Carolina Bengochea, Environment Senior Director at Tenaris; Pablo G. Strada, Legal Sr. Director – International Trade at Techint Group; and José Fonrouge, Sustainability Senior Director at Ternium, Chair of the worldsteel Environment Committee (ECO) and of Alacero's Environmental Policy Committee (COPAM), examine how industrial decarbonization is progressing at a time when climate regulation, trade policy, and competitiveness are reshaping investment decisions.

The debate is no longer only about how much to decarbonize. It is also about under what rules, at what pace, and with what competitiveness equation. In steel, these three questions meet. Strada looks at the trade and regulatory front. Bengochea looks at how those signals translate into operational decisions at Tenaris. Fonrouge, drawing on his work at Ternium and in global and Latin American industry forums, adds the technological and competitiveness dimensions of the transition.

"I believe the EU CBAM (the carbon border adjustment mechanism, an economic measure) remains, in terms of the energy transition, the measure that comes closest to the heart of the matter. Then you have other trade measures that serve other objectives," Pablo Strada says.

Bengochea completes the picture from the industrial side. Each region has its own regulatory schemes, and these influence where it makes sense to invest and how to operate, "but in terms of its influence on trade, it is obviously the CBAM in Europe the harshest we are facing."

The European Union's Carbon Border Adjustment Mechanism entered its definitive phase on January 1, 2026. Financial liability already applies to importers, and certificates are tied to the European carbon market, at around 75 euros per tonne of CO₂. The European Union is also considering extending the mechanism to finished steel and aluminum products by 2028, through a proposal that is at an advanced stage of the legislative process; the final text is expected by the end of 2026. In addition, on September 25, the World Trade Organization accepted Russia's request to establish a panel to challenge the legality of the CBAM.

This debate reaches a company that is already well along its own path. In 2021, Tenaris set a target to reduce its CO₂-eq emissions intensity by 30% by 2030 compared with a 2018 baseline, covering Scopes 1, 2 and 3 (including raw materials and the transport of products between Tenaris plants). By 2025, the company had achieved a 19% reduction in intensity. Renewable sources supplied 25% of its total electricity consumption, the steel it produced contained 81% recycled content, and it invested 197 million dollars in projects that contribute to decarbonization.

Ternium is following its own path using a mix of BF, DRI and EAF technology routes. Its corporate target is to reduce emissions intensity per tonne of hot-rolled steel by 15% by 2030 compared with a 2024 baseline, covering Scopes 1 and 2 and Scope 3 categories 1 and 10. The strategy rests mainly on three elements:

• New capacity at Pesquería: DRI-EAF steelmaking with a capacity of 2.6 million tonnes per year and capex of USD 2.2 billion, scheduled to start operating in the first quarter of 2027. It will be the most modern and sustainable steel shop in the region, with the capacity to capture and sell CO₂.

• Renewable energy: for example, the Olavarría Wind Farm in Argentina (capacity: 99 MW; capex: USD 225 million).

• More scrap: a higher share of scrap in the metallic charge in Brazil.

Fonrouge offers a principle that helps frame the discussion: decarbonization requires keeping industry viable at the same time. From his role as head of the worldsteel Environment Committee and Alacero's COPAM, he sees the tension between climate ambition, available technology and competitiveness as a shared agenda across the sector.

The European CBAM, however, does not operate in isolation. Strada describes a chain of effects that rarely comes up in the debate: "You have domestic mechanisms to drive the transition and, because it is very costly, they end up granting subsidies or free allowances, combined with a border barrier. Now, when those countries are no longer looking only at their own production but are exporting, the free allowance or the subsidy they received to invest is being examined in subsidy cases. A producer that survived because it received subsidies and invested, if it uses that to export, is already facing subsidy cases in other countries. It ends up overregulated or affected by these kinds of issues."

Bengochea adds the other side of the coin: European producers pay the cost of the CO₂ they emit, but they lose that protection as soon as they compete outside the bloc. "The European and the Indian producer arrive at export markets on equal terms, and the European says: I've already paid the full cost of the CO₂ I emit. The CBAM doesn't apply to exports. At least not for now."

Does all this change the priorities of Tenaris' decarbonization plan? For now, Bengochea sees demand coming from the commercial areas. They want to know how much the CBAM will cost for a given product in 2028 or 2029, or even later; how much needs to be factored into quotes; how competitors will be affected; and so on.

"I wouldn't say we are seeing changes in investment priorities today as a result of the CBAM. The system is still quite unstable; some aspects keep changing and lack precision. I think we still need to wait and see how the system evolves and what the economic impacts will be, since some changes under evaluation have yet to be defined. Today, the CBAM is one more factor considered in pricing and in order allocation," Bengochea explains.

Strada provides the international perspective. There has been neither a halt nor a reversal of the trend, but rather a slowdown. The expectation that the European model would be replicated worldwide has stalled: Mexico, Canada and Brazil put their reviews on hold, and the proposed agreement between the United States and Europe, which combined trade with environmental standards, was taken off the table. "I'm not saying it won't happen, but it will happen more slowly, and that will eventually give time to adapt. In renewables, the trend is still there: if you can do it at a cost that doesn't sink the project, maybe you'll do something, but you're not in a rush. Before, you were under pressure because if you didn't do it, you would be shut out of several markets."

Bengochea agrees with the diagnosis and puts a precise name to it: today there is "much more pragmatism in decisions about which investments you're going to make."

For Strada, the change in scale is the factor that reshapes the whole playing field. While the CBAM amounts to tens of dollars per tonne, Section 232 imposes a 50% tariff on the value of the product.

"You're talking about 700 or 800 dollars in tariffs. The scale of one measure's impact compared with the other has changed. When we were discussing this four years ago, the CBAM seemed crazy: imposing a tariff of 100 or 150 dollars. And today everyone in the United States is paying 50%.

Geographic reach adds to the magnitude. The United States, Europe, Canada, Mexico, Brazil and Colombia now apply direct trade barriers on steel, at a time when the breakdown of the multilateral system is pushing every player to ask how to regionalize. Whether that strategy works, he warns, is another matter. "I don't know how effective they are, because China keeps exporting on a scale that no tariff can offset. It's very hard to achieve with tariffs alone when competition plays out that way on prices. You'll have to turn to standards or regulations that practically require you to buy domestic content in order to sell. We're not there yet, but that's where the USMCA is heading in the renegotiation."

One debate also remains unresolved. The initiative between the United States and Europe was the only one that linked overcapacity with decarbonization, and no similar proposals connecting the two issues have emerged since. In his view, this disconnect- debating decarbonization without considering global competition- is the central shortcoming of today's debate.

Fonrouge broadens this view from an industry-wide perspective. The challenge is not only how much greenhouse gas is emitted to produce a tonne of steel. It is also under what conditions each producer can finance and deploy lower-emission technologies. In Latin America, where different energy mixes, production routes and regulatory frameworks coexist, the transition requires instruments that recognize those differences without losing sight of international competitiveness.

On the industrial side, an investment decision is a multi-variable equation that the regulatory environment shapes but does not determine. For renewables, the questions include where generation can be efficient and whether the local framework supports the project in terms of permits and incentives. From the standpoint of the cost of the electricity generated, behind-the-meter projects are preferred, but they are not feasible at every site.

"If we generate more renewable energy, we look for alternatives mainly at the sites where the most energy is consumed: the plants where we produce steel," Bengochea explains.

"For a project to be eligible, a whole series of conditions must be met, a framework that includes the efficiency of the project itself, its competitiveness and whether the local regulatory framework allows it. And that doesn't happen everywhere. So you look for the opportunity." The goal of increasing renewable generation remains firm. New projects have been approved in Italy, and alternatives are under evaluation in the United States, where they are more viable in the south than in the north.

In energy efficiency, the methodology for evaluating projects has not changed. Recent investments in furnaces respond to a combination of opportunity, the pursuit of greater efficiency, technology, a supportive regulatory framework, and additional safety or environmental benefits beyond the reduction of CO₂, such as lower NOx emissions. "To evaluate our investments, we use an internal carbon price. Suppose there is a reduction in CO₂ emissions; that translates into an improved payback for the project. We keep evaluating in the same way: in some cases things come together, and they move forward, and in others it isn't the right time, and we keep looking."

On the remaining gap to the 2030 target, she emphasizes the context. "External conditions definitely have an influence. The company operates within a framework of business, markets, the global situation, permits, requirements and safeguards. Inevitably, they will have an influence." The target, she stresses, remains unchanged.

For Fonrouge, this same equation explains why no single global roadmap exists for steel. Solutions depend on each region's technological starting point, energy resources and raw materials. That is why coordination among companies, governments and industry associations is decisive in turning climate goals into industrially feasible projects.

"The focus has changed," Strada sums up. "The impacts of other measures mean you spend more time on other issues, and those issues may be steering investment more because of their short-term impact. Even though the problem is still there and, eventually, the time will come when you have to do something."

Bengochea attributes this to a reordering of priorities in which geopolitics plays a decisive role. "Environmental or climate change issues are important, but their effect is longer term; it isn't urgent. So today the focus is elsewhere: Europe needs to secure its energy supply, and countries that have energy need to figure out how to bring it to market. Priorities have shifted because of a whole range of factors, geopolitics clearly among them."

Fonrouge agrees that the context has changed the pace, not the direction. In his view, steel has a dual nature: it is an emissions-intensive industry and, at the same time, an essential input for the technologies of the transition. As he often puts it: "There is no clean energy or decarbonization process that does not depend on steel."

This reordering, however, does not change what ultimately sustains the transition. "If there are technologies whose costs are coming down, as in many cases with renewables, a company will assess whether they represent a business opportunity and, at the same time, whether they offer an advantage from a sustainability standpoint. That will stay in the portfolio," Bengochea explains. She concludes: "We know subsidies last for a certain period of time; what drives the adoption of certain technologies is falling costs."

Where the three perspectives meet: decarbonization is still moving forward, but decisions have become more selective. Regulation, trade, energy costs, technological maturity, and access to capital now all weigh at the same time. In that sense, pragmatism is not a retreat from the goal. It is how industry is trying to sustain it on a more fragmented playing field.