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The Industry & Energy Transition Index: Spain

Renewable molecules adoption

Progress in terms of biogas/biomethane, biofuels, and green hydrogen adoption

Biogas production is estimated to have reached 8.4 terawatt hours (TWh) in 2022, relatively stable since 2019.

Biofuels in the transport sector have increased between 2019 and 2022 but are not on track to reach the goal. Nevertheless, the progress should be enough to reach the minimum target imposed by the EU RED III directive—5.5 percent advanced biofuels and renewable fuels of non-biological origin (RFNBOs).

Green hydrogen installed capacity is currently 50 megawatts and hardly on track to reach the 2030 target, even considering a delayed growth closer to the objective timing (“hockey stick curve”).

Though the three indicators lag the trajectory curves to reach the 2030 PNIEC goals, there is clear potential for growth—for example, the technical biomethane feedstock potential in Spain is 39 TWh;¹ the announced hydrogen projects for Spain sum over 20 GW of electrolyzer capacity in 2030.²

Subindicators

Biogas and biomethane | Biofuels | Green hydrogen

Indicator definition

The renewable molecules adoption indicator is the combination of three subindicators: (1) production of biogas or biomethane; (2) share of biofuels in transport; and (3) green hydrogen capacity in final investment decision (FID), construction, or operation.

Progress assessment

Each subindicator’s progress is calculated against official PNIEC targets. The umbrella indicator takes the results of the three subindicators in equal proportion, that is, one third each.

As the three subindicators are lagging, the umbrella indicator takes that same status.

Methodological note: While there are specific PNIEC targets for all three subindicators, there is a lack of clear historical data from official public sources. As a result, the historical data points—necessary for plotting trajectory curves—were estimated using the best available public data. Considering the importance of these targets and the need for transparent tracking, we recommend and expect the development of new public data sources to provide regular reporting on progress.

Biogas and biomethane

Biogas and biomethane production have been stable but, despite potential, may not meet the 20 terawatt-hour target in 2030.

Subindicator definition

Total production of biogas and biomethane in Spain.

Progress assessment

The most recent production output is 8.4 TWh in 2022, based on the European Biogas Association data.³ To assess progress, a linear curve between 2019 and 2030 is considered, the arrival reference being the PNIEC’s latest target of 20 TWh. To that curve, a standard deviation (10 percent)⁴ is removed or added to create an on-track range. As the most recent progress is below that range, the status is lagging.

Biofuels

Spain is not on track to reach its biofuels targets, although likely to comply with the 5.5 percent minimum defined by the European Union.

Subindicator definition

Share of renewable fuels of nonbiological origin and advanced bios or biogas in total fuels used in the transport sector, following the EU directive promoting the use of energy from renewable sources (Annex IX, part A).

Progress assessment

The most recent share is 4.4 percent in 2023, calculated based on MITECO data.⁵ To assess progress, a linear curve between 2021 and 2030 is considered, being the arrival reference the PNIEC’s latest target of 17.26 percent. To that curve, a defined buffer of 10 percent is removed or added to create an on-track range. As the most recent progress is below that range, the status is lagging.

Green hydrogen

Despite a long pipeline of announcements, the capacity for green hydrogen that is in or near operation lags significantly.

Subindicator definition

Renewable or green hydrogen capacity in GW in final investment decision (FID, post-permitting phase), ongoing construction, or operation.

Progress assessment

The most recent capacity in FID, construction, or operation is 0.2 GW in 2024, based on our own hydrogen project tracker.⁶ A curve for operational capacity was first drawn between 2024 and 2030, taking into account today’s installed capacity of 50 MW, as well as the PNIEC’s 12 GW target. This curve takes an exponential shape, with delayed adoption closer to the target’s timing. A second curve was drawn for FID, with the same configuration and parallel to the first curve, with a two-year period between the two curves.⁷ In practice, the FID curve reaches the 12 GW cumulative capacity target in 2028 instead of 2030. The progress assessment is focused on this second curve: in 2024, there is 0.2 GW of FID per construction or operational hydrogen capacity when the on-track range suggests it should be between 250.0 and 370.0 MW (considering a standard deviation of 20 percent)⁸ to meet the production targets two years later. The assessment is therefore lagging.

_{¹ According to estimates from the European Biogas Association (EBA).

² Hydrogen project tracker based on press announcements.

³ Data on biogas or biomethane production is not widely available nor consistent across sources—the EBA was considered the source of truth for this analysis.

⁴ Base standard deviation for our analysis is 2014–19; in this case 10 percent was used due to almost nonexistent variability in the historical values.

⁵ Data up to 2022 based on the SHARES submission; 2023 calculated based on MITECO’s data broken down by fuel type and feedstock.

⁶ No official data source reports on this target—a project tracker was built based on public information in the press.

⁷ Our analysis suggests a two-year period between FID and operations.

⁸ Base standard deviation for our analysis is 2014 to 2019; in this case 20 percent was used to capture higher variability related to as nascent technology such as hydrogen.}

Detail view

Energy transition KPIs

Greenhouse gas emissions reduction Renewables in energy mix Electric vehicle sales Renewable molecules adoption Energy dependency Network readiness Household electricity prices Industry electricity prices

Industrialization KPIs

Industrial gross value added Vehicle production Investment in fixed assets R&D investment Industry employment Industry exports