EU / Spain — CISAF Industrial Decarbonisation Scheme SA.119880: EUR 408 million grant support for electrification, hydrogen switching, waste heat recovery and CCUS

Mechanism

Spain notified the Commission of a EUR 408 million horizontal scheme to support decarbonisation of manufacturing processes, approved under the Clean Industrial Deal State Aid Framework (CISAF) that the Commission adopted on 25 June 2025, and funded via the Recovery and Resilience Facility (RRF) rather than the national budget. Unlike the CISAF Section 6.1 "cleantech manufacturing capacity" cohort already in the register (Hungary SA.120705, Germany SA.121215, Greece SA.117469, Luxembourg SA.120921, France SA.120765) — which subsidise building new production capacity for net-zero technology products (batteries, solar, wind, electrolysers) — the Spanish scheme targets emissions reduction inside existing industrial processes: electrification of heat/power inputs, switching from fossil fuel to renewable or low-carbon hydrogen, recovery of waste heat, and carbon capture, storage and utilisation. Eligible sectors span chemicals, ceramics, paper and metallurgy, among others, and the scheme is open to installations both inside and outside the EU Emissions Trading System.

Aid takes the form of direct grants, capped at EUR 200 million per beneficiary company or project, awarded first-come-first-served until the budget is exhausted. Projects must become operational within 60 months of the aid grant, and the scheme explicitly cannot be used to finance an increase in production capacity — a standard CISAF anti-overcapacity condition. The Commission assessed the measure under Article 107(3)(c) TFEU and found it necessary, appropriate and proportionate. Spain projects annual GHG savings of roughly 1.6 megatonnes of CO2 from the funded investments.

Downstream implications

• **First "decarbonisation of production" CISAF approval in the register, distinct from the

cleantech-manufacturing-capacity cohort**: prior CISAF filings (Hungary, Germany, Greece, Luxembourg, France) all fall under the Section 6.1 capacity-building strand; Spain's SA.119880 is closer in kind to Italy's SA.118992 renewable-hydrogen CfD scheme in that it subsidises emissions reduction in existing industrial output rather than new clean-tech product lines.

• RRF funding channel: unlike most CISAF schemes financed from national budgets, this one

draws on Spain's Recovery and Resilience Facility allocation, tying its disbursement timeline to RRF absorption deadlines rather than open-ended national appropriations.

• Sectoral breadth over single-technology focus: chemicals, ceramics, paper and metallurgy are

energy- and emissions-intensive tradeable-goods sectors exposed to the EU CBAM and to non-EU competitors without equivalent carbon costs — this scheme is a direct competitiveness offset alongside decarbonisation.

• ETF exposure: ICLN holds EU-listed decarbonisation-technology suppliers; EWP (Spain-focused)

captures listed Spanish industrial and utility names with potential scheme exposure (though no individual beneficiary has been named in the Commission's press materials).

Open questions

• Which named companies or facilities will draw down the EUR 200 million per-project cap first,

and will any require individual large-aid notification distinct from this horizontal scheme?

• Will the Commission publish a non-confidential SA.119880 decision text with a beneficiary

register, as it has for some other CISAF cases?

• Does Spain's RRF funding source create a hard 2026 (RRF-cycle) disbursement deadline distinct

from the open-ended national-budget CISAF schemes elsewhere in the cohort?