Renewable fuels

Refining is another of the industrial sectors that is transforming its processes most to continue to be competitive and be able to supply society with the energy it needs. These plants are being transformed into multi-energy centers that use a wide variety of alternative raw materials and waste to manufacture low-carbon footprint products and materials, among which renewable fuels stand out, which will play a key role in the decarbonization of road, maritime, and air transport.

In Spain, Repsol inaugurated the first large-scale plant on the iberian peninsula dedicated to the production of 100% renewable fuels in 2024, and has just announced an €800 million investment in Tarragona to build a pioneering plant in Europe for treating urban waste to produce renewable methanol and circular products. According to FuelsForEurope, the fuels producers association, today around 30 renewable fuels plants are being built in Europe, which will produce over 7.6 million tonnes annually by 2030. These plants will be key to reducing the transport sector's carbon footprint.

Chemicals industry

The chemicals industry can also significantly contribute to competitiveness in various key aspects, taking into account that it is one of the main channelers of talent and investment. Spain is the industrial leader in the hiring of researchers, as well as in R+D+I investment, with over 2 billion annually, 24% of the sector's total, which promotes the creation of new technologies that support decarbonization and the circular economy. An example of this innovation is chemical recycling, which allows the complete use of waste and the production of raw materials that will serve to manufacture products that can even be destined to medical and food applications.

Moreover, the chemicals industry plays a crucial role in the reduction of the carbon footprint. Technologies such as artificial photosynthesis, which imitates the natural process with much greater efficiency, and the use of captured CO₂ for the production of useful compounds, are clear examples of how this industry is helping to reduce greenhouse gas emissions. Moreover, the chemicals industry is essential for the development of digital and energy technologies, such as sustainable batteries and infrastructure necessary for digitalization, which are fundamental to reduce CO₂ emissions. These advances not only strengthen the competitiveness of the chemicals industry, but also promote other industrial sectors in their decarbonization processes.

Renewable hydrogen

For the European Union, renewable hydrogen, produced from the electrolysis of water, will be one of the main vectors of decarbonization in the coming decades, especially in industrial processes. Despite its promising future, the still high production costs and the non-existence of a supply infrastructure does not ensure a return on investment.

It is these types of initiatives in which industrial policy and institutional support are essential to overcome the economic and technological barriers. By way of example, the International Energy Agency (IEA) estimates that the annual production of low-emission hydrogen could reach 38 million tonnes by 2030 if all the global projects announced were carried out. However, it estimates that only 4% of projects have final investment decisions due to funding difficulties, lack of supply, and rising production costs.

But interest seems to be growing. Up to June 2024, in Spain around 650 million euros of the 1.555 billion available in aid programs related to renewable hydrogen had been used in 39 projects with a combined electrolysis capacity of 772 MW, according to data from Funcas in an analysis on the role of hydrogen in the energy transformation. Moreover, there are another 166 production projects under study with 22 GW of capacity.

Biomethane

One of the emerging industries in the European industrial panorama is that of biomethane, a renewable gas considered strategic by the European Union, which has set as an objective to increase its production and that of biogas to 35 billion cubic meters by 2030. For now, in Europe there are over 1,300 biomethane plants.

Biomethane is produced from organic matter, such as agricultural and livestock waste, which allows the reduction of the CO2 emissions of the primary sector, by preventing burning or deposit in landfills. The resulting biomethane can be injected into the current gas network and used as a substitute to natural gas for heating or cooling of homes and as a fuel in industry, where processes with very high temperatures are very difficult to electrify. Moreover, it has other industrial applications, such as the production of fuels and renewable hydrogen or the manufacture of chemical products.

With a dozen plants under production, biomethane is a developing sector in Spain. Spain has great potential to produce this renewable gas, as it has large industries in the agricultural, agri-food, and waste management sectors. According to the Spanish Gas Association (Sedigas), it has resources to start up more than 2,000 specialized plants, which would represent the generation of around 62,000 jobs, both direct and indirect, associated with its operation and maintenance. In total, it could produce 163 TWh/year, almost half of the annual natural gas consumption.