Polymer materials manufacturer Covestro and bp have inked a long-term power purchase agreement (PPA) to procure renewable energy from a solar power plant located in Spain. This 10-year deal marks a significant step for Covestro, elevating the share of renewable energy in its total electricity consumption in Spain from less than 10 percent to approximately 30 percent. The move aligns with Covestro’s ambitious goal to achieve operational climate neutrality by 2035.
Previously, Covestro had committed its three smaller production sites in Spain—located in Zona Franca in Barcelona, Parets del Vallés, and Santa Margarida i els Monjos—to operate solely on 100 percent renewable electricity starting from 2022. With this new agreement, a substantial portion of the electricity demand at its main production site in Tarragona can now also be met through renewable sources, resulting in a projected reduction of approximately 16,000 tonnes of CO2 emissions annually.*
Thorsten Dreier, CTO at Covestro, emphasized the company’s commitment to increasing the proportion of renewable energy across its global operations: “With the PPA, we are demonstrating Covestro’s dedication to leveraging renewable energy sources worldwide. We firmly believe that our vision of embracing the circular economy and achieving climate neutrality is essential for our long-term success.”
Olvido Moraleda, president of bp Energía España, highlighted the significance of this agreement for bp’s operations in Spain: “This marks a major milestone for bp, enabling us to supply renewable energy through a PPA to a key industrial partner. It underscores bp’s strategy to evolve into an integrated energy company, providing lower-carbon solutions to traditionally challenging sectors.”
Andrea Firenze, General Manager at Covestro Spain, underscored the importance of sustainability in their strategic initiatives: “Sustainability is integral to everything we do, and this agreement represents a further step towards optimizing energy efficiency and sustainability throughout our value chain. Partnering with bp enhances the strategic positioning of our Tarragona site by securing a stable, predictable, and sustainable long-term energy supply.”
Jason Tate, head of European power trading and origination at bp, highlighted the broader implications of the agreement: “This agreement not only demonstrates bp’s commitment to Spain but also illustrates our ongoing investment in capabilities to support European commercial and industrial customers in achieving their decarbonization objectives.”
Under the terms of the agreement, bp will supply Covestro with a significant volume of renewable electricity annually for the next decade, supported by Guarantees of Origin (GoO). The renewable power is expected to be sourced from an operational solar photovoltaic (PV) farm in Teruel, located in the Aragon region of eastern Spain, with which bp has an existing offtake arrangement.
Covestro aims to transition all its production sites to 100 percent renewable energy by the end of 2035, having already fulfilled approximately 16 percent of its global electricity needs from renewable sources by the close of 2023.
bp has been active in the Spanish natural gas market for over two decades, managing its LNG portfolio and supplying commercial and industrial customers. In the power and renewables sector, bp maintains a portfolio of solar offtake agreements and is expanding its footprint in supplying renewable power, reflecting a key growth area for bp’s trading business in Europe.
*Estimate based on Scope 2 market-based CO2 emissions calculations that Covestro would have reported if using grey electricity from their current local supplier for the same amount of energy.
