Spain's Advanced Biofuels Revolution: Investment Opportunities in the EU Decarbonisation Era (2026–2050)
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Enerdealers Editorial
Spain’s biofuels industry is entering a scale‑up phase in which advanced HVO, SAF and biomethane are set to become the main growth and value drivers, while legacy FAME biodiesel and 1G ethanol stabilize under stricter sustainability and ILUC rules.
Why Spain Matters For Biofuels
Spain combines three structural advantages that make it a strategic biofuels hub for traders, investors and downstream fuel professionals: abundant sustainable feedstock, under‑utilised refining and biorenfining assets, and one of the EU’s most ambitious transport decarbonisation trajectories. Biofuels are already embedded in the fuel mix—biocombustibles supplied 9.85% of road fuel energy in 2022, close to the 10% target, and minimum obligations rise to 11% in 2024 and 12% in 2026.
From a market perspective, Spain’s biofuels value pool is shifting from a volume‑driven compliance play to a margin‑driven, mandate‑anchored platform centred on 2G HVO, SAF and renewable gases, with green hydrogen and e‑fuels adding optionality beyond 2030. For traders and investors, this implies a transition away from short‑term arbitrage on FAME imports toward long‑dated offtake‑backed investments in advanced capacity and feedstock chains.
Anti‑dumping measures against Chinese biodiesel and HVO imports (12–36.4% duties) add a protective layer for domestic producers
Regulatory And Policy Framework
Spain’s market is effectively “policy‑made”, with RED III, national decrees and sector‑specific EU regulations locking in structural demand for certified sustainable fuels across road, aviation and maritime.
RED III and national transposition
RED III raises the transport renewable share to 29% by 2030, with at least 5.5% advanced biofuels (Annex IX‑A) and 1% RFNBOs (renewable fuels of non‑biological origin).
Spain’s Royal Decree 376/2022 sets minimum biofuel sales obligations reaching 12% (energy) from 2026, and Spain’s draft PNIEC targets 28% renewable transport energy by 2030, above the former EU RED II trajectory.
Technology‑specific mandates
ReFuelEU Aviation obliges 2% SAF in 2025, 6% in 2030 and 70% by 2050 at EU airports, implying 150–200 kt/y SAF demand in Spain by 2025 and around 600 kt/y by 2030 given its role as Europe’s second aviation market.
FuelEU Maritime requires a 2% reduction in shipping GHG intensity by 2025 and 6% by 2030, creating a demand pool for marine biofuels, bio‑methanol and RFNBOs around ports such as Algeciras, Valencia and Barcelona.
Feedstock and sustainability constraints
Spain is phasing out palm‑oil based biofuels as “high ILUC risk” by 2025, pushing refiners towards waste‑based 2G feedstocks (UCO, animal fats, agricultural residues) that receive double‑counting and higher compliance value.
Order TED/1342/2022 caps 1G crop‑based biofuels at 2.6% of transport energy from 2025, below the 5.1% ceiling allowed by EU law, structurally constraining growth in conventional ethanol and FAME unless policy is revised.
Anti‑dumping measures against Chinese biodiesel and HVO imports (12–36.4% duties) add a protective layer for domestic producers, easing margin pressure and supporting internal utilisation of Spain’s 4.4 Mt/y biofuel capacity.
Renewable fuels from local feedstock could cover 33–58% of fossil transport fuel energy in 2030. This positions Spain not just as a net consumer, but as a potential exporter.
Feedstock Base And Production Potential
Biomass And Local Resources
Spain is among the top four EU countries in sustainable biomass availability, with around 9% of the Union’s usable residues, driven by agricultural by‑products, forestry residues and organic municipal waste. Concawe‑based scenarios suggest that by 2030 Spain could mobilise sufficient residues to produce up to 10.8 Mtep of biofuels, to which 0.6–1.2 Mtep from sustainable energy crops and 1.2–1.4 Mtep of RFNBOs from biogenic CO₂ could be added.
Overall, renewable fuels from local feedstock could cover 33–58% of fossil transport fuel energy in 2030, cutting 25–43 MtCO₂ per year on a life‑cycle basis if an average 82% GHG saving is achieved. This positions Spain not just as a net consumer, but as a potential exporter of advanced molecules and certificates into Northern European demand centres.
Biogenic CO₂ And RFNBOs
Biogenic CO₂ availability by 2030 is estimated around 4.6 Mt/y, sourced from bioethanol plants, biogas upgrading and biomass power generation. This pool can underpin 1.2–1.4 Mtep of e‑fuels before DAC becomes necessary, which is critical given upcoming limits on fossil‑origin CO₂ for RFNBO production after 2041. In the nearer term, this underwrites Spain’s ambitions in e‑methanol, e‑diesel and e‑kerosene pathways for shipping and aviation RFNBO quotas.
Market Size, Segmentation And Growth
Spain’s total biofuels transport market (domestic consumption) is estimated at roughly €1.05–1.15 billion in 2024, rising to €2.3–2.5 billion by 2030 (12–16% CAGR), with growth heavily skewed to advanced segments.
By fuel type (revenue, 2024E → 2030E)
FAME biodiesel: ~40% share, €425m → €510m, low‑growth “harvest” position (3–4% CAGR).
HVO / renewable diesel: ~26% share, €277m → €765m, high‑growth “invest” segment (15–20% CAGR).
Bioethanol / bio‑ETBE: ~14% share, €149m → €215m, modest growth (5–6% CAGR) linked to E10/E85 penetration.
SAF: ~4% share today, but €43m → €490m by 2030, making it the single fastest‑growing product line (high‑20s to mid‑30s CAGR).
Biomethane: ~5% share, €53m → €180m, driven by grid decarbonisation and HDV fleets.
Biogas (non‑upgraded): ~3% share, €32m → €90m.
Green H₂ and RFNBO‑related fuels: low current base but 40%+ CAGR beyond 2025.
Segments “close to the mandated molecules” (SAF and HVO) enjoy substantial price premia: SAF trades at roughly 180–250% of fossil jet fuel in energy‑equivalent terms, while HVO commands 25–45% premia over conventional diesel, sustained by tight feedstock and double‑counting rules.
Spain hosts 19 biodiesel plants, 7 HVO/hydrobiodiesel units and 4 large bioethanol facilities, yet operates these at only about 43% utilisation.
Generations And Technology Mix
The generation mix is shifting rapidly: 1G crop‑based fuels deliver about 52% of Spain’s biofuel energy today, but their share is expected to fall to 28% by 2030 as policy caps bite. Advanced 2G fuels (waste oils, animal fats, lignocellulosics) are projected to grow from 42% to 62% of the mix, while 3G and RFNBOs expand from 5% to 7%, albeit from a small base.
For traders, this implies decreasing liquidity in standard FAME grades and increasing importance of certified Annex IX‑A/B streams, UCO and animal fat logistics, as well as emerging e‑fuel molecules like e‑methanol and e‑SAF.
Infrastructure, Clusters And Production Capacity
Spain hosts 8 of the EU‑27’s 80 oil refineries (>10% of EU capacity), plus 19 biodiesel plants, 7 HVO/hydrobiodiesel units and 4 large bioethanol facilities, yet operates these at only about 43% utilisation. This slack capacity, combined with integrated logistics (CLH/Exolum pipeline network and port terminals), underpins a cost‑competitive scale‑up in advanced biofuels.
Three industrial clusters dominate:
Andalusia (Huelva, San Roque) – HVO/SAF hub with Cepsa’s La Rábida Energy Park and proximity to the Algeciras port complex.
Mediterranean coast (Cartagena, Tarragona, Castellón) – Repsol’s Cartagena SAF/HVO plant, BP Castellón HVO unit and strong export routes to France and Italy.
Atlantic / North (Bilbao, A Coruña, Puertollano) – Repsol multi‑site HVO, biomethane projects and early green hydrogen initiatives.
Cepsa (now Moeve) and Bio‑Oils are building a €1.0–1.3 billion 2G HVO/SAF plant in Huelva (500 kt/y capacity, operational from 2026), which together with existing facilities will bring their total renewable fuel capacity in the area to about 1 Mt/y, making it the second‑largest complex in Europe. Repsol’s 250 kt/y Cartagena SAF/HVO plant will enter service around 2025, adding to smaller HVO units at Bilbao, A Coruña, Puertollano and Tarragona.
On the gas side, biomethane is still nascent but scaling: Spain’s current output is modest, yet project pipelines (Naturgy, Verdalia and others) point to multi‑TWh portfolios by 2030, equivalent to hundreds of thousands of household consumption and significant avoided emissions.
The Spanish advanced biofuels market is oligopolistic but opening, with three integrated oil companies controlling most liquid biofuel capacity
Competitive Landscape
The Spanish advanced biofuels market is oligopolistic but opening, with three integrated oil companies controlling most liquid biofuel capacity and a growing group of specialised renewable gas developers.
Moeve (Cepsa) – 28–32% biofuels share in 2024E, flagship 500 kt/y Huelva 2G HVO/SAF plant backed by a €285m EIB loan and long‑term feedstock agreement with Apical. Its strategy is to become Southern Europe’s leading 2G producer, leveraging port access and green H₂ projects (“Valle Verde de Hidrógeno”).
Repsol – 25–30% share, multi‑site HVO/SRAW network and 250 kt/y Cartagena advanced plant, plus long‑term SAF contracts with Iberia, Ryanair, Air Europa and others (155 kt/y SAF commitment for 2025–2030). RSB Book‑and‑Claim certification enables participation in global SAF certificate markets, important for traders.
BP Spain – 10–14% share, centred on Castellón HVO capacity integrated into BP’s global SAF and bioenergy portfolio and supported by a strategic collaboration with Iberdrola on renewable power and hydrogen.
Naturgy – 8–12% share in biomethane/biogas, focusing on agri‑waste projects like Torrefarrera (60 GWh/y) and wider portfolios of 1.6–2.5 TWh/y biomethane with multiple partners, exploiting its unique position as Spain’s main gas network operator.
Verdalia Bioenergy (Goldman Sachs) – a PE‑backed pure‑play biomethane developer targeting 500+ GWh/y in early phases and potentially >2 TWh/y, aggregating fragmented feedstock and selling under long‑term gas sales agreements.
Overall, the market offers deep pockets, refinery synergies and regulatory know‑how from incumbents, while independent platforms can capture high‑IRR niches in feedstock aggregation, biomethane clusters and service businesses (e.g. SAF book‑and‑claim trading).
Economics, Costs And Barriers To Entry
Advanced biofuel projects in Spain are capital‑intensive but often backed by visible mandates, public funding and premium pricing.
CAPEX benchmarks and IRRs
HVO/SAF plants: roughly €200m–€1.5bn depending on size and level of integration; Spain’s flagship plants fall in the €1.0–1.3bn range.
Biomethane platforms: €30–200m for 10–15 plants totalling 50–100 GWh/y, structured as infrastructure assets with grant co‑financing from IDAE and regional programs.
RFNBO projects (PtL): €100–800m for first‑of‑a‑kind e‑SAF or e‑methanol facilities, with economics highly sensitive to power price (<€30/MWh needed to compete with grey H₂).
Indicative pre‑tax IRRs for 2025–2030 Spanish projects cluster around 12–18% for SAF plants (with secured offtake), 10–15% for biomethane platforms, 14–20% for 2G feedstock aggregation and 8–13% for green hydrogen co‑production used as hydrotreating feedstock.
Key barriers and risks
Feedstock access is the primary bottleneck: Spanish UCO output is estimated at 0.8–1.2 Mt/y but is contested EU‑wide, while Annex IX‑B fats are capped and competition for Annex IX‑A residues is intensifying.
Regulatory complexity (ISCC/RSB certification, RED sustainability criteria, national orders) adds 18–36 months to project timelines and requires robust chain‑of‑custody systems.
Permitting and grid access for renewable gas can take 2–4 years, as environmental approvals and gas network upgrades lag project pipelines.
Spain’s risk matrix for advanced biofuels highlights high probability/high impact feedstock scarcity and policy uncertainty around RED III implementation, with moderate risks around anti‑dumping reversals, power price volatility and administrative delays.
At EU level, the Green Deal and “Fit for 55” package target at least a 55% GHG reduction by 2030 versus 1990 and a 90% cut in transport emissions by 2050
Growth Market Driven By EU Decarbonisation To 2050
The European Union’s climate architecture to 2050 effectively hard‑wires long‑term structural growth for sustainable fuels, particularly in hard‑to‑electrify segments where Spain is well positioned as a production hub.
At EU level, the Green Deal and “Fit for 55” package target at least a 55% GHG reduction by 2030 versus 1990 and a 90% cut in transport emissions by 2050, with climate neutrality for the overall energy system by mid‑century. Within this framework, the revised Renewable Energy Directive sets a binding requirement that transport must either reach a 29% renewable share or deliver a 14.5% GHG‑intensity cut by 2030, including a 5.5% combined sub‑target for advanced biofuels and renewable hydrogen.
Beyond 2030, sector‑specific regulations translate these objectives into predictable volume ramps that create a multi‑decade growth lane for advanced biofuels, SAF and RFNBOs.
ReFuelEU Aviation requires SAF to rise from 2% of aviation fuel in 2025 to 6% in 2030, 20% in 2035, 34% in 2040, 42% in 2045 and 70% by 2050, with minimum shares of synthetic e‑fuels built into the mandate. In parallel, FuelEU Maritime progressively tightens the GHG intensity of marine fuels, implicitly pushing shipping towards bio‑methanol, renewable diesel, ammonia and e‑fuels for long‑range vessels where direct electrification is impractical.
Modelling exercises for the EU energy system show that even under very ambitious electrification pathways, significant volumes of carbon‑neutral e‑fuels and advanced biofuels are needed by 2050 to replace residual fossil use in aviation, maritime and parts of heavy industry, especially if reliance on CCS is to be contained.
For Spain, this regulatory trajectory translates into three distinct growth waves that traders, investors and industrial players can already map. The 2025–2030 phase is dominated by scaling 2G HVO, SAF and biomethane to meet RED III and the initial ReFuelEU/FuelEU targets, supported by growing demand from airlines, shipowners and logistics operators who need compliance molecules quickly.
Between 2030 and 2040, the combination of higher SAF and maritime requirements, a broader EU RFNBO sub‑target and continued electrification of light‑duty road transport shifts incremental growth towards SAF, marine bio‑fuels and RFNBOs, while 1G fuels plateau or decline under tighter caps.
From 2040 to 2050, the steep ramp‑up in SAF and synthetic fuel obligations, combined with an overall EU drive towards a near‑zero fossil system, implies a substantial build‑out of e‑fuels capacity—particularly e‑kerosene and e‑methanol—on top of mature advanced biofuels, making Spain’s low‑cost renewables and biogenic CO₂ resources a key competitive asset in supplying both domestic and Northern European demand.Growth Market Driven By EU Decarbonisation To 2050
Role In Transport Decarbonisation And Competition With Electrification
Biofuels in Spain are not positioned as an alternative to electrification, but as a complementary, technology‑neutral tool to accelerate emissions cuts, particularly in hard‑to‑electrify segments.
Current impact and potential
Biocarburants consumed in 2022 (1.4 Mtep) avoided 4.65 MtCO₂, equivalent to tailpipe emissions of around 3.3 million new cars sold in Spain between 2019 and 2022.
Each additional 1 percentage point of renewable fuel in Spanish road fuels reduces emissions by an amount equivalent to deploying roughly 425,000 battery electric vehicles, about 15% more than the entire “zero‑label” fleet in 2023.
Scenario modelling to 2030 shows that a “biofuels+EV” pathway with 3.6 million EVs and a 20% renewable fuel share can deliver about 10% more GHG savings in road transport than the draft PNIEC scenario of 5.5 million EVs and a 12% biofuels share, at lower public cost per tonne of CO₂ abated. Over 2016–2030, accumulated emissions reductions attributable to biofuels are projected to be 3–5 times higher than those from EVs, largely because biofuels act on the existing combustion fleet.
In aviation and maritime, battery and hydrogen options are constrained by energy density, storage requirements and fleet turnover, making SAF, bio‑methanol, ammonia and other renewable fuels essential to meet EU and IMO targets. For Spain’s transport and logistics sector (~€117bn GVA and nearly 1 million jobs), this creates both compliance pressure and an opportunity to leverage existing assets with low incremental capex.
Conversion of under‑utilised biorrefineries and refineries into multi‑energy hubs can unlock stranded assets while retaining >200,000 jobs in refining, logistics and distribution.
Strategic Opportunities For Traders, Investors And Industry Professionals
For Physical Traders And Marketers
Shift from generic FAME to certified 2G molecules: building secure access to Annex IX‑A/B feedstock streams (UCO, animal fats, residues) in Spain and neighbouring countries is becoming the core trading asset, with structural pricing power.
SAF and HVO optionality: securing mid‑to‑long‑term offtake or tolling agreements with Spanish refiners provides exposure to high‑margin SAF and HVO volumes linked to ReFuelEU and national blending mandates.
Book‑and‑claim and certificates: Spain’s early adoption of RSB and CORSIA‑compliant SAF certification opens a growing market for virtual decarbonisation products for airlines and logistics customers, a space where traders can intermediate between producers and end‑users.
For Financial Investors And Strategic Entrants
Biomethane platforms: portfolios of 10–20 plants in agricultural regions (Catalonia, Castilla y León, Galicia, Extremadura) structured as regulated infrastructure can deliver attractive risk‑adjusted returns, especially when bundled with CO₂ capture for RFNBOs.
2G feedstock aggregation: roll‑up platforms in UCO collection and animal fat logistics require €10–80m of capital but are central to value capture, with IRRs in the mid‑teens and a strong strategic exit angle to refiners.
Co‑investment JVs with refineries: minority stakes in HVO/SAF projects provide exposure to premium molecules without bearing all execution risk, and can often be de‑risked via EIB loans, PERTE ERHA grants and long‑term offtake.
Green hydrogen as a captive input: colocated electrolysers feeding hydrotreaters provide a path to green H₂ monetisation without needing large‑scale hydrogen transport infrastructure, especially in high‑solar regions.
For Industrial Players And Project Developers
Conversion of under‑utilised biorrefineries and refineries into multi‑energy hubs can unlock stranded assets while retaining >200,000 jobs in refining, logistics and distribution.
Rural development strategies around energy crops (within EU sustainability limits) and residue collection can mobilise up to 700,000 ha of agricultural land, create more than 54,000 jobs and add ~€4 billion in GVA in the medium term.
Outlook And Key Uncertainties
In the 2025–2030 window, the central scenario is a rapid scale‑up of 2G HVO/SAF capacity and biomethane projects, stabilisation or moderate growth in FAME and 1G ethanol, and pilot‑scale RFNBO deployments anchored by Spain’s green hydrogen and biogenic CO₂ resources. The long‑term (post‑2030) trajectory will depend on:
How aggressively Spain chooses to relax or maintain national caps on crop‑based biofuels versus the EU maximums.
The speed of EV adoption versus the political willingness to support fuel‑side decarbonisation through differentiated taxation and incentives.
The evolution of EU‑wide CO₂ pricing, ETS extension to transport and maritime, and global competition for sustainable feedstocks.
Policy support remains the biggest swing factor: agencies like IEA and IRENA recognise that cost‑competitive renewable fuels exist, but without stable, long‑dated policy they will not scale to the volumes needed for net‑zero.
Conclusions
Spain has the ingredients to consolidate itself as a leading European hub for advanced biofuels, especially HVO, SAF and biomethane, underpinned by strong resource endowments, under‑used industrial assets and ambitious decarbonisation policy. The industry is transitioning from a first‑generation, mandate‑compliance model to a more sophisticated ecosystem where certified 2G feedstock, advanced molecules and digital certificate platforms are the principal value drivers.
For traders, this means pivoting towards advanced molecules, long‑term offtakes and sustainability‑driven arbitrage rather than just bulk biodiesel flows, while carefully managing feedstock and regulatory risk. For investors, Spain offers a spectrum of opportunities—from infrastructure‑like biomethane platforms to higher‑risk, higher‑reward SAF and RFNBO projects—often with public co‑financing and visible demand through EU mandates.
For industrial players and policymakers, the challenge is to unlock Spain’s full 13–14 Mtep renewable fuel potential by 2030 while balancing food security, rural development and environmental integrity, and to ensure that biofuels are deployed as a complement—not a competitor—to electrification in the race to decarbonise transport.
Sources
“Biofuels Industry in Spain – Strategic Market Study,” Strategic Research Advisory Division, Feb 2026.
NTT Data – “Combustibles renovables: una vía eficaz para la descarbonización del transporte,” 2024.
ECODES – “Report on the State of Biofuels in Spain.”
YCharts / Energy Institute – Spain Biofuels Production statistics (PJ, 2023–2024).
ReportLinker – “Spain Biofuel Industry Outlook 2024–2028.”
IEA AMF – “Advanced Motor Fuels in Spain” (targets and mandates overview).
GreenAir News, OfiMagazine – Cepsa/Apical SAF–HVO project in Huelva.
Naturgy, Verdalia Bioenergy – biomethane project announcements and capacities.
