The Second Party Opinion issued by S&P assessed the Green Financing Framework’s alignment with the Green Loan Principles 2025 of the Loan Market Association (LMA), the Loan Syndications and Trading Association (LSTA), and the Asia Pacific Loan Market Association (APLMA). The agency applied the “Shades of Green” methodology — which classifies investments from their contribution to a low-carbon, climate-resilient future (LCCR), and their ability to deliver sustainable outcomes for climate and non-climate environmental objectives.
The outcome was a Medium Green rating, the second-highest score on this scale. This rating recognizes activities representing progress toward a LCCR future that still require further improvements to be considered long-term solutions. The main distinction from the Green category lies in the use of green hydrogen, which is not commercially scalable nor economically competitive at a global level.
S&P emphasized the replacement of blast furnace-produced imported slabs by those manufactured using Direct Reduced Iron (DRI) and Electric Arc Furnace (EAF) technology. According to the International Energy Agency, this pathway is regarded as the long-term low-carbon solution for the steel industry. The shift will enable Pesquería to deliver products with a greenhouse gas intensity significantly below the global sector average and is aligned with Ternium’s goal of reducing hot-rolled steel emission intensity by 15% by 2030, covering scopes 1, 2, and 3 (Category 1 and 10).
The opinion also highlights the adoption of complementary decarbonization strategies, including energy efficiency, use of renewable energy, circular economy practices, increased scrap utilization, closed-system material handling to prevent dust emissions, wastewater reuse, and designing the plant to be prepared for a future transition to green hydrogen once it becomes economically viable.
Courtesy of Ternium.