BP and Iberdrola have approved the construction of a 25 MW green hydrogen plant at BP’s Castellón refinery. This initiative marks the first hydrogen project jointly undertaken by the two companies through their Castellón Green Hydrogen S.L. joint venture.
The plant is set to be operational by the second half of 2026. The project was officially announced at an event celebrating the final investment decision made in July 2024.
The project, which involves the Technology Institute of Energy (ITE), has secured €15 million in funding from the Innovative Value Chain and Renewable Hydrogen Knowledge call of Spain’s Recovery, Transformation, and Resilience Plan, with support from NextGenerationEU.
Millán Garcia-Tola, Global Director of Hydrogen at Iberdrola, commented, “This partnership with BP represents another step in Iberdrola’s commitment to advancing green hydrogen as a key element of industrial decarbonisation. The plant will convert 200 GWh/year of Iberdrola’s renewable energy into green hydrogen, supporting BP’s decarbonisation strategy. It exemplifies the successful collaboration between our companies and our shared long-term commitment to decarbonisation.”
The 25 MW electrolyser will be powered by renewable electricity through a power purchase agreement (PPA) with Iberdrola, which will provide 200 GWh/year from its photovoltaic and wind projects. The electrolyser will feature five 5 MW modules using proton exchange membrane (PEM) technology, supplied by Plug Power. The green hydrogen produced will meet European standards for renewable fuels and will help transition BP’s Castellón refinery into an integrated energy hub.
The plant is expected to produce around 2,800 tons of green hydrogen annually, potentially replacing some of the grey hydrogen currently used at the refinery. This shift could reduce CO2 emissions by 23,000 tons per year, equivalent to the emissions of 5,000 cars. The project is also anticipated to create up to 500 direct jobs during construction.
Mario Ruiz-Tagle, CEO of Iberdrola Spain, said, “This project exemplifies our strategic alliance with BP and our commitment to leading the green hydrogen sector in the Valencian region. With the right incentives and collaboration, we can develop a new industrial model based on green hydrogen, creating quality jobs and positioning Spain as a leader in this sector.”
In addition to the initial 25 MW project, BP is exploring opportunities to expand capacity in future phases. The green hydrogen produced may also support key industries in the Valencia region, such as ceramics, chemicals, and heavy transport.
The announcement follows BP’s recent letter of intent with the Valencian Government to bolster the region’s role in the energy transition. This collaboration will establish a joint working committee to oversee the transformation of BP’s Castellón refinery into an integrated energy hub.
Recently, Iberdrola has formed several long-term partnerships to drive economic decarbonisation. Beyond its joint venture with BP, Iberdrola has entered agreements with Norges Bank Investment Management, Masdar, Mapfre, Energy Infrastructure Partners, and GIC to advance renewable energy and expand transmission networks in Brazil.