Overview
The consequences of climate change in Spain are devastating in many parts of the country, with storms, floods, and droughts that affect cities and rural areas. Heatwaves that begin in early spring are stronger, longer, and more numerous, affecting health and the stability of the agribusiness sector. Average annual temperatures increased in the Iberian Peninsula in the past five decades, extending the length of summer. On average, the rise has been 3.54°C in maximum temperatures and 2.73ºC in minimum temperatures in the main cities of Spain, from 1971 to 2022. These temperatures are among the most pronounced climatic anomalies in the world.
Spain’s national climate initiatives established detailed actions to enhance climate resilience. The integrated National Energy and Climate Plan (PNIEC) and the Long-Term Strategy for a Modern, Competitive, and Climate-Neutral Economy by 2050 also underscore climate resilience and suggest concrete actions. These plans are closely linked under Spain’s Strategic Energy and Climate Framework. The Climate Change and Energy Transition Law aims for a 100% renewable electricity system. It outlines Spain’s long-term goal of achieving climate neutrality and decarbonizing the economy by 2050. Municipalities with over 50,000 residents and island territories are mandated to implement sustainable urban mobility plans by 2024 through mitigation measures. Targets for 2030 include a minimum 32% reduction in greenhouse gas emissions from 1990 levels, achieving 42% renewable energy in final consumption, 74% renewable electricity generation, and improving energy efficiency by reducing primary energy consumption by at least 39.5%. By 2040, all new passenger cars and light commercial vehicles must be emission-free.
Spanish government has already prepared a draft update of 2023-2030 PNIEC. The new update includes some objectives consistent with the reduction of emissions adopted at European level that are being translated into the following goals in 2030:
- 32% reduction in greenhouse gas emissions compared to 1990
- 48% of renewables on energy end-use
- 44% improvement in energy efficiency in terms of final energy
- 81% renewable energy in electricity generation
- 51% reduction in energy dependency
The National Climate Change Adaptation Plan 2021-2030 is based on lessons learned from previous efforts to adapt to climate change and on the latest knowledge about climate change and international commitments. CO2 emissions plummeted to historical low levels in Spain in 2020 because of the COVID-19 pandemic. As soon as activity recovered in 2021, greenhouse gas (GHG) emissions increased by 5.9%. The Spanish economy emitted 304.4 million tons of greenhouse gases in 2022, 3.1% more than in 2021. The manufacturing, agriculture, energy, and transport industries all generate more than 90% of the total GHG emissions (excluding households) in Spain, while contributing only 25% to gross value creation in the Spanish market.
As a result of this stark contrast, the Spanish government is supporting local companies who incorporate sustainability into their business strategies. This government support for sustainable development transforms climate challenges into new business opportunities. The Spanish government has outlined a new regulatory framework for reducing carbon emissions and promoting the development of renewable energy to achieve the objectives of the 2030 Climate Change and Energy Transition Plan, including:
- Spain’s 2025 decarbonization strategy establishes the path for reducing emissions and increasing the number of carbon sinks, every five years.
- The National Adaptation to Climate Change Plan, which is the planning instrument to promote coordinated action against the effects of climate change (strategic objectives, impact indicators and risk reports).
Funding is essential in this ecological transformation. The Recovery and Resilience Plan within the General State Budget is the main tool for channeling the European funds to help Spain recover from the pandemic. This national plan is part of the European Commission’s REPowerEU Plan, implemented in response to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine. Spain’s plan, approved in July 2021, includes reforms and investments to help the country to become more sustainable, resilient, and better prepared for the challenges and opportunities of the green and transitions.
Spain increased the allocation within the Recovery and Resilience Plan with an update in October 2023. The increase is entirely financed by the EU’s Recovery and Resilience Facility (RRF). RRF is a temporary instrument that is the centerpiece of NextGenerationEU - the EU’s plan to emerge stronger and more resilient from the COVID crisis. Spain’s $178 billion plan (€165.5 billion) ($87 billion (€80.9 billion) in RRF grants and $90 billion (€83.7 billion) in loans), with climate objectives accounting for 40% of the plan and 26% for digital transition, must be completed by 2026. It will support green transition through increase of renewable energy production and energy efficiency. As part of energy efficiency, social housing will receive $13 billion (€12.1 billion) investment and mobility and $14 billion (€13 billion) for transportation sustainability. Challenges include preservation of ecosystems and biodiversity, agri-food and fishing sectors, and the water and waste management sectors. The plan also includes measures to help mitigate the adverse effects of climate change by preserving coastal spaces, ecosystems, and biodiversity. It promotes the circular economy by improving water and waste management in the country.
Decarbonization of the energy sector is also a key issue. These initiatives will receive the investment of almost $8 billion (€7.4 billion) under the REPowerEU chapter of Spain’s recovery plan and another $24 billion (€22.3 billion) under the financial instrument ICO Green Line (through Spain’s state lending institution), in clean technologies and infrastructure (including storage and electricity grids) and accelerating the development and use of renewables, including renewable hydrogen.
The plan includes a law on climate change and energy transition establishing the renewable targets for 2030 and the objective of climate neutrality by 2050, including a 100% renewable electricity system. The plan also includes a Renewable Hydrogen Roadmap, new strategies for building rehabilitation, decarbonization and energy storage, and new procurement auctions for renewable electricity. The modified plan, including the REPowerEU chapter, has further strengthened the focus on the plan on the green transition, devoting $73 billion (€67.9 billion) of the available funds to measures that support climate objectives (up from $30 billion (€27.9 billion) in the original plan).
The Ministry of Ecological Transition (MITECO) is responsible at the national level for energy and environmental legislation. Its aim is to propose and execute the government’s policy on energy and the environment as Spain transitions to a more ecological and productive social model. MITECO plays a supporting role in forestry environment and conservation, agricultural irrigation, marine reserves protection, among others, which are under the purview of Ministry of Agriculture, Fishing, and Food. The autonomous communities of Spain, or regional governments, develop basic legislation in their territorial scope and approve regional environmental plans. At the local level, the main environmental powers of the municipalities relate to municipal environmental permits, urban waste, water treatment, air pollution, and noise limits. Many Spanish cities and towns are successfully pioneering smart city projects with actions covering a wide range of population sizes, climatic conditions, geographic locations, city structures, and economic activities. Apart from these three levels, there are other national and regional bodies and agencies that take part in the enforcement of environmental law within specific sectors, such as hydrographic confederations, the Spanish Climate Change Office (OECC), and the police in charge of the protection of the environment (Seprona), among others.
Leading Sub-Sectors
The strong commitments to protect the environment and stop climate change has increased demand for soil and water mitigation and remediation technology and services which address waste creation, water purification and management, as well as ground and air pollution. Digitalization in all these subsectors is a priority.
Water is a key sub-sector in Spain due to persistent drought conditions. It is necessary to invest in measures aimed at water supply, purifying water, and modernizing irrigation. Spain will allocate over $1.2 billion (€1.1 billion) of NextGenerationEU funds to water resources. Spain 2050, the newly unveiled national government strategy to meet the challenge of climate change, calls for profound changes in water use and management to cope with water shortages projected to affect more than half of Spain’s population by 2050. The strategy recommends cutting water consumption by 15% by 2050, achieving parity of cost for reused wastewater and desalination compared to water from reservoirs, and taxing water use that carries with it high environmental costs. The current concessional regime for agricultural water could be used to achieve a major overhaul of the sector (accounting for 80% of Spain’s water use) by transforming the type of crops grown and the systems of production.
The digitalization of the water administration is the other essential area to which the Ministry wants to dedicate $298 million (€277.1 million). Digital transformation in this sector will allow significant water savings. Tracking and controlling the use of water, incorporating automation into the hydrological information systems that automate water flow and improving monitoring, and control procedures of the Hydraulic Public Domain can help the country begin to incorporate new support tools such as drones or the use of big data.
Waste is another leading sub-sector for environmental technology. The production of recycled waste in the almost 400 recycling plants in Spain increased by 2.3% from 2021 to 2022. Metals, paper, and cardboard accounted for 80% of the volume of waste generated. That is, 20.3 million tons. In 2022, Spain awarded projects with funds from the NextGenerationEU totaling almost $26 billion (€24.2 billion)
Opportunities
There is an increasing need to invest in hydraulic infrastructure to address sustainability, climate change, and water quality challenges. Digitalization, sanitation, and purification will allow an improvement and modernization of the water management and treatment sector to address current difficulties, such as drought and waste in some sectors such as agriculture. A specific area that needs digitalization is the water treatment installations that allow the reuse of purified water suitable for irrigation. Better management of such installations will result in water savings and a reduction in discharges into the sea.
The use of automation elements and the digitization of gates and irrigation systems should lead to an improvement in productivity and the use of resources, as well as the modernization of reservoirs so that they allow the storage and lamination of water during off-peak irrigation periods. It is important to highlight the potential innovations to treatment plants and the products and by-products that can be obtained from them to take advantage of residual water and produce electricity, gas, biofuels, and fertilizers. Finally, it is possible to use thermography to assess water stress and manage irrigation efficiency, thereby controlling the loss of this precious resource.
The increase of recyclable waste separation should contribute to boosting the output and income of recycling companies in the coming years. Growth for the waste recycling sector registered 2.1% in 2022. Since 2020, European legislation requires that half of municipal waste be reused or recycled. This benchmark will increase by 5% every five years through 2035, which may fuel further growth in the sector. There are good opportunities for U.S. businesses with solutions that contribute to reduce the waste generated, recover any recoverable waste, and eliminate, in an environmentally friendly manner, the non-usable waste. Therefore, replacing technology and services of a linear economy based on producing, consuming, and disposing waste for a circular economy in which materials containing waste are reincorporated into the production process to generate new products or raw materials has great prospects in the Spanish market.
Resources
Ministry of Ecological Transition (MITECO)
Spanish Climate Change Office (OECC)
U.S. Commercial Service Spain
Environmental Sector Specialist: Carmen Adrada
Tel: (+34) 913 081 542
e-mail: Carmen.Adrada@trade.gov