The European Investment Bank (EIB) and Cepsa have just signed a €285 million loan to finance the construction of a second-generation biofuel plant located next to the La Rábida Energy Park in Palos de la Frontera, Huelva. The plant, which Cepsa is building together with Bio-Oils, will produce sustainable aviation fuel (SAF) and renewable diesel (HVO) from organic waste, such as used cooking oil or agricultural waste, among others. Once operational, the plant is expected to be able to process 600,000 tonnes per year (tpa) of waste to produce up to 500,000 tpa of second-generation biofuels, thus promoting the circular economy.
Biofuels will be used in sectors of the economy where decarbonisation and electrification are complex, such as air transport, maritime transport and even heavy road transport. Biofuels are an immediate solution to reduce CO2 emissions in this sector, without making changes to current engines. For Gilles Badot, Director of Operations for Spain and Portugal at the EIB, “this loan is a clear example of how the EIB is also promoting the energy transition in sectors that are difficult to decarbonise. This project contributes to making Spain a leader in the production of biofuels. Supporting companies that invest in this transition and advance their own decarbonisation strategy, such as Cepsa, is one of the EIB’s lines of action to accelerate the transition towards a more sustainable energy model that contributes to the energy autonomy of the European Union.”
The investment by Cepsa and Bio-Oils is taking place entirely in Andalusia, a cohesion region where per capita income is below the European Union average. Given the scope of the project, it is expected to have a positive impact on the local economy by boosting growth and job creation. The loan signed with Cepsa therefore contributes significantly to the Bank’s commitment to economic, social and territorial cohesion. “We appreciate the EIB’s support for this key project for our Positive Motion strategy, but also for Spain and Europe to move forward in the necessary energy independence. This plant will allow us to take a giant step in the production of green molecules, with the aim of facilitating the immediate decarbonisation of transport by land, sea and air, achieving a reduction of up to 90% in CO2 emissions compared to traditional fuels,” said Maarten Wetselaar, CEO of Cepsa.
This project contributes to achieving the decarbonisation objectives of the European Green Deal and is part of the EIB’s action programme to support the REPowerEU plan to ensure energy security and reduce the European Union’s dependence on fossil fuel imports.
The project is supported by the InvestEU programme, a European Union programme to mobilise more than 372 billion euros of additional investment in the period 2021-2027 and contributes to one of the main objectives, which is the development of the energy sector and the sustainable bioeconomy.
This is the third financing operation for Cepsa in the last two years in line with the acceleration of its decarbonisation strategy, the previous ones being an 80 million euro loan to finance photovoltaic plants in Andalusia and a 150 million euro loan to finance the deployment of the company’s network of electric charging points in Spain and Portugal.
Energy security
In 2023, the EIB Group signed financing worth more than €21 billion for energy security in Europe. In Spain, this objective reached €4.513 billion in the same year, which was allocated to the financing of renewable energy projects, energy efficiency, electricity grids and storage systems, among others. These investments are helping Europe to accelerate the transition towards the use of sustainable energies and reduce its dependence on fossil fuel imports.
In July 2023, the EIB Board of Directors decided to increase up to €45 billion the funds allocated to REPowerEU projects, the plan designed to end Europe’s dependence on fossil fuel imports. The EIB has also decided to expand the range of sectors
eligible to boost EU manufacturing industry financing for strategic cutting-edge net-zero carbon technologies, as well as the extraction, processing and recycling of critical raw materials. This additional financing will be distributed between now and 2027 and, in total, is expected to mobilize more than €150 billion in investments in the sectors to which it is directed.