Cepsathe second largest Spanish oil company, announced this Friday that it will delay investments worth 3 billion in green hydrogen that was planned in the south of the country if a temporary tax on the extraordinary profits of energy companies becomes permanent.
The company, controlled by Abu Dhabi sovereign wealth fund Mubadala and US investment fund Carlyle, said in a statement that it would instead “prioritise its international expansion with projects that had initially been planned for the second phase of its investment strategy.” transition”. According to the diary ExpansionCepsa already has projects identified in Algeria, Morocco, Brazil and the United States.
The group has as its flagship project the Andalusian Green Hydrogen Valley, which is planned to be built into one of the largest production centers in Europe to decarbonize industry, aviation and heavy maritime and land transport, and turn Spain into a sustainable energy exporting country.
Sources from the country’s oil company indicated that “it is assessing the impact that an increase in its taxation may have if a new permanent tax is approved,” and stressed that, if this materializes, “it would cause a very relevant effect on the profitability of hydrogen projects, so it would have to slow down the planned investments in Spain and give priority to green hydrogen projects in other countries that, initially, had planned an international expansion for a second phase of the strategic plan Positive Motion“. Despite this decision, the same sources specified that the ongoing transformation of Cepsa “is irreversible to ensure that more than half of its profit comes from sustainable activities in 2030.”
Green hydrogen, produced from renewable electricity, is seen as key to decarbonising the European economy. However, given their cost, green hydrogen projects are generally not competitive without subsidies.
Last week, the Government announced that it included among the commitments submitted to the European Commission in its fiscal plan the “permanent” maintenance of extraordinary taxes on energy and banking, initially approved for two years (2023 and 2024) due to the impact of the crisis due to the war in Ukraine. In these two years, the tax on energy companies has raised more than 2.4 billion.
Oil companies have been some of the companies that have most criticized the tax, which has also drawn criticism from energy companies such as Endesa, and are threatening to paralyze their investments. Cepsa’s announcement follows carried out at the beginning of the week by Repsolwhich also assured that it places in stand by their green hydrogen projects.
This Thursday, the Spanish Association of Petroleum Products Operators (AOP) (the association of oil companies that includes Cepsa, Repsol, Galp, Disa and BP, among others) also showed its rejection of a permanent tax on the sector. energy, which, he said, could “discourage investments in the country”, jeopardizing the 16 billion that the sector plans to address for its decarbonization until 2030.
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