Onur Genç, speaking in Davos: “We have a great opportunity to promote investment in cleantech on a major scale”

Onur Genç stressed that the creation of new industrial clusters centered on cleantech is being driven by innovative financing, public-private partnerships, and regional collaboration. This development is not only facilitating the country’s energy transition but also generating positive spill-over effects across Europe.

The BBVA CEO emphasized the importance of focusing on technologies where Spain holds a significant competitive edge, including storage and batteries, electricity grids, hydrogen and biofuels, the circular economy, and recycling. “For BBVA, sustainability is a strategic pillar that we view as a major business opportunity,” he stated.

He also stressed the importance of implementing policies that drive the energy transition. “We need industrial climate policies that provide clear demand signals and incentives to boost the transformation at the scale and predictability required. This together with faster permitting and de-risking mechanisms to enhance bank activity will be critical to support the industrial competitiveness of companies,” he said. In his view, there is also a need to make virtuous use of ETS revenues for innovation and manufacturing of clean technologies.

Ultimately, the transition to a net-zero emission economy requires a profound transformation as well as huge and sustained investments over time. There are still many activities without cost-viable technological solutions that require investment in innovation, he said.

The bank's CEO pointed to the tremendous opportunity to close the innovation gap and drive decarbonization offered by both the EU Clean Industrial Deal, which will be announced by the European Commission in late February, and Spain’s own Law on Industry and Strategic Autonomy.

Cleantech challenges

Onur Genç reiterated the key challenges facing innovative cleantech projects: high upfront investment requirements; market uncertainty; technological risk arising from the failure to deploy many cleantech solutions on the scale needed; and regulatory uncertainty affecting the green premium of these technologies.

BBVA’s CEO was speaking at the WEF summit being held this week in Davos (Switzerland) within the framework of the Industry and Energy Transition Initiative in Spain and Portugal (IETI). The event was attended by Teresa Ribera, Executive Vice-President of the European Commission for a Clean, Just and Competitive Transition; Sara Aagesen, Vice-President and Minister for Ecological Transition and the Demographic Challenge of the Spanish government; along with chairs and CEOs of some of the big names who are part of this initiative: EDP, Iberdrola, Moeve, Naturgy, Repsol and Santander, as well as McKinsey, who is heading up this IETI.

The IETI considers that the natural resources, robust industrial base and human talent offered by Spain and Portugal provide an unrivaled opportunity to revitalize Europe’s overall competitiveness while boosting the energy transition. According to the initiative’s estimates, the transition could push up regional GDP by up to 15 percent and create around one million jobs (700,000 in Spain and 300,000 in Portugal), 20 percent of which would be highly qualified. It would also increase the revenues of both countries by some 5–10 percent, as well as total national exports by around 20 percent.

Spain and Portugal are very well placed as they have a highly competitive decarbonized energy system (20–25 percent cheaper than in Central Europe) and are able to make the Iberian Peninsula more competitive and grow its high-value industries, while at the same time contributing to European targets, according to forecasts made public by the IETI at this event.