Life after coal: the renaissance of Bilbao

By Matt Finch, business and energy analyst

Bilbao is an ancient city in Spain, dating from the 14th century. It has always been a major trading post and for most of the 20th century it was known for its iron, steel, and shipbuilding industries. The raw energy to fuel these industries came from coal. Whilst the coal was not directly mined in the area, the port of Bilbao was heavily rebuilt to unload coal, and railroads were laid to take this directly to the iron and steel factories.

As a result, Bilbao was very reliant on these heavy industries. When these industries in Bilbao went into decline (for a number of reasons, including the oil shock in 1973 and a major flood in 1983), the city was hit hard. Around 60,000 manufacturing jobs were lost between 1975 and 1995, with a further knock-on effect to the local services industry.

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Old Bilbao shipyard (photo: Teresa Avellanos, Flickr Creative Commons Licence)

To turn itself around, the ‘Strategic Plan for the Revitalisation of Metropolitan Bilbao’ was agreed between various political leaders, including the city mayor, and launched in 1991. This plan was deliberately not aimed at an individual segment of the city’s population or industry sector. Instead, the plan sought to renovate the look and feel of the city, whilst transforming the city from an industrial centre into a knowledge and services centre. Two agencies were launched: Bilbao Metrópoli-30, and Bilbao Ría 2000. Both agencies are owned by the Basque and Spanish governments, but are wholly independent from them. This setup was partly to ensure that decisions should be taken for the long-term.

Perhaps the most striking symbol of rehabilitation is the landmark Guggenheim Museum. Since it opened in 1997, it has been calculated that the museum has attracted an average of 700,000 extra non-Basque visitors to Bilbao per year. Where the museum is sited is as a direct result of Bilbao Ria 2000’s planning.

Despite some local opposition to the museum, the political leaders of the time decided to go ahead with the plan. They saw the museum as a central tourist attraction and symbol of the long-term rehabilitation of the city, and their long term planning proved to be a winning strategy. 

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The Guggenheim museum in Bilbao (Photo: Flickr/Thierry llansades, Creative Commons Licence)

Both Bilbao and Leipzig themselves, and the transitions described thus far, share similar characteristics. Both cities preceded the industrial age, and so have reinvented themselves a number of times out of necessity. Whilst coal came to be a major part of city life in both cities, there were other industries which could be leant back on. Both cities also suffered a ‘shock’ (German reunification and the 1983 flood) that forced them to think about the future. That thinking led to long-term strategic decisions.

Both cities also benefitted from access to finance. Bilbao could directly raise and spend taxes, whilst Leipzig benefitted from ‘Aufbau Ost’, the set of government policies that were applied to post-reunification East Germany. Finally, both cities recognised that their future was in a more service / knowledge based economy, and put in place long-term policies to achieve that goal.

These two examples prove that, handled well, transitions can be positive. It’s clear that there are lessons to be learned. The Coal Transitions project is currently taking an in depth look at historical transitions in the UK, US, Spain, Czech Republic, Poland and the Netherlands, with a view to promoting knowledge and understanding of positive transition policies.

(Edited by Germana Canzi)