British energy giant bp and Spanish utility Iberdrola have officially approved the construction of Spain’s largest green hydrogen plant. The 25 megawatt (MW) facility, set to be operational by the latter half of 2026, will be located at bp’s Castellón refinery. This marks the first collaborative hydrogen initiative by the two companies through their joint venture, Castellón Green Hydrogen S.L., which is equally owned by bp and Iberdrola.

The project, which will receive a €15 million boost from the Innovative Value Chain and Renewable Hydrogen Knowledge call of Spain’s Recovery, Transformation, and Resilience Plan, is also supported by NextGenerationEU funds from the European Union. This financial backing underscores the project’s significance in advancing Spain’s green hydrogen capabilities.

A Major Milestone for Green Hydrogen

bp’s senior vice president of hydrogen and carbon capture and storage, Felipe Arbelaez, emphasized the importance of this venture. “bp’s first investment decision for an industrial scale project is an important step forward for our hydrogen business. We are focused on value, progressing only the best projects in our portfolio that can create additional value through integration and fully meet our investment hurdles,” Arbelaez stated. He added that the Castellón refinery is poised to lead the transition towards a more sustainable energy future.

Millán Garcia-Tola, Global Director of Hydrogen at Iberdrola, highlighted the strategic importance of this collaboration. “This partnership with bp is another step in Iberdrola’s firm commitment to green hydrogen as a key element in industrial decarbonisation,” said Garcia-Tola. The plant will convert 200 gigawatt-hours (GWh) per year of Iberdrola’s renewable energy into green hydrogen, significantly contributing to bp’s decarbonisation efforts.

Iberdrola will apply its extensive experience with green hydrogen plants to ensure the project’s success. Olvido Moraleda, President of bp Energía España, reflected on the broader impact, “This project marks a milestone in our strategy and reflects the importance of collaboration with both companies and the public sector. We aim to transform our Castellón infrastructure and strengthen the economic and industrial capacity of the Valencia region.”

Technological and Economic Impact

The green hydrogen plant will feature a 25 MW electrolyzer powered by renewable electricity sourced through a power purchase agreement (PPA) with Iberdrola. This agreement guarantees 200 GWh/year from Iberdrola’s photovoltaic and wind projects. The electrolyzer will use five 5 MW containerized proton exchange membrane (PEM) technology modules provided by Plug Power.

The green hydrogen produced will adhere to European standards for Renewable Fuels of Non-Biological Origin (RFNBO). The plant is expected to produce approximately 2,800 tonnes of green hydrogen annually, replacing a portion of the grey hydrogen currently used at the refinery. This shift is anticipated to prevent the emission of around 23,000 tonnes of CO2 annually, equivalent to the emissions of 5,000 cars.

Construction of the plant is projected to create up to 500 new direct jobs. Additionally, the green hydrogen produced could be used in various hard-to-abate industries in the Valencia region, including ceramics, chemical industries, and heavy transport.

Future Prospects and Regional Impact

bp is already exploring opportunities to expand the plant’s capacity in future phases. The recent signing of a letter of intent with the Valencian Government further solidifies the region’s role as a leader in energy transition, with a joint working committee established to oversee the transformation of the Castellón refinery.

Iberdrola has also strengthened its commitment to decarbonisation through new partnerships and joint ventures, including initiatives to enhance electric mobility and expand renewable energy capabilities in Spain, Portugal, and Brazil.

  BP, Castellón refinery, Energy Transition, European Union, green hydrogen, Iberdrola, NextGenerationEU, Plug Power, renewable energy, Spain