A successful transition towards decarbonisation depends on incentivising demand while supply leads the way

According to the study “Observatory of Trends in the Context of the Energy Transition” carried out by Exolum in collaboration with Deloitte

• The study stresses that the energy transition is a prime opportunity for Spain, as our country has sufficient renewable natural resources and a private sector that is prepared to consolidate its leadership in clean energy, although this will require greater investment in R&D and a shift in the supply and demand of new energy carriers
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• The Observatory states that low-carbon energy carriers, such as biofuels and biogases, must play a prominent role in the intermediate stage of the decarbonisation process in certain sectors like transport, mobility and residential HVAC systems
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Madrid, 27 March 2025. Spain has the opportunity to lead the energy transition at the European level with innovative solutions to decarbonise industry, transport and mobility; however, greater investment in R&D is required and supply and demand in the new energy sectors must be adapted. This is according to the study “Observatory of Trends in the Context of the Energy Transition”, a study carried out by Exolum in collaboration with Deloitte, which examines the latest developments in the decarbonisation of the economy, presented this morning in Madrid.

Similarly, the report also highlights that decarbonisation in Spain is making solid progress, driven by a robust supply, but that in order to bring about real transformation, it is necessary to incentivise demand to avoid inefficiencies and ensure the economic sustainability of investments.

At the presentation, the director general of planning and energy coordination at the Spanish Ministry for the Ecological Transition and the Demographic Challenge, Víctor Marcos Morell, spoke before an audience featuring representatives of both the Spanish public and European energy sector and business leaders, emphasising that: “Spain can be a pioneer in the energy transition, as a member of the European Union. We have the right geographical and climatic conditions and one of the fastest growing economies. This is thanks to the investments being made, especially by the private sector, in renewable energy, which has led to an increase in GDP while reducing energy consumption.”

New energy carriers

One of the biggest takeaways from the study is the mportance of biofuels, synthetic fuels and renewable gases, as they have the potential to decarbonise sectors that are difficult to electrify, such as heavy road transport, air and maritime transport and certain industrial processes. The transition towards a more sustainable mobility model requires the progressive introduction of these types of alternative fuels, whose use is currently way below the target of 20% by 2030 set by Spain’s National Integrated Energy and Climate Plan (PNIEC).

“Biofuels and synthetic fuels play a crucial role in the transition to a low-carbon economy. Their gradual implementation is essential in order to decarbonise heavy transport and other industrial sectors where electrification is not feasible, bringing them in line with climate targets,” indicated Jorge Lanza, CEO of Exolum.

In Spain, green hydrogen has been unveiled as the centrepiece of the national energy strategy, thus leveraging the country’s abundant renewable energy potential. This could place Spain at the forefront of green hydrogen production and facilitate the creation of a hydrogen economy that connects southern Europe with the rest of the continent. In fact, according to the European Commission, hydrogen has the ability to be an essential building block for the decarbonisation of energy intensive industries like steel and chemicals.

In this regard, the study points to the significant challenges H2 faces in its implementation. Cost reduction is vital—driven by technological innovations, economies of scale, infrastructure investments and public-private partnerships—to help close the price gap and make green hydrogen competitive. Moreover, fostering demand is crucial to ensuring its economic viability.

Diversifying solutions to decarbonise mobility

The report addresses the significant challenges that Spain still faces in reducing emissions from logistics and transport, whether at the public, business or consumer level. In the case of electric vehicles, while the automotive industry is committed to diversifying the offer and releasing new models, consumers have yet to be fully convinced to opt for electric cars in their domestic mobility. The recharging network, which fails to cover the entire country and whose deployment is limited by administrative barriers, is also one of the reasons behind the failure to meet the objectives of the PNIEC, which sets the target of 5 million electric vehicles by 2030.

Finally, the study also draws our attention to the rates at which new energy carriers are developing and the different speeds at which economic sectors are decarbonising. As such, while Spain exceeded both 83 GW of installed renewable capacity and 7 GW of solar self consumption last year, other key technologies for decarbonisation, such as carbon capture, require a greater boost to bring their development in line with that of other European countries.

The Observatory takes into account four areas of action: mobility and transport; industry; agriculture and the rural environment; and building renovation. It also looks at carriers such as biofuels, e-fuels and renewable gases; electrification; industrial decarbonisation and carbon; and home energy efficiency and HVAC systems.

The report is based on data from various sources, including the Association of Renewable Energy Companies (APPA Renovables), the Business Association for the Development and Promotion of Electric Mobility (AEDIVE) and the National Statistics Institute (INE), among others. The methodology includes retrospective and prospective market analyses, and a study of regulatory and sectoral developments. For more information, the full study can be found at https://exolum.com/wpcontent/uploads/2025/03/I-Observatorio-Transicion-Energetica-Exolum.pdf