bp and Iberdrola España have announced the commencement of construction on Spain's largest green hydrogen plant, a 25MW project located adjacent to bp's refinery in Castellón in eastern Spain. The project, a joint venture between the two energy giants, is expected to create up to 500 jobs during the construction phase and involve approximately 25 Spanish companies.

The construction process will unfold in several phases. Currently, earthworks are underway on a 20,000 m2 plot of land adjacent to the bp refinery. Civil engineering works are slated to begin in the second quarter of this year. A critical milestone will be the arrival and installation of the electrolysers in the second half of 2025. These devices will use renewable electricity to split water molecules into hydrogen and oxygen, producing green hydrogen.

The €70 million project is being developed through Castellón Green Hydrogen S.L., a company jointly owned by bp and Iberdrola España. The plant is expected to be operational in the second half of 2026. The 25 MW electrolyser will be powered by renewable electricity supplied by Iberdrola through a power purchase agreement (PPA) from its wind and solar farms.

The project has received €15 million in funding from the Spanish Recovery, Transformation and Resilience Plan, supported by NextGenerationEU funds.

The plant's projected annual green hydrogen production of 2,800 tonnes will initially replace grey hydrogen used in the refinery's processes, thus avoiding approximately 23,000 tonnes of CO2 emissions annually – equivalent to the emissions of 5,000 cars. Future phases of the project envision expanding the use of green hydrogen to other hard-to-decarbonize industries in the Valencian Community, such as ceramics, chemicals, and heavy transport, replacing natural gas.

"The start of construction of the largest green hydrogen plant in Spain is great news, because it allows us to see tangible progress in an important industrial decarbonisation project," said Carolina Mesa, bp's vice president of hydrogen for Spain and new markets. "The bp refinery in Castellón consolidates itself as a model for the transformation of refineries into integrated energy hubs.”

Jorge Palomar Herrero, Director of Hydrogen Development at Iberdrola, emphasized the project's positive impact on the Spanish economy. "This project is already enabling the real development of the hydrogen value chain in our country with key equipment manufactured in Spain and contracting more than 25 local companies," he stated. "The project also brings in 200 GWh/year of renewable energy from Iberdrola's wind and photovoltaic plants in Spain and meets all EU requirements to ensure that the hydrogen produced is green hydrogen."