Overview

Description

The Spanish Carbon Fund for a Sustainable Economy (FES-CO2) was created in 2011 and has supported domestic emission removal projects in sectors that are not covered by the EU ETS through the purchase of carbon credits by the Spanish Government. The FES-CO2 issues call-outs for emission reduction project proposals, with successful projects granted a contract that determine the volume, schedule and price for Reducciones de emisiones verificadas (REVs) or Verified Emission Reductions. Projects can then commence, and after submitting verification reports are issued and paid for REVs. Projects must sign a contract with the FES-CO2 in order to be registered and units credited. The price of a carbon credit started at EUR7.10/tCO2e in 2012 before increasing to EUR9.7/tCO2e in 2015. In the 2021 call-out the FES-CO2 incorporated 2 price modalities for projects: the first one with a fixed price of 9,7 € for small-medium scale projects; the second modality applies to innovative and big projects and consists on an auction where projects could offer a price below 9,7 € (the lowest price offered has been 8,49 €). The FES-CO2 has signed more than 450 contracts to support over 700 project activities. In 2020 the objective and scope of the Fund was broadened, to promote adaptation and removal activities (both new to the FES-CO2) and add new activities to support industrial and energy innovation projects. This is intended to support the additional efforts needed to achieve carbon neutrality by 2050. In 2025 a new Royal Decree on FES-CO2 regulation is expected to be adopted. Its draft already been subjected to public information, and it is envisaged to include adaptation and removal projects, as well as to promote innovative reduction projects in power generation and industry sectors, which are expected to achieve significant reductions in order to help towards decarbonization.

Recent Developments

The 8th of January of 2026 entered into force a new regulation, the Royal Decree 1151/2025 of 17 December, which regulates the Carbon Fund for a Sustainable Economy. This new Royal Decree modifies the scope of potential projects by broadening the eligible activities to adaptation and removal projects, as well as promoting industrial and power generation decarbonization projects that are innovative. Also, the Royal Decree expands the ways of financing these activities.

Relation to Compliance Carbon Pricing Instruments or other Voluntary Schemes in the country

Not Specified

Eligible Activities

Agriculture

Energy Efficiency / Fuel Switching

Fugitive Emissions

Industrial Gases/Manufacturing

Transport

Waste