Initially, they planned to spend 1 billion euros. A Cepsa spokesperson said the extra money would fund infrastructure work at the nearby port of Huelva.
In all Cepsa, owned by Abu Dhabi fund Mubadala [RIC:RIC:MUDEV.UL] and the Carlyle Group (CG.O), opens new tab, is investing up to 8 billion euros to shift to low carbon energy.
The construction of the plant marks "the first major milestone" of the company's strategy, Chief Executive Maarten Wetselaar said.
Located in the southern Spanish region of Andalusia, the plant will use organic waste, such as used cooking oils, and contribute to the oil company's goal of producing 2.5 million tons of biofuels, of which 800,000 tons will be SAF, by the end of the decade.
Biofuels are seen as essential in decarbonising transportation, such as aviation, which is hard to electrify.
