Spain’s recovery and resilience plan

RRF FUNDED PROJECTS IN SPAIN

WHAT’S IN THE PLAN?

The reforms and investments in Spain's plan, approved by Council on 13 July 2021, are helping it to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition. Following Council approval of Spain’s plan on 13 July 2021, Spain’s recovery and resilience plan was updated on 17 October 2023 increasing its allocation and also introducing a REPowerEU chapter.

^{*The approved Plan is entirely financed with RRF grants}

• 142 investment streams and 111 reforms
• 40% of the plan will support the climate objectives 
• 26% of the plan will foster the digital transition

The transformative impact of Spain’s plan is the result of a strong combination of reforms and investments which address the specific challenges for Spain. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to accelerate the transition towards a more sustainable, low-carbon and climate-resilient economy, to maximise the benefits of the digital transformation and to ensure social cohesion. The plan also intends to improve connectivity within the country, boost labour market performance, innovation capacity of the economy and make public spending more efficient and sustainable. 

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

Spain’s plan now includes one reform, one scaled up investment and seven new investments to reduce its reliance on fossil fuels, in line with the REPowerEU objectives.

To finance this increased ambition, Spain has asked for a share of its Brexit Adjustment Reserve to be transferred to the plan, amounting to €58 million. These funds would be added to Spain's REPowerEU grant of €2.58 billion and to the EUR 1.7 billion in loans that Spain has allocated to that Chapter.

Key measures for REPowerEU

The REPowerEU chapter includes one new reform that will streamline permitting procedures for renewable energy projects. The chapter includes one scaled up investment to support self-consumption, energy storage and energy communities and 7 new investments: a public investment in a support scheme to improve access to finance in the value chain in the design, manufacturing, storage, recycling or research & development of technologies and components relevant for the transition to a net-zero-emission economy; a public investment in a support scheme to support renewable hydrogen and an investment to deploy new electricity transmission infrastructure to integrate larger volumes of renewable energy and to connect new net-zero industrial sites to the electricity network and four investments to support industrial decarbonisation, two of which in the form of support schemes.

In the area of climate and environmental policies, Spain faces the challenges of the significant renovation needs of its building stock to increase energy efficiency, of making mobility and the transport sector more sustainable, and of further increasing the share of renewables in the energy mix. Spain also faces challenges in the area of biodiversity (including transformation of the agri-food and fishing systems and preservation of ecosystems integrating climate change adaptation) and the need to enhance water and waste management.

Key measures for the green transition

• The plan supports the green transition through investments of over €12 billion in the energy efficiency of public and private buildings including new social housing.
• €13.2 billion will be invested in sustainable mobility in urban and long-distance, by
  • improving railway infrastructure,  
  • creating low-emission zones in urban areas,  
  • financing green public buses,  
  • deploying electric charging stations and developing urban public transport.

• The plan supports the decarbonisation of the energy sector by investing €6.1 billion under the original plan, EUR 6.9 billion under the REPowerEU chapter and EUR 22 billion under the financial instrument ICO Green Line, in clean technologies and infrastructure (including storage and electricity grids) and accelerating the development and use of renewables, including renewable hydrogen.
• The plan also includes measures to help mitigate the adverse effects of climate change by preserving coastal spaces, ecosystems and biodiversity.
• It promotes the circular economy by improving water and waste management in the country.
• The plan includes a Law on climate change and energy transition establishing into law the renewable targets for 2030 and the objective of climate neutrality by 2050, including a 100% renewable electricity system.  
• It also includes a Renewable Hydrogen Roadmap, new strategies for building rehabilitation, decarbonisation and energy storage, and new procurement auctions for renewable electricity.

The modified plan, including the REPowerEU chapter, has further strengthened the focus on the plan on the green transition, devoting €67 billion of the available funds to measures that support climate objectives (up from €27.6 billion in the original plan).

Digital challenges for the Spanish economy include a high share of the population with an insufficient level of digital skills and a shortage of workers with specialist digital skills. This hampers digitization of society and is one of the barriers to investment in Spain.

Key measures for the digital transition

• Spain’s recovery and resilience plan supports the digital transition with investments in the digitalisation of the public administration, in digital skills and digital inclusion, in cyber security and in connectivity. 
• It will invest €3.6 billion in digital skills training.
• The plan will invest €4.5 billion in the digital transformation of the public administration, with a special focus on the justice, health care, employment, educational and social services systems.
• The plan also includes €10.2 billion investments to promote the digitalisation of industry and SMEs, investments in artificial intelligence, digitalisation of tourism and culture systems, and € 15.4 billion to support fixed and 5G connectivity, data infrastructure and the related ecosystem.
• The plan includes the Digital Spain Agenda 2025, the 5G cybersecurity law, the Artificial Intelligence strategy, the digital skills Plan and a law on telecommunications to upgrade the regulatory framework with the development of new regulatory and enforcement instruments.

The modified plan has further strengthened the focus on the plan on the digital transition, devoting €40.4 billion of the available funds to measures that support digital objectives (up from €19.7 billion in the original plan).

Key macro-economic challenges for the Spanish economy include a high unemployment rate - in particular for the youth – and high share of workers on temporary contracts, low productivity growth, large stocks of external, private and government debt, as well as low public investments in particular for the digital and green transitions. These challenges weigh on potential growth and employment.

Key measures in reinforcing economic and social resilience

• The plan reinforces economic and social resilience with measures fostering effective and inclusive education systems to reduce early school leaving rate, skills acquisition in line with current and future labour market needs, including the green and digital transition, and measures to improve the employability of the youth. 
• It also puts forward a labour market reform to reduce the high share of workers on temporary contracts.
• There are substantial investments to upskill and reskill workers and to modernise the vocational education and training system. 
• The plan also provides for specific actions in the area of active labour market policies, including reforming the system of hiring incentives, developing individual pathways for counselling, reinforcing the system of adult learning, and modernising public employment services.
• Spain will invest €2.1billion in reskilling and upskilling measures, teachers training, digitalisation and internationalisation of VET and €4.8 billion will boost Spain’s innovation capacity by financing research and innovation infrastructure and programmes.
• The plan includes measures to make public spending more efficient and sustainable. Spending reviews will contribute to improve the quality and efficiency of Spain’s public spending, allowing to reprioritise it towards more growth and environmentally friendly expenditures. A reform of the pension regime is expected to improve the sustainability and adequacy of pensions.

Annual events facilitate the exchange of views on the state of implementation of the Recovery and resilience plans, while ensuring close cooperation between all stakeholders and providing a platform to discuss interlinks between the Plans and other Union programmes. 

More information on Annual events held in Spain can be found here

Spain’s plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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