, environmental protection, remediation, carbon capture, and reforestation.
5) Finally, set a Norma Oficial Mexicana (NOM) Environmental policy that defines the minimum requirements to be met by goods produced and/or marketed in Mexico.