BP & Iberdrola Lead the Charge in Spain’s Largest Green Hydrogen Revolution!
The joint venture between bp and Iberdrola España has marked a significant milestone by commencing the construction of Spain’s largest green hydrogen project, featuring a 25 MW electrolyzer. This initiative is expected to generate up to 500 jobs during construction, with approximately 25 Spanish companies playing a role in its execution. The project highlights Spain’s commitment to renewable energy and solidifies its position as a leader in the global hydrogen economy.
Project Phases and Construction Timeline
The initial phase involves earthworks and the preparation of a 20,000 m² plot adjacent to the bp refinery in Castellón. These preparatory works lay the groundwork for the main construction activities, which are set to begin in the second quarter of the year. This marks a crucial step toward the realization of a large-scale hydrogen production facility that integrates seamlessly with existing industrial operations.
A major milestone will be the reception and installation of key equipment, including electrolysers, in the second half of 2025. These electrolysers will employ the process of electrolysis, which separates hydrogen and oxygen molecules in water using electricity generated from renewable sources. This ensures the production of truly green hydrogen, aligning with global sustainability goals.
Leadership Statements and Strategic Vision
Carolina Mesa, bp’s Vice President of Hydrogen for Spain and New Markets, emphasized the significance of the project, stating, “The start of construction of the largest green hydrogen plant in Spain is great news, as it signifies tangible progress in industrial decarbonization. The bp refinery in Castellón is evolving into a model for transforming refineries into integrated energy hubs.”
Jorge Palomar Herrero, Iberdrola’s Director of Hydrogen Development, echoed this sentiment: “This project is already contributing to the development of Spain’s hydrogen value chain, with key equipment manufactured domestically and over 25 local companies involved. It also integrates 200 GWh/year of renewable energy from Iberdrola’s wind and solar farms, ensuring compliance with EU green hydrogen standards.”
Investment, Technology, and Environmental Impact
The project, with an investment exceeding €70 million, is spearheaded by Castellón Green Hydrogen S.L., a joint entity formed by bp and Iberdrola España. Once operational in the latter half of 2026, it will significantly contribute to Spain’s decarbonization efforts.
A 25 MW electrolyzer will be powered through a power purchase agreement (PPA) with Iberdrola, utilizing clean energy from wind and photovoltaic sources. This facility aims to produce 2,800 tonnes of green hydrogen annually, replacing a portion of the grey hydrogen currently used at the refinery. As a result, it is expected to reduce CO₂ emissions by approximately 23,000 tonnes per year—the equivalent of emissions from 5,000 cars.
Beyond refining, the green hydrogen produced will eventually serve hard-to-decarbonize sectors in the Valencian Community, including ceramics, chemicals, and heavy transport. These industries, which traditionally rely on fossil fuels, stand to benefit significantly from this transition.
European Funding and Technological Innovation
This ambitious initiative has secured €15 million in funding through Spain’s Innovative Value Chain and Renewable Hydrogen Knowledge support programs, part of the broader Spanish Recovery, Transformation, and Resilience Plan. These funds, allocated by the European Union’s NextGenerationEU initiative, will help accelerate Spain’s green hydrogen sector, fostering economic and industrial growth.
The Instituto Tecnológico de la Energía (ITE) is playing a key role in supporting the project through research and innovation, ensuring that technological advancements enhance efficiency and reliability.
Commitment to Spanish Industry and Local Development
bp and Iberdrola have demonstrated a strong commitment to Spanish companies, awarding contracts to local firms such as Imefy, a transformer manufacturer based in Toledo. Imefy will supply and oversee the installation of a three-phase power transformer with a capacity of 37 megavolt amperes (MVA) and a transformation ratio of 66/30 kilovolts (kV). Delivery is expected in the first quarter of 2026.
By prioritizing Spanish suppliers, the project is strengthening the national renewable hydrogen value chain, fostering local innovation, and generating industrial opportunities in a rapidly growing market.
Green Hydrogen’s Role in Decarbonization and Energy Security
The announcement of this project reaffirms bp and Iberdrola’s leadership in hydrogen innovation. Green hydrogen is widely regarded as a crucial energy carrier for industrial decarbonization, offering a sustainable alternative to fossil fuels. This initiative aligns with Spain’s broader energy strategy, which aims to achieve net-zero emissions while enhancing energy security.
Additionally, bp and Iberdrola continue to expand their partnership beyond hydrogen, working together to accelerate electric mobility solutions and establish high-power public charging networks in Spain and Portugal. These initiatives reflect a comprehensive approach to sustainable energy transitions, positioning both companies at the forefront of Europe’s clean energy transformation.
Future Prospects and Industry-Wide Implications
As the project progresses, it is expected to set a precedent for future hydrogen developments in Spain and beyond. By integrating large-scale hydrogen production with existing industrial processes, the Castellón Green Hydrogen Plant could serve as a blueprint for similar initiatives across Europe. BP & Iberdrola the expansion of green hydrogen applications in refining, manufacturing, and heavy transport sectors could accelerate the broader adoption of this technology. As economies worldwide seek to reduce carbon emissions, projects like this highlight the potential of hydrogen in enabling a cleaner, more resilient energy system.
With strong government support, collaboration between leading energy firms, and significant investment in local industry, Spain is positioning itself as a global leader in the green hydrogen revolution. The successful execution of this project will not only contribute to national climate goals but also enhance the country’s competitiveness in the emerging hydrogen economy.
