Cepsa threatens to “slow down planned investments in Spain” if the special tax is maintained

The oil company Cepsa threatens to “slow down planned investments in Spain and give priority to green hydrogen projects in other countries” if the extraordinary tax on energy companies becomes a permanent tax, as is included in the Government agreement between PSOE and Add, as Expansión has advanced and elDiario.es has confirmed.

Sources from the company, the second largest oil company in the country, indicated that “it is assessing the impact that an increase in its taxation may have if a new permanent tax is approved.” The same sources point out that if the permanence of the tax materializes, “it would cause a very relevant effect on the profitability of hydrogen projects, which is why it would have to slow down the planned investments in Spain and give priority to green hydrogen projects in other countries. which, initially, had planned an international expansion for a second phase of the ‘Positive Motion’ strategic plan.”

The group controlled by Mubadala, the Abu Dhabi sovereign wealth fund, and the American investment fund Carlyle has as its emblematic project the Andalusian Green Hydrogen Valley, which is planned to be erected in one of the largest green hydrogen production centers in Europe. This project foresees an investment of 3,000 million euros.

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.” Cepsa has already identified projects in Algeria, Morocco, Brazil and the United States that will be accelerated if resources are finally released in Spain.

Last week, the Government announced that it included among the commitments sent to Brussels 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, the Government has received more than 2.4 billion euros from the energy sector in these two years.

Rejection from the sector

This Thursday, the Spanish Association of Petroleum Products Operators (AOP) – the association of large oil companies, of which Cepsa, Repsol, Galp, Disa and BP, among others, are part – already showed its rejection of a permanent tax on energy sector. The oil employers’ association warned that this tax or the lack of clarity about the fiscal horizon could “discourage investments in the country,” putting at risk the 16 billion euros that the sector plans to address for its decarbonization until 2030.

Furthermore, Cepsa thus follows in the footsteps of Repsol in its frontal opposition to the possibility that this tribute could be perpetuated over time. The company led by Josu Jon Imaz announced this week its decision to invest 15 million euros in a new renewable hydrogen project at its Sines Industrial Complex, in Portugal.

Already a year ago, it had made clear its threat to ‘fallow’ investments in some of its industrial projects in different areas of Spanish territory until it had “stable and sufficiently attractive conditions to guarantee profitability.”