Spain | The Opportunity of Carbon Capture for the Spanish Economy

Summary

Carbon capture, utilization and storage (CCUS) can be a strategic opportunity to decarbonize Spain’s industry, boosting its competitiveness and helping meet climate goals. Spain should deploy a strategy that aligns regulations and incentives to support industrial innovation.

Key points

• Key points:
• The opportunity for industrial and transport decarbonization. Spain accounts for 33% of its emissions in hard-to-abate industries, where CCUS can help preserve jobs and competitiveness, especially in industrial regions. It could also foster new ecosystems around green hydrogen and sustainable fuels, key to decarbonizing air and maritime transport.
• Challenges: profitability and regulation. Many CCUS technologies are still not profitable (capturing CO₂ costs more than emitting it), but this gap is narrowing as carbon prices rise and free permits are phased out. Spain’s main challenge lies in the absence of a clear national strategy and regulatory framework to drive CCUS development.
• The advantages of the Spanish economy. Spain has strategic resources for CCUS development: abundant renewable-based electricity, favorable geological conditions for CO₂ storage, and strong industrial R&D capabilities to scale sustainable and competitive carbon capture and utilization solutions.
• Levers to turn opportunity into reality. Spain needs a national CCUS strategy with clear targets, prioritized industrial hubs, and mobilized public-private investment. A regulatory framework aligned with the EU is essential to ensure legal certainty, enable cross-border projects, and promote green innovation incentives.

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