European Investment Bank provides Repsol major loan for renewable diesel, SAF project
The European Investment Bank is providing a loan to Repsol in the amount of 120 million euros (USD$127 million) to support the construction and operation of the first advanced biofuels production plant at the company’s facilities in Cartagena, Spain.
The plant will produce approximately 80 million gallons to 85 million gallons per year of renewable diesel and sustainable aviation fuel (SAF) from different types of waste primarily from the agri-food industry, such as used cooking oils, as part of the transition process towards a more circular economy.
Construction work began in March and is scheduled for completion in the second half of 2023.
While second-generation biofuels are derived from a broad range of biogenic residues including used cooking oils, certain animal fats and vegetable oils that cannot be used as food or are derived from crops that do not compete with food, advanced biofuels are produced specifically from a subset of biogenic feedstocks listed in Part A of Annex IX of the REDII directive.
These biofuels are a sustainable solution for all segments of mobility, especially for those that have no other alternative to decarbonize their activity, such as maritime, long-distance or aviation transport. They can reduce net CO2 emissions by between 70 percent and 90 percent compared with the traditional fuels they replace.
The EIB financing will also support research programs for advanced biofuels technologies conducted at Repsol’s technology lab in Madrid.
The production plant will be located within the premises of Repsol’s industrial complex in Cartagena, in the region of Murcia—an EU cohesion region. The plant will process 300,000 tons per year (tpa) of lipidic residues for the production of up to 250,000 tpa of second-generation or advanced biofuels for the transport sector.
“The EIB is committed to financing green transformation, the use of alternative energy sources and innovative research programs across Europe,” said Ricardo Mourinho Félix, EIB vice president. “The EIB loan contributes to Repsol’s strategy to transform its business model and to its decarbonization strategy. We are pleased to be collaborating with companies such as Repsol, which are taking steps towards decarbonizing business activity and strengthening resilience to climate change.”
Commenting on the agreement, Antonio Lorenzo, Repsol’s chief financial officer, said, “We are proud to be the first company in the sector to obtain this type of financing, which is a result of our commitment to execute groundbreaking projects in support of a rapid, effective and just energy transition.”
This innovative plant will contribute to the development of low-carbon fuels to be used in hard-to-decarbonize and hard-to-electrify sectors. The project is fully aligned with the European Green Deal and the Fit for 55 package and will support energy security by lowering EU dependency on fossil fuel imports. Repsol’s decarbonization path earmarked 6.5 billion euros (USD$6.9 billion) to low-carbon initiatives in 2021-’25 (35 percent of total investment). EIB funding to support its green transformation is in line with the EIB contribution to the REPowerEU recently approved by the EIB’s board of directors.
Repsol was the first company in its industry to commit to zero net emissions by 2050 and is implementing an ambitious decarbonization strategy in alignment with the Paris Agreement and the United Nations Sustainable Development Goals.
Repsol’s roadmap includes emission-reduction targets with a reduction in the carbon-intensity indicator of 15 percent by 2025, 28 percent by 2030 and 55 percent by 2040.
The bank has a longstanding relationship with Repsol and has financed more than 10 projects, since the first agreement in 1988, soon after Spain’s accession to the European Economic Community.