The European Comission has asked Spain to explain “how” and “when” it will stop giving fossil fuel subsidies in its roadmap to 2030, known as the National Integrated Energy and Climate Plan (PNIEC). The Community Executive has published this Monday a assessment of the plans of each of the 27 Member States, as well as a series of recommendations with a view to the final presentation of these plans before the June 30, 2024.
The main subsidy for fossil fuels in Spain is low taxation that applies to gasoline and dieselwith a tax burden lower than European Union averageas can be seen from the monthly reports on fuels published by the National Markets and Competition Commission (CNMC). This low tax rate is considered a subsidy for these products, which in the case of diesel It is even more evident when lower to that of gasoline.
In the PNIEC, the Ministry for the Ecological Transition defines subsidies as exemption or reduction of certain taxes to some collectives. It is the case of the refund of Hydrocarbon Tax due to the use of diesel in agriculture and livestock, as well as in professional use and the transport of goods, passengers and taxis. Also they reduced tax rates that apply to diesel used as fuel in special vehicles or agricultural vehicles and, in general, as fuel for heating, LPG and natural gas intended for uses other than fuel or in stationary engines, for professional purposes, and the kerosene intended for uses other than fuel.
To eliminate subsidies, the department that directs Teresa Ribera It proposes imprecise measures, such as not granting new authorizations for the exploration and exploitation of hydrocarbons or giving aid to renewable alternatives. But the Commission asks to “explain more details on how and when Spain plans to eliminate fossil fuel subsidies”.
Water management
Brussels also recommends that Spain “pay special attention to water management” due to “the risks of power interruptionsince floods, heat and drought affect energy production.” Without going any further, last year, the drought brought this hydraulic production to its lowest level since there are records, which makes a dent in electricity prices because its natural alternative is production with combined cycles (gas-burning plants). And asks to specify the amount of Reduction of energy consumption that will be achieved with the greatest efficiency of public buildings and explain the measures on energy poverty with “measurable and specific” objectives and “details about the financial resources” to implement these measures.
Furthermore, it demands that this country detail how it wants reduce gas demand and what policies and measures it plans to implement to achieve that goal by 2030, an evaluation of the internal situation of the forest biomass for energy purposes and “further measures to promote sustainable production of biomethane, “given the sustainable potential of biomethane in Spain, its gas consumption profile and the existing infrastructure”. This is one of the main complaints of the Spanish gas companiesintegrated into Sedigas, which estimate a production potential of up to 163 terawatt-hours (TWh), enough to decarbonize 45% of the national demand for natural gas.
He also recommends “evaluating” the oil infrastructure (refineries and oil reserves) for “the expected reduction in oil demand and the move towards low-carbon alternatives”, establish a “sub-target” to advanced biofuels and renewable fuels of non-biological origin in transport and explain what “reforms and measures” will be implemented to mobilize the private investments foreseen in the plan and which amount to a total of 250,000 million euros.
Suspense as a group
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The ultimate goal of these plans is to achieve the goal of European Union as a whole to reduce their greenhouse gas emissions at least 55% by 2030but with the current plans the reduction remains at 51%, according to the European Commission. Brussels warns that with the updates presented by the different countries, a quota of the 39.3% weight of renewables in final energycompared to the target of 42.5%, while the energy efficiency remains even further away – in a 5.8%, compared to the target of 11.7%–. In the first case, Spain is one of the six countries that foresees a renewable objective in accordance with the European approach, while in the second it places it at 7.37%.
The third vice president and minister for the Ecological Transition, Teresa Riberahas very briefly assessed this review of the national plans during the press conference of the Council of Environment Ministers, noting that these recommendations “will allow countries to have a better understanding about the weak points” of their energy policies.