Spanish energy firm Cepsa could "slow" its renewable hydrogen investments in Spain if the country goes through with a plan to make its windfall tax on large energy companies permanent, the company told Argus.
Cepsa's warning comes after a similar threat from compatriot Repsol and has raised the stakes in the Spanish standoff that could disrupt one of Europe's most important countries for renewable hydrogen supply.
Cepsa, which has plans for 2GW of electrolyser capacity in southern Spain, "is evaluating the fiscal impact of possible approval of a new permanent tax" in the country, it said.
If the windfall tax does become permanent, Cepsa said it will "prioritise its international expansion with projects that had initially been planned for the second phase of its transition strategy". Its renewable hydrogen international portfolio includes projects in the US, Brazil, Morocco and Algeria, the company said.
Spain set a windfall tax at 1.2pc on the 2022 and 2023 revenues of energy companies with sales of over €1bn/yr, but it has so far been applied on an extraordinary and temporary basis.
The tax row concerns large energy companies and firms with lower revenues are not expected to be hit, which means not all Spanish hydrogen projects are at risk. But the companies affected account for a significant amount of capacity.
Repsol's plans would amount to 350MW of combined electrolyser capacity, mainly to decarbonise activities at three of its industrial complexes across Spain.
Output from Cepsa's 2GW Andalusian Hydrogen Valley would decarbonise its own refineries as well as serve offtakers such as fertilizer company Fertiberia and Danish shipping firm Moller-Maersk's affiliate C2X, with the latter planning a 300,000 t/yr e-methanol production facility close to Cepsa's plant.
In September last year, Cepsa said it had secured offtake for 60pc of the renewable hydrogen and derivatives at the project.
In May, Cepsa chose German-Italian manufacturer ThyssenKrupp Nucera and Germany's Siemens to build the first 400MW of electrolysis capacity at the valley, which is expected to come online in 2026.
Spain recently increased its target for installed electrolyser capacity to 12GW by 2030, the highest among European countries.
