Spain’s biomanufacturing sector is starting to scale thanks to EU financing and the country’s wider economic renaissance.
Major EU funds are now flowing to Spanish companies to validate processes and expand biobased capacity.
We delve into how a renewable energy explosion set Spain on a path towards both economic prosperity and biobased scaling.
EU funds flowing
At the end of 2025, Spain ranked as the largest recipient of EU Horizon Europe biobased funding. The company with the lion’s share was Natac – one of Spain’s most significant biomanufacturing players.
Natac develops ingredients from agrowaste for customers across Europe, Asia, and the Americas. On top of its commercial success, the company embodies Spain’s increasingly fruitful relationship with EU biobased funding bodies.
Right now, Natac holds an annual processing capacity of 3000 tonnes of raw materials at its manufacturing in Hervás, Spain. However, its capacity is about to get a lot bigger thanks to EU support.
The company is at the heart of an EU-funded construction project. It is set to expand Natac’s existing plant into a 20, 000 tonne per year capacity site. By the end, the plant will be able to turn local biomass and agricultural side-streams into high value industrial ingredients for food, feed, cosmetics, chemicals, and bio-fertiliser.
From small to big
Spain’s biotech innovation pipeline is world-class but the country’s bioeconomy still lags on large-scale commercial capacity.
According to estimates, there are 95 bioprocesses and 53 biobased technologies currently being developed in the country. Most are in small to medium size enterprises that do not necessarily have the capital to expand production.
Despite the dominance of smaller businesses, scaling momentum is underway. This is being helped by the EU, which is pumping significant funds to Spanish companies to validate bio-processes or scale production.
Apart from Natac, Catalyxx is the other major Spanish recipient of EU funding for biobased scaling. In July this year, it earned a €20 million grant from the CBE JU programme RenewChem. Thanks to his money, the company was able to shift from tech demonstration to commercial-scale production.
The Catalyxx investment was slightly under the total €22.406.558,75 that the Natac plant expansion received. The EU contributed €13.996.379,25 to the total budget for the latter.
Both projects signal a major vote of confidence from the EU institutions in these firms, as well as in Spain’s potential as a biobased scaling hub.
A testing ground
As well as EU-backed commercial projects, Spain is also making a name for itself as a testing ground for new bio-processes. On the EU’s DEEP PURPLE research programme, for example, the country is hosting one of two biorefineries trying to scale purple phototropic bacteria in wastewater treatment.
Another EU-funded biorefinery system-in-development launched in Valencia last year. Known as Solress, it is developing an integrated biorefinery for 5 major industrial solvents using biomass waste. The EU contributed €7 million to its €9.1 million budget.
Spain’ s role in DEEP PURPLE and Solress attests to how important the nation’s companies and research institutes have become in piloting, demonstrating, and validating new biobased processes that could one-day be rolled out across the bloc.
Enticing investment
The prospect of getting public financing will be a draw for companies mulling new biobased capacity in Spain.
Already, private sources of funding for Spain’s biobased industries have been on the up. Just eleven months ago, Germany’s Symrise AG officially opened a new production unit at its facility in Granada, where it will produce Hydrolite 5 green, a biobased cosmetics ingredient.
Over in foodtech, the country is also attracting attention. Spanish startup InsectBiotech has raised $8.3 million to build a new facility in Andalusia using black soldier fly larvae to convert olive oil and after agrowaste into protein, oil, and fertilizer. Meanwhile, BioTech Foods is constructing its first cultivation protein plant.
Spain’s industrial resilience
Spain’s growing confidence as a hub for biobased scaling and demos tracks its general economic success, with growth rates that have been almost unique in Europe.
Its manufacturing sector has grown at almost three times the eurozone average since 2018 – +1.7 per cent versus +0.6 per cent.
More recently, too, Spain has withstood global energy shocks. Its economy grew 2.8% last year, far outpacing its European neighbors, showing it is withstanding the fall out of the Ukraine and Iran war far better than most of its neighbours.
Growth is also happening in science-led industries like biotech and chemicals. Biotech in the country has jumped from around 50 companies in the country two decades ago to 1,119 in 2025. Last year, the country’s biotech sector surpassed 400 million euros in capital investment – a historic record.
Biotech is still a relatively small share of Spanish GDP but chemicals are already a major contributor. Heavily concentrated in Barcelona, Tarragona and Huelva, with other hubs around the country, it is generating €85.417 billion in revenue, accounting for 12% of industrial GDP and 4% of its GDP.
No end in sight for biogas scaling
Biogas is one sector where Spain’s scaling ambitions have been most fully realised, with McKinsey speculating it could even emerge as a leader in EU production.
Major biogas investment announcements are being made all the time, reflecting the country’s large agricultural waste pool and a favourable policy environment.
Last year, HoSt and Five Bioenergy signed to construct what could become the biggest biogas plants in the country. CycleØ also announced a €200 million investment to operate 30 biogas plants in Spain in addition to the three it already runs.
A year later, Danish renewable investment firm Copenhagen Infrastructure Partners (CIP) has invested in what will become one of Spain’s largest biogas plants in Lérida, Catalonia.
The biogas spree follows on the heels of targeted support for the biogas sector from the Spanish government.
Its 2022 biogas roadmap projected a 3.8-fold increase in current levels of biogas production by 2030. In 2023, the government announced a post-COVID support package for 81 projects with a total budget of 475.5 million euros. It was launched by the Ministry for Ecological Transition and the Demographic Challenge.
There’s still room for growth in the industry too. One estimate says that Spain has the potential to produce up to 163 terawatt hours per year from biomethane, and the country ranks third in the EU for biomass availability.
Spain’s solar-powered rise
Spain’s economic trajectory is impressive for two reasons. First, its economic turnaround happened relatively recently and rapidly. The country had been on the decline since the 2008 financial crisis until around 2017.
Second is how well Spain has performed under macroeconomic pressure compared to industrial powerhouses like Germany and France.
Between the final quarter of 2019 and the second quarter of 2025, Spanish manufacturing’s value added rose by 9.4%. During the same time, the metric in France and Italy stagnated, while Germany’s declined by 3.2%, mainly thanks to the energy shocks caused by the wars in Ukraine and Iran.
Investment into domestic solar capacity is one of the biggest reasons for Spain’s revival and resilience. The country has more utility-scale solar capacity than any other European country. This has protected Spain somewhat from the global energy shock now pummelling the chemical industry across the rest of Europe.
Spain’s solar-powered energy security meant that between 2024 and 2025, its production in energy-intensive industrial sectors was higher than in Germany, France, Italy, and the Euro area as a whole.
The cost of land is another factor explaining rising interest in Spanish biomanufacturing capacity. Average laboratory rents in Spain range between €18 and €30/m²/month, which is significantly lower than those in established markets like the US.
Although its new energy base buffers the economy somewhat, Spain is not immune from the same pressures that its neighbours are facing. It has a long way to go on decarbonisation targets too. Spain’s chemicals must reduce 12.4 million tonnes of annual CO2 emissions by 2050. More investment is needed to open new capacity in biobased and circular solutions that can cut fossil demand.
Turning point
With a large feedstock pool, significant renewable energy capacity, and world-leading research output, Spain has everything in place to emerge as a major EU bio-producer.
While its biotech and biochemicals industries have so far been dominated by SMEs, the sector is now at a turning point. Companies there are now receiving major EU support for scale-up, while the country is becoming a key hub for validating new bio-processes under CBE JU projects.
Behind Spain’s biomanufacturing momentum is a wider economic revival in the country powered by assertive policy to scale renewable energy.
Spain’s renewable capacity sets up the country for long-term resilience, giving industries reliable energy access and some buffer from fossil import volatility.
Spain’s strong industrial performance under global macroeconomic pressure offers other EU countries a playbook for success. It is proving that investment into renewable energy is non-negotiable when it comes to building a competitive bioeconomy and can combat the economic headwinds undermining productivity elsewhere in the bloc.
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