By Sergio Goncalves
LISBON (Reuters) -Portugal’s chemical, petrochemical and refining companies need to step up spending on decarbonisation to meet net zero climate goals by 2050, a process the sector estimates will cost 30 billion euros ($34.99 billion) in investment, industry group APQuimica said.
The sector currently invests an average of around 1 billion euros per year in growth, manufacturing processes, and energy efficiency, but only a portion is targeted at decarbonisation.
The 30 billion euro estimate, the first time the industry has put a number on decarbonisation costs, comes from a study carried out in collaboration with consultancy EY. It represents a structured plan to achieve carbon neutrality, as required by U.N. and EU treaties, APQuimica President Luis Gomes said on Wednesday.
The industry will need significant capital investment initially, with funding mainly channelled into electrification, renewable gases, such as green hydrogen, biomass, as well as carbon capture, usage and storage.
“In Europe, carbon neutrality is a legal imperative … I don’t know of a single company in the AP Química group that has doubts about this,” Gomes told Reuters. “The industry is capital intensive, it already invests a lot every year and has the capacity to invest further,” he said.
Portugal’s manufacturing industry generates 26% of the country’s total greenhouse gas emissions, with its chemical, petrochemical and refinery companies responsible for more than a third of all the industrial emissions.
APQuimica has more than 60 members, including Spain’s Repsol Polimeros and other major companies such as Bondalti and oil company Galp.
The sector, which exports to 180 countries, faces disadvantages compared with European rivals, such as long delays in official authorisation processes required to approve investment that need addressing, the group said.
While Portugal enjoys electricity and natural gas prices below the EU average, the industry group said this competitive edge was eroded by more generous subsidies granted to energy-intensive industries elsewhere in Europe.
($1 = 0.8575 euros)
(Reporting by Sergio Goncalves; editing by Andrei Khalip and Jane Merriman)
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