Cepsa and PreZero enter into alternative energy partnership

Cepsa and PreZero Spain have signed a partnership agreement under which the latter will supply biomethane from some of its projects to Cepsa, and the two companies will jointly develop biomethane plants. In addition, the parties will work on the recovery of waste to produce second-generation biofuels and closed-loop chemical products, and on the decarbonization of the land fleet operated by PreZero in Spain and Portugal.

The two companies are reportedly already making progress on the development of a biomethane plant in the Spanish province of Huelva. According to Cepsa, the new plant, with an annual capacity of up to 100 GWh, which would cover the heating needs of around 20,000 homes, will be one of the largest renewable energy installations in Spain and will be used to produce green hydrogen and renewable fuels. The plant will be built at Cepsa’s facilities in Palos de la Frontera, where the company has a power plant. Cepsa also plans to develop a 1 GW green hydrogen plant there, as part of the Andalusian Green Hydrogen Valley.

In terms of supply, PreZero will supply Cepsa with biomethane, on a preferential basis, in projects that the companies consider strategic for both parties. In addition, the agreement will allow Cepsa to obtain biogenic CO2 from PreZero Spain’s biomethane plants to produce synthetic fuels.

PreZero will also recover other organic waste or used cooking oils, which Cepsa will use to produce second-generation biofuels, which will facilitate the decarbonization of sectors that are difficult to electrify, such as heavy road, marine or air transport. In addition, PreZero will process plastic waste, including single-use plastics, to provide Cepsa with raw material, which the company can then use to develop closed-loop chemical products. Cepsa said the two companies will explore the joint development of pyrolysis plants to process this type of non-recyclable plastic waste.

The partnership also includes exploring solutions to decarbonise PreZero Spain’s private land fleet of over 750 vehicles.

Carlos Barras, Vice President of Commercial and Clean Energy at Cepsa commented: “This alliance with PreZero will allow us to expand access to circular raw materials to produce alternative energy sources that facilitate the energy transition, such as green hydrogen and second-generation biofuels. Together, we will develop a sustainable alternative to processing municipal and industrial waste, recovering this waste to produce renewable energy, thereby promoting a circular and decarbonized economy.”

Gonzalo Canete, The General Manager of PreZero in Spain and Portugal stated: “This agreement is the result of Spain’s huge potential to develop biomethane as a renewable natural gas, as well as the need to align with other EU countries in achieving circular economy and decarbonisation goals. To achieve this, together with public-private cooperation, we need to strengthen cooperation between private companies, as demonstrated by this promising partnership we are announcing today.”

It is worth noting that, as part of its “Positive Motion” strategy for 2030, Cepsa is developing an ecosystem to accelerate the decarbonization of its business and that of its customers through the production of green molecules such as renewable hydrogen and its derivatives, as well as 2G biofuels, including biomethane, PBS or 100% renewable diesel.

Meanwhile, PreZero Spain aims to achieve carbon neutrality by 2050, reducing greenhouse gas (GHG) emissions across all of its operations. To this end, the company has defined a sustainability strategy based on the use of recycled raw materials, the production of green energy, the optimization of waste collection routes and loads, and the implementation of energy efficiency measures, among other actions.