Cepsa and Bio-Oils, a Spain-based biofuels subsidiary of Apical, have partnered to boost the production of second-generation biofuels by procuring most of its feedstock from organic waste, including agricultural residue and used cooking oils.

The €1 billion (~$1.1 billion) worth facility will consist of two pre-treatment units and produce up to 500,000 tons of sustainable aviation fuel and renewable diesel yearly for land, sea, and air transportation, with adaptable production capabilities.

It will be situated at Cepsa’s La Rábida Energy Park in Palos de la Frontera, Huelva, and is expected to commence operations in the first half of 2026.

The agreement between the companies will ensure that the plant has a steady feedstock supply. The production of 2G biofuels from waste products is a prime example of the circular economy as it repurposes waste materials that would have otherwise been disposed of in landfills.

Cepsa will lend the partnership its technical know-how and experience in fuel production and large-scale industrial project development.

Apical and Bio-Oils will guarantee the supply of raw materials and offer their proficiency in biofuel production.

The sustainable fuels manufactured in this new plant are expected to help reduce CO2 emissions by 1.5 million tons annually, equivalent to 30% of the emissions in Huelva province.

The use of biofuels can result in up to a 90% reduction in CO2 emissions compared to traditional fuels, making them critical to a just energy transition and the decarbonization of transportation, particularly in sectors where electrification is difficult, like heavy road, maritime, and air transportation.

Cepsa’s chemical business would also benefit from this initiative since it will have access to organic waste feedstocks to produce its sustainable product portfolio.

The European Parliament and the Council recently agreed to raise the EU’s renewable target to 42.5% by 2030. The transport sector has been given a mandate of a 14.5% cut in greenhouse gas intensity or a 29% share of renewable energy in final energy consumption, including a combined sub-target of 5.5% for advanced biofuels.

The European Parliament has also approved a law that effectively bans the sales of new petrol and diesel cars in Europe from 2035 to accelerate measures to cut 100% of carbon emissions produced by new passenger vehicles and light commercial vehicles or vans.