There is a common misunderstanding in the debate on industrial decarbonization that is worth clearing up from the outset: electrification is necessary, but not always sufficient. For steel and cement (the so-called hard-to-decarbonize sectors), the transition is not about replacing gas with electricity and continuing to produce the same. In cement, more than half of emissions come from clinker calcination, a chemical reaction that releases CO₂ no matter what energy source is used. In integrated steelmaking, coal is not merely a fuel: it is the reducing agent that turns ore into metal. Decarbonizing these sectors requires redesigning entire processes, deploying green hydrogen at scale and, in cement, capturing the CO₂ that no renewable source can avoid. All of this requires infrastructures that Spain still lacks.
The cost of delaying that work is becoming impossible to ignore. The president of the European Commission, Ursula von der Leyen, quantified it this week with a phrase that deserves to be read slowly: the EU has spent €22 billion on fossil fuel imports in barely 44 days of conflict in the Middle East, “without a single molecule of additional energy.” Only the disruption of the Strait of Hormuz — through which around 20% of the world’s oil and gas transits — has pushed Brent above $100 a barrel and has raised the price of gas by about 70% in a matter of weeks. Cement and steel, sectors that depend on those fuels to generate process heat at temperatures that today no renewable source can reach, are absorbing that blow directly in their production costs. It isn’t the first time: Ukraine in 2022 already happened. Each fossil-fuel crisis repeats the same diagnosis, which from ECODES we have been signaling: European industrial competitiveness is not built by reducing climate ambition, but by reducing structural energy vulnerability. Decarbonization, therefore, is an economic survival strategy for our industry.
“Decarbonizing is not free or immediate either, and the main obstacle is more financial than technological”
The problem is that decarbonizing is not free or immediate either, and the main obstacle is more financial than technological. Several organizations and entities have argued that the Clean Industrial Deal is a real opportunity for European industry to be competitive and sustainable, but only if it is accompanied by the right instruments. The electrification of industrial processes, such as electric arc furnaces or electrolyzers to produce hydrogen, requires investments whose viability depends on guaranteeing the electricity price for years to come. Long-term contracts with renewable producers (PPAs) are the natural instrument to provide that certainty. In Spain these are being signed for terms of up to fifteen years, although the usual practice remains shorter: renewable producers are reluctant to lock in a price for two decades without public backing that covers the uncertainty of their own future costs. Without that backing, the term shortens and the certainty the industry needs is reduced accordingly.
The other instrument missing, and which several European countries are already deploying, are contracts for difference for industry (the CCfD). Their logic is simple: the government sets a reference price for the low-carbon product, steel or cement, and if the market does not reach that level, the State covers the difference; if it exceeds it, the company returns the excess. They remove price risk for the investor without becoming a permanent subsidy. Germany and the United Kingdom are already using them for green steel projects. In Spain they appear mentioned in strategic documents, but none are operational. The combination of a long electricity PPA and a CCfD for the final product could cover the two flanks of the financial risk that today freezes investment. The question is whether the package of measures the European Commission is preparing, due to be published on May 19, will include frameworks to facilitate both instruments at scale or if it will continue to leave that decision to each Member State.
“Gas-dependent plants have no control over what they pay for it, nor over when they can obtain it. Those that run on self-generated or contracted renewable electricity, yes”
Added to that is access to the electricity grid. Industrial electrification requires firm power at nodes where queues currently exceed five years in many areas. The recent Spanish anti-crisis royal decree-law (RDL 7/2026) has taken useful steps, such as a levy that penalizes reserving capacity without using it and a preferential pathway for strategic projects, but its real reach also depends on what happens at the European level. The Renewable Energy Directive, already transposed, establishes renewable acceleration zones with streamlined procedures. The Industrial Decarbonisation Accelerator Act, still under negotiation, plans to create equivalent industrial acceleration zones for sectors such as steel and cement. Moving both mechanisms forward in a disjointed fashion would be an avoidable mistake: even if the IDAA is not yet approved, Spain can begin work now so that, when it is, industrial and renewable zones can be designated together. Zones without nearby renewables do not simplify decarbonization; they deprive it of substance and delay the transition even further.
Von der Leyen added that “even if hostilities cease immediately, energy disruptions in the Gulf will persist for some time.” It is a warning that should also be read as an opportunity. Gas-dependent plants have no control over what they pay for it, nor over when they can obtain it. Those that run on self-generated or contracted renewable electricity, yes. Decarbonizing is not merely fulfilling a climate obligation: it is gaining autonomy from markets we do not control, stabilizing long-term production costs, and building a real competitive edge in a European market that, through CBAM, will progressively penalize those who have not done so. The projects that already know how to do it are out there. What is needed now is price certainty, territorial coordination, and financing that allows them to scale.
