The Energy Industry: Key Sectors Driving Transformation in Spain
The energy sector in Spain is currently leading a profound industrial transformation. This change is unfolding within an environment dedicated to reducing CO2 emissions, spearheading research into renewable hydrogen applications, innovating fuels from used cooking oil, and developing advanced recycling methods to give waste a second life.
Focus Area 1: Renewable Fuels and Refining
Refining is among the industrial sectors undergoing the most dramatic shifts to remain competitive and meet society's energy demands. Traditional refining plants are evolving into **multi-energy centers**. These hubs utilize a wide variety of alternative raw materials and waste streams to manufacture low-carbon footprint products. Among these, **renewable fuels** stand out as critical components for the decarbonization of road, maritime, and air transport.
In a significant step, [Company Name Removed] inaugurated the first large-scale plant on the Iberian Peninsula dedicated to producing 100% renewable fuels in 2024. Furthermore, they recently announced an €800 million investment in Tarragona to construct a pioneering European plant that will treat urban waste to produce circular products and renewable methanol. According to the fuels producers association, approximately 30 renewable fuel plants are currently under construction across Europe, projected to produce over 7.6 million tonnes annually by 2030. These new facilities are paramount to significantly reducing the transport sector's carbon footprint.
Focus Area 2: The Chemicals Industry and Circularity
The chemicals industry is positioned to make a significant contribution to competitiveness across several key aspects, acting as a major channel for investment and talent development. Spain leads industrially in the hiring of researchers and in R+D+I investment, channeling over 2 billion annually—24% of the sector's total investment. This drive promotes new technologies supporting both decarbonization and the circular economy.
An excellent example of this innovation is chemical recycling which enables the complete utilization of waste materials to produce new raw materials. These new materials can then be used to manufacture products intended for highly sensitive applications, including medical and food sectors.
The chemicals sector also plays a crucial role in the reduction of the carbon footprint. Technologies such as artificial photosynthesis, which mimics the natural process with far greater efficiency, and the utilization of captured CO2 for producing useful compounds, clearly demonstrate the industry's commitment to reducing greenhouse gas emissions. Moreover, the chemicals industry is essential for advancing digital and energy technologies, supplying the batteries and digital infrastructure necessary to drive CO2 reductions across other sectors.
Focus Area 3: Renewable Hydrogen
For the European Union, renewable hydrogen, produced through the electrolysis of water, is anticipated to be one of the main vectors for decarbonization in the coming decades, particularly within industrial processes. Despite its immense promise, the path is challenging due to high current production costs and the lack of existing supply infrastructure, which complicates ensuring a return on investment.
These initiatives critically require industrial policy and strong institutional support to overcome technological and economic barriers. The International Energy Agency (IEA) estimates that global annual production of low-emission hydrogen could reach 38 million tonnes by 2030 if all announced projects proceed. However, the IEA notes that only 4% of these projects have secured final investment decisions, primarily due to funding difficulties, supply chain limitations, and escalating production costs.
Despite these barriers, interest in Spain is accelerating. Up to June 2024, approximately 650 million euros of the 1.555 billion available in aid programs for renewable hydrogen had been allocated to 39 projects, representing a combined electrolysis capacity of 772 MW, according to [Organization Name Removed]. Furthermore, an additional 166 production projects are currently under study, totaling an impressive 22 GW of potential capacity.
Focus Area 4: Biomethane
Biomethane is emerging as a strategic renewable gas within the European industrial landscape. The European Union has set an ambitious target to increase its production, alongside biogas, to 35 billion cubic meters by 2030. Currently, Europe is home to over 1,300 operational biomethane plants.
Biomethane is derived from organic matter, predominantly agricultural and livestock waste. This production process is critical because it helps reduce CO2 emissions from the primary sector by preventing the waste from being deposited in landfills or burned. The resulting biomethane can be injected directly into the existing gas network and utilized as a direct substitute for natural gas in industrial processes (especially those requiring very high temperatures difficult to electrify) and for home heating or cooling. Beyond energy, it has other industrial uses, including the production of renewable hydrogen and the manufacture of chemical products.
With about a dozen plants in production, biomethane is a developing sector in Spain. The country possesses enormous potential for this renewable gas, owing to its large agricultural, agri-food, and waste management sectors. According to the [Organization Name Removed], Spain has the resources to establish over 2,000 specialized plants, which could generate around 62,000 direct and indirect jobs. In total, this sector could potentially produce 163 TWh/year, amounting to nearly half of the country's annual natural gas consumption.
Frequently Asked Questions (FAQ)
What are multi-energy centers in refining?
These are traditional refining plants being transformed to use a wide range of **alternative raw materials and waste** (like used cooking oil or urban waste) to produce low-carbon footprint products, particularly **renewable fuels**.
How does the chemicals industry contribute to the circular economy?
A key contribution is **chemical recycling**, which allows for the complete breakdown and reuse of waste to produce new, high-quality raw materials, including those for food or medical products.
What are the main barriers to renewable hydrogen adoption?
The primary barriers are the **still-high production costs**, the **lack of a sufficient supply infrastructure**, and **funding difficulties**, which prevent a solid return on investment, as noted by the IEA.
Where does biomethane come from and how is it used?
Biomethane is produced from **organic matter**, such as agricultural and livestock waste. It can be injected into the existing gas network and used as a **substitute for natural gas** in industrial heating, cooling, or as a fuel.