Pollution costs rising for Valencian industry
Pollution carries a high price and it keeps climbing. In the Valencian Community a large industrial group faces a charge of about 250 million euros for the excess CO2 it released last year, a figure reported by the Generalitat.
Across the Valencian Community, 111 installations participate in the emissions trading regime. They pay for emissions beyond the allowances. By contrast, 71 facilities fall below a threshold and are not required to participate.
The rising bill affects key strategic sectors in the region. Some 31.8 percent of the emitted tonnage comes from the ceramic industry producing floor and wall tiles, while 22 percent comes from electricity generation operators, notably cogeneration plants. In many cases these costs aggravate the already challenging situation created by high gas and electricity prices.
Emissions trading is a cornerstone EU mechanism aimed at cutting greenhouse gas emissions toward a target of 40 percent below 1990 levels by 2030, in line with the Paris climate commitments.
Facilities must submit annual reports detailing emissions from the prior year, with verification by an independent organization. In the Valencian Community, confirmed and forecasted emissions for 2022 reached 7.8 million tonnes of CO2. This marked a decrease from 8 million tonnes in 2021, yet still exceeded more than half of the free allowances allocated for this year to plants in the region.
It should be noted that the state permits facilities to export a portion of free allowances to compete with operators outside the European Union while honoring Kyoto commitments. However, the share of free allowances is reduced each year, and all emissions beyond that threshold must be paid. The payment goes to the Spanish state, and the price is not fixed but driven by a financial market. For context, the price per tonne moved from 12.62 euros in March 2018 to 21.44 euros in 2019, then to 72.89 euros in 2021, and reached 87.48 euros in March 2023, illustrating dramatic growth.
new mechanism
Countries such as Spain, particularly its industrial regions, have worked to curb the unprecedented rise in emissions rights costs. This speculative activity prompted the European Commission to tighten rules in the new ETS framework, accelerating the reduction of free rights. With support from the European Parliament and the EU Council, legislation is being considered to curb speculative movements. Insiders say the long-term impact on new fund flows or investment strategies will become clearer as the rules take hold.
Brussels aims to spur investment in technologies that prevent emissions. In industries like Castelló’s, there is not yet a fully ready technology to move toward cleaner processes at scale. Still, the trajectory of emission rights will continue to evolve. The price has fluctuated, sometimes staying around the mid to high range, and at other times pushing past significant thresholds.
Overall, the process appears irreversible. The European Commission has set ambitious targets and will keep pushing ahead with a deterrent that shapes corporate investments. Last autumn, the EU climate commissioner pledged a long-term goal to cut net greenhouse gas emissions by ninety percent by 2040. Financial analysts quickly anticipated higher EU carbon prices, and predictions have since reflected that outlook as markets moved toward higher levels. This broader dynamic underscores how emissions policy is increasingly intertwined with investment strategy and industrial competitiveness. (EU policy notes, contemporary to 2024)