BP and Iberdrola begin construction of Spain’s largest hydrogen plant in Castellón

BP and Iberdrola begin construction of Spain’s largest hydrogen plant in Castellón

• More than 70 million will be invested in this initial plant next to the refinery
• The 25 MW facility is expected to be operational in the second half of 2026 
• BP plans to create a hub for this energy with an investment of 2 billion

The ambitious project to transform the BP refinery in Castellón into a major green hydrogen and biofuels hub has begun. Castellón Green Hydrogen, the company formed by BP and Iberdrola to promote a plant with an initial capacity of 25 MW, has already started work on the site.

According to its promoters, this is the largest green hydrogen project in Spain and could create up to 500 jobs during its construction , in which approximately 25 Spanish companies are expected to be part of it.

The project in Castellón for this initial plant represents an investment of more than 70 million euros , developed jointly by bp and Iberdrola Spain . The plant is expected to be operational in the second half of 2026.

This installation is just the first phase of BP’s ambitious plans for its Spanish refinery, as the energy multinational estimates that it could invest more than 2 billion euros to turn Castellón into one of its major green hydrogen hubs in Europe with subsequent capacity expansions.

The first phase of the works on this plant has already begun, which consists of earthmoving and preparing a plot of land measuring approximately 20,000 square metres located next to the BP refinery in Castellón . Civil works will begin in the second quarter of the year.

How it will work

The next milestone of the project will be the reception and installation of the first major equipment, including the electrolysers, which is expected to take place in the second half of 2025. This equipment is what allows green hydrogen to be produced through a chemical process (electrolysis) capable of separating the hydrogen and oxygen molecules that make up water using electricity from renewable sources.

Once completed, the planned 25 MW electrolyser will be powered by renewable electricity through a power purchase agreement (PPA) supplied by Iberdrola from photovoltaic and wind farms . The plant’s production will reach 2,800 tonnes of green hydrogen per year , which will be used to replace part of the grey hydrogen currently used by the BP refinery in its processes. This will avoid the emission of approximately 23,000 tonnes of CO2 per year, equivalent to the emissions of 5,000 cars in the same period.

In later phases of the project, the green hydrogen produced could also be used in key industries in the Valencian Community that are difficult to decarbonise, such as the ceramics sector, replacing the natural gas used in their processes, in the chemical industry and in heavy transport. In fact, BP’s intention is that once its capacity has been multiplied, it can export this energy to central Europe with the H2Med project.

Perte Funds

This initiative, which has the participation of the Technological Institute of Energy (ITE), has obtained equivalent funding of 15 million euros from the aid programs for the Innovative Value Chain and Knowledge in Renewable Hydrogen of the Spanish Recovery, Transformation and Resilience Plan , with funds that will be allocated by NextGenerationEU of the European Union.

The companies have recently awarded the contract for the manufacture and supply of the transformer to the Spanish company Imefy. Based in Toledo, the company from La Mancha will manufacture, supply and supervise the assembly and commissioning of the three-phase power transformer, with a power of 37 megavolt-amperes (MVA) and a transformation ratio of 66/30 kilovolts (kV), and it will be supplied in the first quarter of 2026.

Carolina Mesa, bp’s vice president for hydrogen for Spain and new markets, said:

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. The bp refinery in Castellón is consolidated, as well as a model for the transformation of refineries into integrated energy hubs.

Jorge Palomar Herrero, director of Hydrogen Development at Iberdrola, said:

This project is already enabling the real development of the hydrogen value chain in our country with key equipment manufactured in Spain and providing work for more than 25 local companies.

“The project also generates 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.”

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BP and Iberdrola begin construction of Spain’s largest hydrogen plant in Castellón, source

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