bp and Iberdrola España have reached a major milestone by announcing the final investment decision to develop Spain’s largest green hydrogen plant. This 25 MW green hydrogen facility, a joint venture between bp and Iberdrola through Castellón Green Hydrogen S.L., will be located at bp’s Castellón refinery and is set to become operational by the second half of 2026. The plant is expected to produce enough green hydrogen to reduce CO2 emissions by 23,000 tons per year, equivalent to taking 5,000 cars off the road annually.
This ambitious project aims to decarbonize bp’s refinery operations, serving as a cornerstone in bp’s transformation of the Castellón facility into an integrated energy hub. The joint venture will leverage renewable energy sourced through a power purchase agreement (PPA) with Iberdrola, using 200 GWh per year from the company’s photovoltaic and wind projects to power the electrolyzer. The electrolyzer, featuring Plug Power’s advanced PEM technology, will convert water into approximately 2,800 tons of green hydrogen annually, replacing the grey hydrogen currently produced from natural gas.
“This is a significant step for our hydrogen business and bp’s first industrial-scale green hydrogen project,” said Felipe Arbelaez, Senior Vice President of Hydrogen & CCS at bp. “By collaborating with Iberdrola, we’re advancing a new energy source that will play a key role in decarbonizing industries like refining, where Castellón is leading the way.”
The project has secured €15 million in funding from the Spanish Recovery, Transformation, and Resilience Plan, with additional support from NextGenerationEU. During construction, the plant is expected to create up to 500 direct jobs, boosting both local employment and the region’s industrial capacity.
Iberdrola’s Global Director of Hydrogen, Millán Garcia-Tola, emphasized the collaboration’s importance: “This partnership with bp reinforces our commitment to green hydrogen as a key driver for industrial decarbonization. Our project will convert 200 GWh of renewable energy annually into green hydrogen, supporting bp’s strategy and exemplifying the strength of collaboration in the energy transition.”
As part of the project’s future phases, bp and Iberdrola are exploring opportunities to increase capacity, allowing the green hydrogen to be used across other hard-to-abate industries in the Valencia region, such as ceramics, chemicals, and heavy transport. These expansions will further enhance Spain’s position as a leader in green hydrogen production and the broader energy transition.
The project underscores the strategic importance of public-private partnerships in advancing renewable energy solutions. As Mario Ruiz-Tagle, CEO of Iberdrola España, remarked, “With the collaboration of committed partners and appropriate incentives, projects like Castellón are driving a new industrial model based on the green hydrogen value chain, contributing to Spain’s role as a leader in the energy transition.”
This landmark project not only solidifies Spain’s green hydrogen future but also marks a critical step in the decarbonization of Europe’s industrial sector.
