The explosion occurred on Thursday afternoon at a biodiesel production facility in the municipality of Calahorra in La Rioja in northern Spain.
Two employees at the facility died.
About 20 employees were able to be evacuated and should have survived without injuries, reports the newspaper La Rioja.
250 children who were out on an excursion to an amusement park nearby had to be evacuated, the newspaper reports.
A large area around the facility was cordoned off due to the risk of more explosions, several local media reports.
Pictures from the site show how thick black smoke rises towards the sky after the explosion, but the fire was under control at 2.30 pm according to local authorities.
The extinguishing work is expected to continue during the evening.
What caused the explosion is still unclear, writes AP.