The industry does not have the means to make the transition: it continues to use gas as it does not yet see a solution in hydrogen, biomass or biogas.

The Spanish industry is beginning to recover from the price crisis that in 2022 sent natural gas prices through the roof, the main source of energy they use.. The refining, chemical, ceramic, food, paper and metallurgy sectors all have in common the high consumption of gas to fuel industrial processes that require the generation of heat that electricity cannot provide.. Together they account for 50% of the national consumption of natural gas and, after a drop due to the price crisis, they are recovering the consumption of one of the fossil fuels destined to be used less and less in accordance with the ecological transition outlined by the Government and the that the last Climate Summit, in Dubai, also marked the way out. However, at the moment they do not find an alternative and see the replacement with biomass, green hydrogen or biomethane as something “long term.”

This tagline – “in the long term” – is repeated in the plans that these industrial sectors have to replace natural gas with renewable energies and which appear in a report published this Wednesday by the Spanish Gas Association (Sedigas) to warn that , despite the Government's plans for the ecological transition, large industry, large consumers of gas, will not be able to replace it with other energies at the moment, despite the fact that all these sectors have in mind what renewable energy they can use – or go already using in some cases – to replace it in the future. Meanwhile, the reality is that the industrial sector is beginning to recover from the price crisis and its usual consumption of natural gas or hopes to do so in the short term.. “Natural gas is and will continue to be essential to ensure the competitiveness and sustainability of the industrial sector, providing it with energy security,” he concludes.

Although it was the least affected by the energy crisis, the refining sector reduced its gas consumption from 39.1 terawatts/h (TWh) in 2021 to 23 in 2022 and began to recover it last year, which closed with 32TWh. “The demand for natural gas is expected to gradually recover in the short term due to the stabilization of gas prices”. The chemical sector also registered a “slight increase” in gas consumption in 2023, which was affected by prices in 2022, when factories stopped to minimize the impact of the crisis but now “expects a gradual recovery” for what it counts. with gas and also with the Government putting in place “necessary support measures to defray energy costs and make the energy transition viable”. Plants in the metallurgical sector also had to stop due to high gas prices, such as Alcoa.

The diverse food sector – not so affected during the price crisis and which grew in the case of beverage production – also already sees a “slight increase in gas demand, which in 2023 has already begun to rebound and “predicts “a recovery in the short and medium term, as long as the level of remuneration of the cogenerations manages to cover the costs associated with these facilities”. The paper sector also hopes to recover “in the medium term” the demand for gas, which still in 2023 had not managed to recover from the fall of the previous year.. The ceramics company insists on its difficulties in abandoning gas due to its “high thermal needs”, which it cannot supply at the moment with renewable energy.. For this reason, he considers that “it is part of a particularly complicated situation” that it hopes to be able to overcome by relying on natural gas in the medium term.

Strong dependence on gas

The study has been prepared with the analyzes and expectations of the six industrial sectors that need the most natural gas to function and confirms that, at least in the short and medium term, they continue to rely on this fossil energy to function, as well as the support that They demand the Government not only to be able to replace gas with renewable energies, but to be able to continue working with it. “There continues to be a strong dependence on natural gas in industrial processes since in many cases there are no economically or technically viable energy alternatives that need time and momentum to be developed,” says the study.. “In the future, natural gas will continue to have a constant presence in the industry and there will be a trend towards a model where all energy sources are represented and each sector can opt for the most efficient one for each final application,” he adds.

Although they are committed to “evolving”, in the words of the representative of the Spanish Association of Petroleum Products Operators (AOP) Andreu Puñet, the one from the ceramics sector (ASCER), Alberto Echavarría, made it clear this Wednesday that “if gas does not is competitive, the industry is not competitive.”

The industry has decarbonization as one of its main “challenges”. Representatives of several of these sectors agreed this Wednesday in comparing it with “the Camino de Santiago”, for being a “long and slow” process for which at the moment the sectors that consume the most natural gas to function do not see realistic alternatives.. It is added that, in these cases, electrification is not an option. Replacing gas with electricity – generated from renewable sources – in its production processes could be a limited option for the ceramics industry, to which the report attributes an electrification potential of between 5 and 20%, and practically zero -from 0 to 5%- in the refining, chemical, paper and metallurgical sectors.

Looking to the future, these industrial sectors are already pointing out what could be the source of renewable energy with which to replace gas, in a process that in some cases has already begun but which they warn that there is still time to be certain of than vectors such as green hydrogen, “the guest star”, as they describe it in the refining sector, which is “the main vector for its decarbonization” which it counts on in the future to replace gas, just like the metallurgical sector.

Also in the long term, the chemical sector sets its eyes on renewable gases – hydrogen but also biomethane – and CO2 capture, that is, technologies capable of recovering emissions from the industry, still immature but in which the European Commission also It is supported so that the EU can reduce them by 90% by 2040. The paper sector contemplates decarbonization through biomass, biogas-biomethane and hydrogen, although in the long term also and always, he points out, that they are “competitive ” in prices. The ceramic sector will also study biomethane “when its availability and price make its use viable”, which believes that green hydrogen will play an “important role in the long term”, along with the capture of CO2. The food and beverage sector is committed to biogas, hydrogen and biomass, which it is already beginning to incorporate through waste treatment. “Hydrogen, when we have availability, supply capacity and prices,” says Manuel Domínguez, general director of the paper sector association (ASPAPEL).

Loss of competitiveness

While gases and other renewable energies mature, the industrial sector remains concerned about the loss of competitiveness during the price crisis, which they regret not only occurred with respect to industries outside the EU, from countries producing fossil fuels, but also compared to other European countries. The reason is that direct aid to the industry in Spain was “significantly lower and less efficient.”

While France allocated 3,000 million to its industry in 2022, Germany, 83,000 million in different instruments or Italy more than 2,000 million in tax credits and reduction of charges, in March and December of that year in Spain an aid of 400,000 euros was approved for industrial group and another 450 million. It is not just the amount, the industrial sector points out that other countries designed this support better, which was paid quarterly or directly in the gas bill, while the Spanish industry is now beginning to receive aid that was approved then.

In this scenario, the large gas-consuming industry demands support measures such as facilitating the administrative process of aid to address new technologies, regulating the use of renewable gases, promoting the capture of CO2 and ensuring remuneration for cogeneration through direct aid, ICO credits or diversification incentives.