bp and Iberdrola have giventhe green light for construction of a 25 MW green hydrogen project at bp’s Castellón refinery which is expected to be operational in second half of 2026. The plant will convert 200 GWh/yr of Iberdrola’s renewable energy into green hydrogen that will contribute to bp’s decarbonization strategy.

This is the first hydrogen project jointly undertaken by bp and Iberdrola through Castellón Green Hydrogen S.L., a joint venture equally owned by both companies. This initiative, which includes the participation of the Technology Institute of Energy (ITE), has been awarded funding of €15 million from the Innovative Value Chain and Renewable Hydrogen Knowledge call of the Spanish Recovery, Transformation, and Resilience Plan, with funding allocated by NextGenerationEU of the European Union.

bp’s first investment decision for an industrial scale project is an important step forward for our hydrogen business. We are focused on value, progressing only the best projects in our portfolio that can create additional value through integration and fully meet our investment hurdles. This also demonstrates the strength of partners combining their strengths to advance a nascent energy source that has the potential to play meaningful role in decarbonising industry. Castellón refinery can lead the way with its transformation.

—Felipe Arbelaez, bp’s senior vice president, hydrogen & CCS

The 25 MW electrolyzer will be powered by renewable electricity through a power purchase agreement (PPA) signed with Iberdrola that will supply 200GWh/year coming from Iberdrola’s photovoltaic and wind projects. The electrolyzer will include 5 modules of 5 MW containerized proton exchange membrane (PEM) technology, which will be supplied by Plug Power, a leading manufacturer of green hydrogen solutions.

The green hydrogen produced by the electrolysis of water powered by renewable electricity will comply with European requirements to produce green hydrogen (Renewable Fuels of Non-Biological Origin, RFNBO) and will support the transition of bp’s Castellón refinery into an integrated energy hub. The expected around 2,800 annual tons of green hydrogen could substitute part of the grey hydrogen currently used by the refinery—currently produced from natural gas—and as such is expected to result in avoiding the emission of 23,000 tons of CO₂ per year, equivalent to the emissions of 5,000 cars over the same period. This plant could create up to 500 new direct jobs during its construction.

In parallel to this initial 25 MW project, bp continues to assess opportunities to increase capacity in the coming years. In subsequent phases of the project, the green hydrogen produced could also be used in key hard-to-abate industries in the Valencia region, such as the ceramics sector replacing natural gas used in its processes, in chemical industries and in heavy transport.