What is the significance of the €211 million EU funding for BP and Iberdrola's Castellón electrolyzer project?

The €211 million in European funding awarded to BP and Iberdrola’s Castellón refinery electrolyzer project—administered via Spain’s energy ministry MITECO—enables expansion of renewable hydrogen production to support decarbonization of BP’s 110,000 barrels/day refinery. This funding builds on the recently completed 25-megawatt electrolyzer, which has entered commissioning testing and is expected to begin producing green hydrogen before the end of 2026, making it Spain’s largest operational green hydrogen facility. The expansion aims to scale up capacity toward a potential 200 MW, significantly increasing output beyond the initial 2,800 metric tons/year of green hydrogen—enough to displace fossil-derived hydrogen and avoid approximately 23,000 metric tons/year of CO₂ emissions. The first phase’s €70 million investment is powered by 200 gigawatt-hours/year of renewable electricity from Iberdrola España’s photovoltaic and wind projects under a power purchase agreement. Crucially, the project also intends to supply green hydrogen to hard-to-abate sectors like ceramics and chemicals, extending its climate impact beyond refining. This aligns with broader EU Hy2Use fund priorities, as evidenced by prior awards of €160 million and €155 million to Repsol’s 100-MW refinery electrolyzers in Bilbao and Cartagena.

How does the Castellón green hydrogen project contribute to emissions reduction and industrial decarbonization?

The Castellón green hydrogen project directly contributes to emissions reduction by replacing fossil-derived hydrogen used in BP’s refinery processes with 2,800 metric tons/year of green hydrogen—avoiding about 23,000 metric tons/year of CO₂ emissions. This displacement is enabled by a 25-MW electrolyzer powered entirely by 200 gigawatt-hours/year of renewable electricity sourced from Iberdrola España’s wind and solar assets under a power purchase agreement. Beyond the refinery, the project is designed to supply green hydrogen to sectors where decarbonization is especially difficult, specifically naming ceramics and chemicals industries—highlighting its role in enabling deep decarbonization across multiple industrial value chains. The facility’s status as Spain’s largest operational green hydrogen plant upon startup (expected before end-2026) underscores its pioneering scale and strategic importance in national and EU clean hydrogen infrastructure development. Its expansion pathway—potentially up to 200 MW—further signals a long-term commitment to scaling low-carbon hydrogen supply in line with EU climate targets and the REPowerEU plan’s emphasis on domestic renewable hydrogen production.

BP, Iberdrola get EU funding for expansion of electrolyzer project in Spain

Jun 26, 2026

BP and Iberdrola secured €211 million in EU funding to expand their green hydrogen electrolyzer project at Spain's Castellon refinery. Production is expected to start by late 2026, aiding decarbonization in the refinery and chemical sectors.

chemweek

2026-06-26

BP, Iberdrola get EU funding for expansion of electrolyzer project in Spain

BP, Iberdrola get EU funding for expansion of electrolyzer project in Spain

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