Carbon excluding graphite or diamonds market in Spain

Earlier Report Observations

The Spanish market for carbon excluding graphite or diamonds contracted from 184 thousand tons in 2018 to 164 thousand tons in 2020, influenced by the tightening of the EU Emissions Trading System (EU-ETS). Phase III of the EU-ETS, with a linear reduction factor of 1.74%, limited free emission allowances for industrial sectors, increasing costs for carbon-intensive production. This was followed by modifications to the Carbon Leakage List and Spain's Law 9/2020, which raised the reduction factor to 2.2% from 2021 and made auctions the primary allocation method.

Market volume rebounded to 171 thousand tons in 2021 and surged to 246 thousand tons in 2022, driven by post-COVID-19 economic recovery and state aid measures. The Spanish government's Royal Decree 309/2022 provided €244 million in compensation to vulnerable sectors like steel and paper, maintaining 30% free allocation until 2026. However, the introduction of the Carbon Border Adjustment Mechanism (CBAM) in May 2023 imposed a carbon cost on imports, causing market volume to drop sharply to 167 thousand tons in 2023.

Further regulatory pressure under the EU's Fit-for-55 agenda continued to shape the market in 2024. Royal Decree 203/2024 extended free allocation rules for 2026-2030 and excluded small emitters, while planned annual reduction rates increased to 4.3% for 2024-2027. These measures contributed to a decline in market volume to 138 thousand tons in 2024.

Production carbon excluding graphite or diamonds in Spain

In value, 2017-2020, K $ US

Spain's production of carbon excluding graphite or diamonds has grown for the third consecutive year. In 2020, the output was valued at 95 391 thousand US dollars, marking a 3.8% increase from 2019. Between 2017 and 2020, production rose by 54.9%, which translates to an annualized growth rate of 15.7%.

Annual dynamics of production in Spain in value, 2017-2020, K $ US

In kind, 2017-2020, t

Following two years of growth, Spain's production volume of carbon excluding graphite or diamonds declined. In 2020, Spain produced 72 741 tonnes, representing a year-on-year decrease of 14.4%. Over the 2017-2020 period, production increased by 4.3%, with a compound annual growth rate of 1.4%. The peak was recorded in 2019 at 84 976 tonnes, which also saw the largest annual increase of 19.3%.

Annual dynamics of production in Spain in kind, 2017-2020, t

Exports carbon excluding graphite or diamonds from Spain

Exports in kind, K t

The market exhibited volatility during the observed period. Exports reached their lowest point in 2017 and peaked in 2018, with a 1.7-fold difference between these years. In 2020, Spain's export volume of carbon excluding graphite or diamonds was 20.2 thousand tonnes, showing a slight decline of 1.8% compared to 2019. The maximum value was recorded in 2018 at 33.1 thousand tonnes, which also experienced the largest annual increase of 70.7%. The largest decline occurred in 2019, with a drop of 37.9%.

Annual dynamics of product's exports from Spain in kind, 2017-2020, K t

From 2017 to 2020, Portugal, France, and Germany were the leading destinations for Spain's exports of carbon excluding graphite or diamonds in volume terms. Portugal accounted for 27.6% of exports, France for 17.8%, and Germany for 11.0%, together representing 56.3% of total export flows.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Spain in kind, 2017-2020

Exports in value, M $ US

Market behavior was characterized by volatility during these years. Export values varied 2.1 times, from the low in 2017 to the high in 2018. In 2020, Spain exported 29.3 million US dollars worth of carbon excluding graphite or diamonds, equivalent to a 39.0% decrease from the previous year. The peak was recorded in 2018 at 52.5 million US dollars, which also saw the largest annual increase of 108.8%.

Annual dynamics of product's exports from Spain in value, 2017-2020, M $ US

Between 2017 and 2020, Portugal, France, and Germany formed the main cluster of markets for Spain's exports of carbon excluding graphite or diamonds in value terms. Portugal contributed 30.6% of export value, France 17.5%, and Germany 14.7%, collectively accounting for 62.8% of total flows.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Spain in value, 2017-2020

Imports carbon excluding graphite or diamonds to Spain

Imports in kind, K t

In 2020, Spain's import volume of carbon excluding graphite or diamonds reached 111.5 thousand tonnes, reflecting an 8.7% improvement from the year before. Over the 2017-2020 period, imports decreased by 14.5%, with a compound annual decline rate of 5.1%. The minimum was recorded in 2019 at 102.5 thousand tonnes, which also experienced the largest annual decline of 29.6%. The maximum was in 2018 at 145.7 thousand tonnes, which saw the largest annual increase of 11.7%.

Annual dynamics of product's imports to Spain in kind, 2017-2020, K t

Throughout 2017-2020, Egypt, France, and Germany played the leading roles in Spain's imports of carbon excluding graphite or diamonds in volume terms. Egypt accounted for 22.5% of imports, France for 16.9%, and Germany for 15.7%, together making up 55.1% of total import flows.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Spain in kind, 2017-2020

Imports in value, M $ US

Spain's imports of carbon excluding graphite or diamonds declined for the second consecutive year. In 2020, imports amounted to 123.2 million US dollars, indicating a 30.1% reduction compared to the prior year. Over the 2017-2020 period, imports decreased by 14.1%, with a compound annual decline rate of 4.9%. The peak was recorded in 2018 at 186.5 million US dollars, which also saw the largest annual increase of 30.0%.

Annual dynamics of product's imports to Spain in value, 2017-2020, M $ US

From 2017 to 2020, Egypt, Russia, and Germany formed the key group of partners for Spain's imports of carbon excluding graphite or diamonds in value terms. Egypt contributed 19.8% of import value, Russia 17.0%, and Germany 16.8%, jointly representing 53.5% of total flows.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Spain in value, 2017-2020