repsol_2012_carbonstrategy

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Our performance in 2012

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Our data Internationalframework

Carbonstrategy

Carbon Markets Reducing carbonintensity in our

value chain

Non-fossilenergy

Ourresults

When reporting performance indicators for energyand carbon, we follow industry guidelines drawnup by the American Petroleum Institute (API), theInternational Petroleum Industry EnvironmentalConservation Association (IPIECA) and theInternational Association of Oil & Gas Producers (OGP).

Repsol cannotignore the challengefacing humanity. Ourresponse is to definea carbon strategythat helps us takeaction to reduce theenergy and carbonintensity from all ouroperations andlocations worldwide.

Promoting a low carbon strategy. Our data

Carbon strategy

Our data 55 56

One of the biggest challenges facing our society is to develop asustainable model that ensures a sufficient and secure supply ofenergy. We need to improve security in energy supply, whileachieving sustainable and competitive economic development,and improving the environment, by reducing emissions ofgreenhouse gases and other atmospheric contaminants.

2010 2011 2012

Direct greenhouse gas emissions (Scope 1)57

CO2 (million of tons) 12.10 12.29 13.24

CH4 (million of tons) 0.026 0.026 0.028

N2O (tons) - 807 724

CO2eq (million of tons) 58 12.7 13.1 14.1

Intensity of greenhouse gases emissions

Intensity of exploration and production emissions (metric tons ofCO2e/Tons of oil equivalent)59

0.265 0.267 0.241

Intensity of refinery emissions (metric tons of CO2e/metric tons of

processed crude oil and other raw materials)60 610.265 0.310 0.298

Energy consumption

Fuel (million of tons)62 3.64 3.63 3.75

Electricity purchased (106 MWh) 1.57 1.21 1.77

Steam purchased (106 GJ) 5.38 3.77 3.56

Total energy consumption(106 GJ) 170.0 172.6 178.6

Sales of biofuels (thousands of metric tons)

Biodiesel 63 64 900 1,040 1,028

Additional information on emissions

More information onaccounting for andverification of ouremissions atreconocimientos.repsol.comand details of our results atdesempenoyobjetivos.com

Bioethanol 65 224 257 172

Additional information on emissions (millions of metric tons) 2012

Direct emissions of CO2e based on shareholding (Scope 1) 20.79

Indirect emissions of CO2 associated with the purchase of electricity and steam (Scope2)

0.81

Indirect emissions of CO2 associated with the purchase of hydrogen (Scope 3) 0.76

Emissions of CO2 derived from the marketing of products (Scope 3) 66 (Scope 3) 117.04

(55) For further information on the scope of the data in this chapter, see "Scope of the

Report" in chapter "About this report"

(56) To improve comparability over time, data from previous years have been adjusted in

line with changes in the company's asset structure, based on oil-industry reporting

guidelines (API/IPIECA/OGP). In March 2012, the Government of Argentina expropriated

Repsol's majority holding in YPF, as a result of which 2012 inventories and those of

previous years have been adjusted, eliminating the data from expropriated facilities.

(57) For data on emissions from mobile sources, only those associated with the transport

itself are included.

(58) Data from 2011 and 2012 include N2O emissions verified according to the ISO 14064

international standard.

(59) Data calculations based on CO2 from direct emissions and indirect CO2 emissions

associated with the purchasing of electricity and steam.

(60) Data calculated based on CO2 from direct emissions (the 2011 and 2012 data

includes N2O emissions verified under the ISO 14064 international standard) and indirect

CO2 emissions associated with the purchase of electricity and steam.

(61) The criteria have changed for the calculation of the refining emissions indicator, and

the total processed raw materials is now taken into account, and not just the processed

crude.

(62) The 2012 data includes 1.13 million metric tons of natural gas consumed (0.92 and

0.85 million metric tons were included in 2011 and 2010 respectively).

(63) Includes data from Spain, Peru, Italy and Portugal. The 2010 data has been corrected

for the sales of assets in Brazil.

(64) The total amount of biodiesel includes 263.640t of hydrogenated vegetable oil

distributed in Spain, the rest of the amount traditional biodiesel (fatty acid methyl esters -

FAME).

(65) Includes data from Spain and Peru.

(66) Data calculated based on API methodology (American Petroleum Institute): The

Institute's Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Gas

Industry 2009.

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During the summit, several outstanding so-calledLong-term Cooperative Action Working Groupissues were finalized, focused on the commitmentof several countries to provide support for theGreen Fund within a framework of funding andwork programs for climate change adaptation andmitigation.

A new Working Group was formed, the DohaClimate Gateway, with responsibility for definingthe legal status of the future global agreementplanned for 2015 and to come into force from2020 onwards. Progress is expected in 2013, andworld leaders will meet in 2015 with a view toachieving a draft agreement ready for signature inthe COP that same year.

In this second period, it is possible to transfer anysurplus carbon credits issued under the firstperiod, with restrictions having been placed on thepurchasing of credits from third countries. Severalof the signatories (including the EU) have signed adeclaration of policy not to buy surplus creditsfrom other countries, which means demand willbe practically nonexistent. A review of targets willalso be imposed in 2014, which is expected to besignificant.

No major decisions were made about the CleanDevelopment Mechanism (CDM) in Doha, leavingit open to possible reforms next year.

Carbon strategy

Advancements in international agreements

During 2012, the Conference of the Parties (COP 18) was held inDoha and concluded with an extension of the Kyoto Protocol for anew period from 2013 to 2020. This follows directly from theprevious global agreement, but the withdrawal of Canada, Russia,Japan and New Zealand has weakened its effect.


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The drivers of Repsol's carbon strategy are:

1. Commitment to society and the environment

We share with governments, citizens and societythe challenge of combating the potential effects ofhuman activities on climate. Our work has beenrecognized by the Dow Jones Sustainability Index,Repsol has taken first place in the Oil&Gas sectorleague table for the second year running. Ourcommitment to society is based on the principlesdescribed in our Position on Climate Change.

More information atpolitica.cambio.climáticorepsol.com

We will continue to collaborate with thegovernments in our countries of operation tofacilitate compliance with national andinternational commitments, particularly during thenew post-Kyoto period and we provide constructivesupport for the development of new regulations.

2. Reducing energy intensity in our value chain

Our strategy is to promote initiatives that reduceenergy intensity, and in turn, greenhouse gasemissions (GHG), throughout the life cycle of ourproducts.

We know that improvement is not possible withoutreliable measurement, and so we aim forexcellence in our GHG inventories, working tocontinually extend the scope of our emissionsinventories and to improve their quality andtransparency.

Repsol manages the GHG emissions of our ownfacilities and activities, and we also developambitious carbon intensity reduction programs forthose activities. Much of our production-relatedemissions come from our supply chain activities,as well as from our customers' use of ourproducts. For that reason, a range of actions arebeing undertaken to include these indirect

Carbon strategy

Carbon strategy

We continued working on our carbon strategy throughout 2012.This brings together all the Company's existing initiatives toreduce energy and carbon intensity in all of our businesses,identifying synergies between these initiatives.

emissions, known as Scope 2 and 3 emissions, aspart of the Company's carbon footprint.

We include Scope 2 electricity and steamemissions that we are responsible for but do notgenerate. We are also working to include otherScope 3 indirect emissions in our Company'sfootprint, which are not under our control, but aredirectly related to our activities, such as emissionsderived from the production of our main rawmaterials and their transportation to our facilities,generated waste, business trips and employeetravel, and the transportation of our products toour customers' facilities.

We are also considering the emissions derivedfrom the use of our products. Although we are notresponsible for their control, these emissionsrepresent a high percentage of our products'footprint, as is the case with gasoline and diesel,in which the vehicle engine use phase accounts forover 80% of the total footprint. To this end, we areworking to calculate the footprint of our mainproducts.

To improve the quality of our inventories andensure their quality and accuracy, we have beenverifying our under the ISO 14064 standard forgreenhouse gas emissions since 2007, as well asthe ISAE 3000 assurance standard.

Repsol has also taken decisive steps to improveprocess energy efficiency, as the short-termmeasure with greatest potential to reduce energyconsumption and GHG emissions. To do this,Repsol has committed to a medium-term energyintensity reduction target along with annualprograms for the Business Units.

3. Developing non-fossil energy initiatives

We continue to develop non-fossil energiesthrough the New Energies Business Unit, whichidentifies business opportunities in fields such asbioenergy, renewable electricity generation, ortransport electrification.

More information onsustainability ratings atindices.repsol.com

Repsol and the Carbon Disclosure

Project 67

Repsol is the leading oil and gas company in

2012 for carbon management, according to

the Climate Disclosure Leadership Index

(CDLI), comprising the top 50 international

companies in communication and

transparency on climate change.Read more

(67) The information available from the response to the CDP 2012 questionnaire

corresponds to data from 2011 and previous years.


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Repsol is working along with the rest of the sectoron the possible measures that the EuropeanUnion may apply to stabilize the current surplus ofemission rights in the EU emissions tradingscheme (ETS) market, in the wake of the economicrecession. The European Union is weighing upshort-term measures, principally backloading. Thisrefers to the possibility of delaying the sale ofrights by auction from the start to the end of theperiod, as well as long term measures such as thedefinitive withdrawal of emission rights, or theapplication of an intersectoral correction factor thatprogressively reduces the number of rightsavailable throughout the period.

Repsol has purchased credits over recent years forClean Development Mechanism (CDM) and JointImplementation (JI) projects - provisions of theKyoto Protocol under which developing countriesare given assistance in development in ways thathelp offset carbon emissions elsewhere in theworld. Some of these credits were purchased in2012.

Fuel switching in Peru leads to carbon

reduction

We actively support the Clean Development

Mechanism (CDM), a tool included in the

Kyoto protocol that allows companies to

develop projects to reduce greenhouse gas

emissions, thus favoring sustainable

development and the implementation of

clean technologies in developing countries.

Under the auspices of the CDM, we have

developed a new methodology, AM0055

"Baseline and Monitoring Methodology to

Carbon strategy

Carbon markets

At the start of the new post-Kyoto period (2013-2020), the EUemissions trading scheme market is facing major changesincluding the introduction of a new auction model, to replace theprevious system involving free allocation of emissions credits.

account for the recovery and utilization of

waste gas in refinery facilities" and updated

on another called, AMS-III.B "Switching fossil

fuels", to facilitate the application of very

small-scale projects. There are currently nine

CDM projects worldwide that have used

these two methodologies we developed under

application to the United Nations.Read more


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Energy management

Repsol has committed to work to improve theenergy efficiency of our facilities. This involvesmaking better use of smaller amounts of energy toproduce the same service or product, and isessential to a more sustainable energy model thatreduces CO2 emissions. Energy efficiency istherefore one of Repsol's main channels forreducing our emissions and streamliningoperations in our plants and activities.

To achieve this, we have worked to implement aglobal Energy Management System (EMS) for thecompany, which has four main elements:

1. Medium-term objective

Repsol's business units each establish internalannual and medium-term objectives to reduceenergy intensity as part of their annual efficiencyplans.

2. Annual energy efficiency and CO2 reduction

plans

All our business units carry out detailed energyefficiency programs that identify steps toimprove our energy performance. Theseprograms also include action plans withobjectives and defined improvements. In 2012,over 175 efficiency actions were taken in ourfacilities and activities.

3. Certification under the ISO 50001international standard

Repsol uses benchmark international standardsto systematically standardize and implementnecessary systems. For energy efficiency, we usethe ISO 50001 standard. The PuertollanoRefinery achieved ISO 50001 certification of itsEMS in 2012, and became Repsol's second

Carbon strategy

Reducing carbon intensity in our value chain

Repsol is constantly working on a range of measures, to reduceenergy and carbon intensity in all our operations through emissionreduction opportunities and a commitment to energy efficiency.

refinery to do so, following A Coruña - theworld's first to achieve this certification - in2011.

The certification process in the PuertollanoRefinery involved participation from alldepartments throughout the complex, and alsoimproved its competitiveness, whilestandardizing and optimizing the facility's EMS.As such, we achieved one of our energy savingand efficiency goals, set a year ago. The EMSreduces energy consumption by streamlining allenergy management activities into a cycle ofcontinuous improvement. We developed toolsto identify, analyze and implement savingsopportunities, and efficiently monitor energyconsumption and related processes oractivities. The deployment of the system downto the smallest detail was only possible thanksto the commitment and responsibility of all thepeople involved in the refinery activities.

The ISO 50001 certification awarded to thePuertollano Industrial Complex was signed offby Lloyd´s Register Quality Assurance (LRQA),and meets the requirements of the Europeanregulation as an energy management standard.This supports the establishment of systems andprocesses to improve energy efficiency,reducing costs and GHG emissions throughsystematic management. The sameimplementation model is being followed in thechemical plant with the aim of achievingcertification during 2013.

4. Conducting energy studies and audits tohighlight opportunities to reduce ourconsumption and emissions

During 2012 Repsol continued to conductenergy studies and audits in the differentcompany units to find savings andopportunities to lower our consumption. Weconducted internal audits on four industrialrefining centers, as well as two inter-centeraudits of the Cartagena and Tarragonaindustrial centers, eight audits in Chemicalindustrial centers, one audit of refiningactivities in Peru, and seven audits in differentLPG units worldwide. More than 600 auditshave been carried out in over 500 servicestations in Spain.

There are dedicated lines of work in the RepsolTechnology Center to find opportunities forimprovement in the business units, which aim atoptimizing our processes as well as identifyingtechnologies and investments with significantpotential for reducing CO2 emissions.Methodologies are developed that aid energymanagement in refineries and chemical centers,systematically detecting potential energy savings in

the processing plants. These tools allow us to rankpotential savings and prioritize the allocation ofresources for improvement actions.

In 2012, the Repsol Technology Center and thePuertollano Industrial Complex completed theCO2FUNNELS project that investigatedcommercial applications of CO2 by converting thegas into biomass for use in energy generation.During the two years of the project, we undertookinnovative research work into the interaction ofbiomass, CO2 and the environment, andsuccessfully met the program's objectives.

At the European level, we contributed to thedevelopment of a roadmap for the EuropeanFramework Program Horizon 2020. This programprovides funding for research into energy efficiencyand resources, including issues such as CO2

capture and conversion. In 2012, the Technologydepartment initiated and collaborated in thecreation of SPIRE (Sustainable Process Industrythrough Resource and Energy Efficiency), a public-private association involving the chemicals,cement, steel, engineering, minerals and watersectors, among others.

Carbon management

Excellence in emission inventories

We know how important it is to set quantifiableand verifiable GHG reduction objectives. Toensure accuracy and transparency, our inventoriesare measured and verified along with theirreduction actions, and only those that comply withthe strictest international standards (ISO 14064and United Nations CDM methodologies) arecounted. These standards are an extra step wetake for transparency.

During 2012, Repsol extended the verificationscope of its CO2e inventory according to the ISO14064 international standard to include new E&Pbusiness facilities, including the new CPF gasprocessing plant in the Margarita field in Bolivia.

Over 90% for Repsol's direct tCO2e emissionsinventory is certified under this standard.

As we work to extend the scope of the inventoryand emission reduction actions to all our activities,2012 we have for the first time instituted inventoryverification and energy efficiency actions at anon-industrial facility, Tres Cantos, where our maindata processing center is located. These centersprovide and manage the information technologyservices we use, which requires significantelectricity for the devices and cooling.

Our emission reduction objective

The annual reduction target for 2012, approved bythe Executive Committee, was 164,516 metric tonsof tCO2e. Thanks to focused actions verified

according to the ISO 14064 standard, we exceededthe target, achieving a reduction of 442,843 t ofCO2e:

Emission reduction objective

The annual reduction targets for greenhouse gasesare established in accordance with the 2005-2013strategic objective set as 2.5 million tCO2e.

Repsol achieves its strategic GHG

emission reduction objective68

Repsol achieved a total reduction of

2,677,962 tCO2e from 2006-2012. This

means we surpassed our strategic objective

one year ahead of schedule. This achievement

is the result of our entire organization's

commitment to improve energy efficiency and

reduce GHG emissions.Read more

Emissions offsets

Our carbon strategy also includes offsetting thecarbon footprint of our activities and events. Oncewe have measured our carbon footprint and taken

Businessunit

Facility Numberof

actions

Type of actions REDUCEDEMISSIONS

(tCO2e)

RefiningSpain

A CoruñaRefinery(Spain)

7 Optimization of hot load feed tounits, optimization of unit designs,

operative improvements, fuelsubstitution

57,199

RefiningSpain

PuertollanoRefinery(Spain)

4 Thermal integration of processstreams, modifications to ovens,

reduction in preflash columnpressure in the crude unit, fuel

substitution

32,937

RefiningSpain

CartagenaRefinery(Spain)

5 Improvement in energy efficiency,improvements in heat exchanger

train insulation, optimization of unitdesign parameters, fuel substitution

113,019

RefiningSpain

TarragonaRefinery(Spain)

7 Reduction in flaring, heat recoverythrough exchangers, increase in load

flow temperature, modification ofthe diameter of exchange train linesin the crude unit, use of a heater to

preheat demineralized water,modifications to the fuel oil network

and burners, fuel substitution

96,207

RefiningSpain

Bilbao -PetronorRefinery(Spain)

6 Unit energy integration,technological updating of

equipment, optimization ofequipment processes and functions,

fuel substitution

122,447

ChemicalsEURM

SinesChemicalComplex

(Portugal)

2 Reduction in flaring, new exchangerto preheat naphtha in the ovens,

partial replacement of ovenconvection

15,917

RefiningPeru

La PampillaRefinery(Peru)

3 Reduction in flaring, emissionreduction in boilers, reduction in

steam consumption.

5,117

Download excel file

as many reduction measures as possible, weinvestigate offsetting the remaining emissions tomake our activity carbon neutral.

Repsol has initiated different offsetting activitiesduring 2012 to compensate for the climateimpacts of particular activities alongside emissionreduction projects. These include offsetting theemissions from the shareholders' Annual Meetingin May 2012, and those generated by the Repsolteam in the Road Racing World ChampionshipGrand Prix (Moto GP and Moto2) during the 2012season.

To be eligible for offsets, the carbon footprint of theevent or activity first needs to be calculated. To doso, we calculated the emissions associated withthe transport of people and materials to the event,stays in hotels, the functioning of the facility(mainly electricity consumption), and thegeneration, transport and processing of wastes,among others.

We used an independent entity to verify the dataand calculations, under the requirements of thePAS 2050:2011 international standard forevaluating life cycle GHG emissions.

Lastly, we implemented the offsets for both events.This involves the voluntary purchase of a quantityof carbon credits for a project in a developingcountry proportional to the tCO2e emitted by theevent. In the case of the shareholders' AnnualMeeting 2012, the 115 tCO2e emitted were offsetby a corresponding number of voluntary credits inthe La Venta II wind project in Mexico. Repsol hasparticipated in the funding of this project throughtheir involvement in the Spanish Carbon Fund,which is administered by the World Bank, andenjoys the participation of the Spanishgovernment and the top companies in our country.

Offsetting our emissions in the

Motorcycling World Championship

We offset the emissions from the

participation of the Repsol team at the 2012

Road Racing World Championship Grand

Prix.Read more

New channels for reducing emissions: Ecodesign

We recognize the environmental protectionrequirements in all the links of our products' valuechain. For that reason, we direct our efforts notonly to reducing the energy intensity of ourproduction processes and facilities, but also to thedesign of products that reduce the greenhouse gasemissions when used. This reduces ourcustomers' carbon footprint during thetransformation or use of the products we market.

Our Repsol Technology Center undertakesresearch, development and innovation to improveand continually reduce carbon intensitythroughout the value chain.

Green asphalts

The research strategy into asphalts is based on thedevelopment of eco-efficient processes andproducts, taking account of improvements not onlyduring the manufacturing phase but also duringtheir use. We aim at reducing CO2e emissionsduring road construction and road recycling,through a reduction in the consumption of fuelsand raw materials, and reducing the workingtemperature and the amount of smoke generated.

We have designed special asphalt-based emulsionsfor use in the total recycling of road pavements atlow temperatures. This is one of the mostsustainable options in the road industry, withcumulative advantages through lowerconsumption of natural resources and energy toproduce new road pavements, as it can be used atlower temperatures. Accordingly, it has been usedon a section of the Arlanzón highway, with asolution that allows the use of very highpercentages of recycled materials and lowtemperature technology, with high mechanical andfunctional specifications. This alternative could seta new trend in road pavement recycling.

Fuels

We systematically study the future energy needs ofindustry and society, to learn how newtechnologies may be of benefit. In the field ofengines and energy for transport, technologyprospecting is the starting point for developingnew products and adapting existing products, inorder to evolve, hand-in-hand with the automobileindustry, towards sustainable transport. During2012, we carried out a review of technologyprospecting survey in this area, covering the latesttrends both in conventional heat engines andelectric propulsion.

Lubricants

High energy efficient lubricating oils: Reducingfuel consumption in alternative internalcombustion engines, and consequent reduction inCO2e emissions to the atmosphere, is a priorityissue today.

Repsol has been developing low viscositylubricating oils (type SAE 5W-30) that limitmechanical losses, and which are formulatedusing the latest generation technologies. This candeliver appreciable fuel savings for end customers,and fewer GHG emissions.

Repsol has developed high energy efficiencylubricants, and piloted a test on a fleet of EMTbuses in Valencia in 2012. The pilot demonstrated

that the use of these types of products can reducefuel consumption, without negative effects on theuseful life of the engine and its maintenance.

Biodegradable lubricating oils: Work continues inthe search for new raw materials for theformulation of more environmentally friendly oilsto reduce the use of mineral bases for primarymanufacturing. We are also pursuing moreefficient additive technologies to improve productcharacteristics at lower doses, as well as productsthat contribute to fuel savings, reducing CO2eemissions to the atmosphere.

Group 3 Lubricant base oils To further ourresearch, development and innovation activities onlubricant base oils, construction began in 2012 ona new plant to generate Group 3 Lubricant baseoils in Cartagena, which will be operated bySKSOL, a joint venture between the Koreancompany SKL and Repsol, which has a 30% stake.

The European Union, regulates combustion gasemissions to restrict the pollution produced byroad vehicles, has introduced common demandsfor the emissions from motor vehicles and theirspecific spare parts. This has led to changes inlubricant formulations. The worldwide trend inreducing energy consumption and emissions isleading to a change in lubricant formulation, fromthe traditional mineral-based Group 1, to the newsynthetic-based Group 3. These morehydrogenated bases allow engines to functionoptimally with minimum consumption at anytemperature, reducing the engine fuelconsumption and consequently, the emissionsproduced.

(68) The reductions achieved by YPF have been included for 2006-2011.

(69) The business as usual scenario represents the level of emissions if a reduction project

hadn't been implemented.


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Biofuels

The Repsol New Energy Business Unit and itssubsidiary, Kuosol, have continued during 2012 tostudy comprehensive utilization of biomass fromagricultural energy crops, with the aim ofdeveloping oil and ethanol production projects,and electricity through cogeneration.

Our investee company AlgaEnergy has beenworking on biomass production from micro-algaein their pilot plant located in Barajas Airport, acollaborative agreement with AENA and Iberia.AlgaEnergy has started working on ademonstration plant located in Arcos de laFrontera, alongside the Iberdrola combined cycleplant, from which it will extract the CO2 that will beinjected into the micro-algae to improve theirgrowth. This plant forms part of a Life+ projectfunded by the European Commission. We are alsoimplementing a pilot plant in our Tarragonaindustrial complex to scale up micro-algaecultivation processes that make use of the complexeffluents, such as CO2 emissions and waste watersas nutrients, which improves both the economicand environmental outcomes.

A bioprocess company: NEOL

Neol Biosolutions is a company that was

founded in June 2012, as an equal joint

venture between Repsol New Energies S.A.

and the Bioindustrial division of Neuron Bio.

Their facilities are in the Parque Tecnológico

de la Salud in Granada, including the latest

generation biotechnology equipment and a

pilot plant to demonstrate their new

technologies.

Carbon strategy

Non-fossil energy initiatives

Repsol New Energies helps to position us as a global energycompany committed to sustainable development throughprofitable new energy sources. There are three areas of action:bioenergy, renewable generation and energy ventures.

Read more

We manufacture advanced biofuels in ourindustrial complexes in the same way ashydrogenated vegetable oils (HVO), albeitcoprocessed with crude oil. There are technicaladvantages to HVO over traditional biodiesel (fattyacid methyl esters FAME), in that it can be addedin larger proportions in commercial blends, and iscompletely compatible with any vehicle; it alsocomplements FAME in meeting the objectives ofincorporating renewable components inautomotive fuels. Industrial trials were carried outin 2009 and 2010, with hydrobiodiesel achievingrecognition as a biofuel by the government.

During 2012, we evaluated and characterized theoils used in the production of this biofuel, and alsostudied and analyzed the production process,identifying problems and looking for solutions toachieve continuous manufacture of hydrobiodiesel.

Through these activities, in 2012 Repsolco-processed 1000 tons of raw soya oil, and 17,000tons of refined palm oil in the A Coruña andCartagena refineries, producing 18 million liters ofhydrobiodiesel (enough to circle the globe 25times in a diesel vehicle).

Also in 2012 the European Renewable EnergiesDirective 2009/28/CE came into force, whichrequires biofuels to fulfill a series of sustainabilitycriteria. Repsol was the first Spanish operator in2012 to have certified all its refineries under theISCC voluntary sustainability scheme, approved bythe EC.

Transport electrification

Repsol New Energies, via IBIL, works to promoteelectric mobility, aimed at combating climatechange through emission free transport. Toachieve that, they provide a comprehensiverecharging service using 100% renewable energy,smart facilities and terminals, and a control centerfor the infrastructure.

IBIL is the first recharging operator for electricvehicles registered with the National EnergyCommission that provides private rechargingservices (in residential and company garages), aswell as public (in public car parks, park and ride,shopping centers, public roads and servicestations).

IBIL has installed 339 recharging points (109 in2011 and 230 in 2012) and has seven commercialoffices in operation in Madrid, Barcelona, ACoruña, Valladolid, Seville, Palma de Mallorca andBilbao. They have also installed the first rechargingpoints in areas of high public traffic in 2012, aswell as the first rapid recharging point in aCampsaRed service station in Vitoria.

Our electric mobility initiative has been selected asa Clima Project. These are projects promoted viaFES-CO2 designed to transform the Spanishproduction system towards a low carbon model,and to achieve GHG emission reductions amongsectors not subject to the European EmissionsTrading Scheme. The Ministry for Agriculture,Food and the Environment seeks to promote theseprojects by purchasing their emission reductionsto ensure their economic viability.

Renewable electricity generation 70

Repsol New Energies UK continues to developthree major offshore wind energy projects at InchCape, Moray Firth and Beatrice.

Repsol New Energies has a 51% share in the InchCape project through a joint venture with EDPRenewables. As an operator, we are leading thedevelopment of this project, and have reachedconsent agreements with the towns of Carnoustie,Anstruther, St Andrews and Leuchars. Anagreement has also been signed for a connectionto the grid. We have completed the environmentalbaseline studies, and the environmental statementhas already been published.

Moray Offshore Renewables Ltd, the Scottishcompany with investment from EDPR (67%) andRepsol New Energies UK Ltd (33%), haspresented a consent application for thedevelopment of a marine wind farm in the outerMoray Firth. The application to Marine Scotlandcovers three development areas: Telford,Stevenson and McColl, all in the outer Moray Firth,22 km from the Caithness coast.

The proposed farm (including the threedevelopment areas) would have a total installedcapacity of 1500 MW, generated by between 189and 339 turbines, based on the capacity of theinstalled turbines and the number of phasesincluded in the construction. The total area isestimated to cover 295 km2.

This milestone is the culmination of three years ofdevelopment, engineering and exhaustiveenvironmental studies, and a wide-rangingconsultation process has collected all theinformation required for the consent application.Also, the detailed engineering phase, theequipment and supply management plan and thedevelopment of the funding scheme have begun,in order to allow us to make a final decision oninvestment from 2016 onwards.

Repsol New Energies has a 25% stake in ProjectBeatrice through a joint venture with SSERenewables. All the environmental and technicalstudies of pre-consent phase have been completedand the application was submitted in early 2012.The project has been granted Planning Permissionin Principle by Moray Council's Planning and

Regulatory Services Committee to connect theoffshore wind farm to the electric grid.

In December 2012, Repsol New Energies UKsponsored the Public Initiative Award at theScottish Green Energy Awards.

Through their subsidiary Orisol, in 2012 Repsolcontinued to promote, develop and operate windand photovoltaic solar farms in both Europe andthe United States.

Additionally, Repsol New Energies via Repsol NewEnergy Ventures, the unit specializing in corporateventure capital (CVC), has acquired an 18% stakein Tocardo International, a leading Dutch companyin the manufacture of high technology turbines forelectricity production in rivers, using their kineticenergy, or bridges, floodgates and dams.

The capital investment in Tocardo will meanRepsol can develop renewable generation projectsusing tidal and river flows.

In 2012, Repsol New Energy Ventures alsoacquired a 31% stake in WindPlus, the firstcompany in the world able to design, install andoperate the first floating semi-submergedstructure for offshore wind generation. At present,the 2.0 MW Vestas turbine has generated over 3.5GWh of electrical energy.

During 2012, out of 23 submitted projects,Windplus obtained NER 300 funding from theEuropean Commission, to design, install andoperate five floating platforms for five windturbines, adding up to a total power of 27 MW.

Agreements with Spanish institutions

In 2012 Repsol New Energies and InvierteEconomía Sostenible signed a commitment for ajoint investment of €21 million in sustainableinitiatives71.

The Repsol initiative materialized in aco-investment contract between Repsol NewEnergy Ventures, S.A. and Invierte EconomíaSostenible, S.C.R.

A commitment was established within the contractto undertake co-investments over the next fiveyears in Spanish SMEs that develop innovativetechnological initiatives in the biotechnology,renewable generation, electric mobility, energystorage and energy efficiency sectors.

(70) Through the acquisition of shares, Repsol currently owns 334 MW of renewable

electricity generation capacity corresponding to wind, small-scale hydro and co-generation

from our shares in Gas Natural Fenosa, which produced 816 GWh of electrical energy in

2012.

(71) Repsol contributes €12 million to this commitment.


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Corporate Responsibility · Our challenges · Carbon strategy · Our results

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Carbonstrategy


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Non-fossilenergy

Ourresults

Greenhouse gas emissions

Our direct emissions 74 of CO2e increased by 8%compared to 2011, mainly due to increased activityin refining operations in Spain through theexpansions of the Cartagena and Petronorrefineries, which have been in operationthroughout the year.

There has also been a 10% increase in CH4,emissions, mainly due to the implementation ofthe new gas processing plant in the Margarita fieldin Bolivia.

As in 2011, we included emissions of CH4 from allour facilities in our direct CO2e emissionsmeasurement, as well as the N2O emissionsverified according to the ISO 14064 standard,which arise from the refining business.

Direct CO2e emissions Direct CO2e emissions byactivity

The indirect emissions of greenhouse gases are aconsequence of the company's activity, but comefrom sources that are owned or controlled by thirdparties. In 2012, these emissions were 0.81 milliontCO2e from purchased electricity or steam and0.76 million tCO2e from the manufacture andtransport of hydrogen.

Greenhouse gases emissions from our

Carbon strategy

Our results72 73

activities

CO2e emissions fromexploration andproduction75

CO2e emissions from

refining76 77

Emissions from the fuels we market

During 2012, emissions from our customers' useof the fuels we market increased to 117 millionmetric tons of CO2 78.

Emissions from the fuelswe market

Trends in greenhouse gas inventoryverification

We have continued working to improve the qualityof our inventories of greenhouse gases, extendingcoverage to an increasing number of activitieswithin Repsol.

Currently, over 90% of the company's directemissions inventory has been verified according tothe ISO 14064 international standard.

Trends in greenhouse gas

inventory verification

Trends in flared gas

The company has made progress in ourcommitment to reduce CO2e emissions associatedwith flared gas, through projects that haveprevented the burning of over 100,000 metric tonsof waste gases through flaring.

Trends in flared gas

Energy consumption

In energy terms, Repsol's total 2012 consumptionincreased slightly due to the startup of newrefinery units in Spain (Cartagena and Petronor).Thanks to energy efficiency measures and the fuelsubstitution, this increase has remainedmoderate, despite the greater complexity of thenew production schemes. All the other businessunits have worked to implement reduction actionsin line with previous years.

Of the company's total energy consumption, 94%is direct and 6% indirect (due to the purchase ofelectricity or steam from third parties).

Energy consumption Energy consumption byactivity

Distribution of biodiesel and bioethanol79 80

Repsol promotes a balanced market for obtainingand processing raw materials for biofuelproduction and takes the measures necessary tomitigate risks to our supply chain. The EuropeanRenewable Energy Directive (RED) definessustainability criteria for biofuels, to protect landwith high biodiversity value or high carbonreserves. In Spain, Royal Decree 1597/2011 ofNovember 4, 2011, establishes sustainabilitycriteria and the national sustainability verificationsystem, which comes into force on January 1,2014.

The National Energy Commission (CNE) leads thespecification of the operational aspects needed toensure compliance with the Royal Decree. Repsolis an active participant in the working group set upfor this purpose. The European Directive delegatesto the Commission the responsibility to study anddevelop proposals and methodologies to measureemissions from carbon stock changes caused byindirect land use changes. Accordingly, theEuropean Council and Parliament have beenstudying this effect during the last two years. InOctober 2012, the Commission publishedproposed amendments to RED and the FuelQuality Directive (FQD) to:

Limit the use of BIOS of agricultural origin to5%

Some ILUC factors are defined in accordancewith the type or family of raw materials. Thesefactors do not apply when calculating objectivecompliance, only a report of the EMs isrequested.

Encourage further the use of BIOS originatingfrom algae, wastes and certain other rawmaterials.

In our biofuel development and productionprojects, we hold to strict sustainability criteria. In2012, we met our mandatory minimum annualtargets for biofuel sales and/or use in transport inall our countries of operation. In 2012 in Spain, wedistributed 559,000 tons of biodiesel, 137,000 tonsof bioethanol and approximately 263,640 tons of

hydrogenated vegetable oil.

Distribution of biodiesel Distribution of bioethanol

(72) For further information on the scope of the data in this chapter, see section "Scope of

the Report" in chapter "About this report"

(73 To facilitate data comparison over time, the previous year's data has been adjusted in

line with changes in the company's asset structure. For further information, see the section

on Our Data.

(74) Data from 2011 and 2012 include N2O emissions verified according to the ISO 14064

international standard.

(75) Data calculations based on CO2e from direct emissions and indirect CO2 emissions

associated with the purchasing of electricity and steam.

(76) Data calculated based on CO2e from direct emissions (the 2011 and 2012 data

include N2O emissions verified under the ISO 14064 international standard) and the

indirect CO2 emissions associated with the purchase of electricity and steam.

(77) The criteria have changed for the calculation of the refining emissions indicator, and

the total processed raw materials is now taken into account, and not just the processed

crude.

(78) Data calculated based on API methodology (American Petroleum Institute): The

Institute's Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Gas

Industry.

(79) Includes data from Spain, Peru, Italy and Portugal. The 2010 data has been corrected

for the sales of assets in Brazil.

(80) Includes data from Spain and Peru.


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