Spain is poised to become Europe's second-largest hydrogen market.

On July 23, Spain formally adopted its final legislation—the Royal Decree 611/2026—which was published in the Official State Gazette. The final version is more ambitious than both earlier drafts and EU requirements. The enacted law mandates that, by 2030, 2.5% of road transport energy must be replaced by green hydrogen and its derivatives; however, the mandatory quota for refineries is only 1.5%, and for non-refinery fuel suppliers, just 1%. Caption: The chart above illustrates the evolving minimum green hydrogen quotas for Spain’s transport sector. The gray line represents the quota initially proposed by the Cabinet in January 2026; the blue line shows the quota finalized in July 2026. By 2040, the original proposal envisioned roughly 700,000 tonnes per year, whereas the legislated quota approaches 1.1 million tonnes per year—demonstrating that the final law is significantly more ambitious than the initial draft. RED III requires only a minimum 1% share of non-biological renewable fuels (RFNBOs—i.e., green hydrogen and its derivatives) in EU transport fuels by 2030. Spain’s 2.5% RFNBO target thus substantially exceeds this EU benchmark. Spain’s final legislation also raised the 2040 target from 7.5% in the January 2026 draft to 11%, surpassing Germany’s 10% quota. BNEF estimates that this mandatory requirement could drive 1.1 million tonnes of green hydrogen demand by 2040, positioning Spain as Europe’s second-largest market by volume—after Germany. Although the law does not mandate green hydrogen use in the industrial sector, it permits industrial users to generate certificates from eligible hydrogen consumption and sell them to transport fuel suppliers for compliance purposes. After refinery demand effectively peaks post-2030, this pathway may grow increasingly attractive. Penalty costs remain uncertain. The law classifies non-compliance as a “very serious infringement,” with maximum fines reaching €30 million. A subsequent draft order proposes penalties of €4,180 per tonne of oil equivalent—approximately €12 per kilogram of hydrogen.

Aiming to become Europe’s hub, Spain bets big on green hydrogen.

By Liang Weiping Edited by Meng Wei Designed by Ju Jia Sources: Bloomberg; Author: Thomas Gualtieri In June this year, two European monarchs made a rare joint appearance at a port opposite Gibraltar—a bold and ambitious endeavor widely acknowledged by observers. King Felipe VI of Spain and King Willem-Alexander of the Netherlands stood beside a cargo ship in Algeciras to inaugurate a new maritime corridor. What critical commodity drew the attention of modern royalty? Green ammonia—a means of transporting hydrogen—and a cornerstone of Spain’s plan to become Europe’s clean energy hub. June 14, 2024, in Algeciras, Spain: King Felipe VI of Spain (center right) and King Willem-Alexander of the Netherlands (center left) stand before a tanker vessel designed to transport clean ammonia. Photo: Jorge Guerrero/AFP/Getty Images ▼ Green hydrogen is produced by splitting water molecules using renewable energy and is regarded as pivotal to phasing out fossil fuels. Effectively, it serves as a storage medium for solar, wind, and hydroelectric power—and can be transported via pipelines and ships. To avert severe consequences of global warming, the International Renewable Energy Agency (IRENA) estimates green hydrogen production must surge from less than 1 million tonnes today to over 500 million tonnes annually by 2050. Spain bets billions on becoming a green hydrogen hub Spain is scaling up its investment to €18 billion (US$19.5 billion) for producing and distributing hydrogen generated from renewable energy—the most ambitious such initiative in Europe to date, vital for Europe’s goal of becoming the world’s first climate-neutral continent. Spanish green hydrogen projects stretch from the north to the southern coast, including Europe’s largest green hydrogen facility in Puertollano. Calvera Hydrogen SA, based in Zaragoza, plans to build equipment for producing and storing hydrogen-based fuels—including refueling stations for cars, buses, and trains. Altogether, Spain hosts nearly one-fifth of all strategic hydrogen projects globally—second only to the United States. “Spain enjoys a uniquely privileged position in green hydrogen—akin to Saudi Arabia’s relationship with oil,” said Carlos Barrasa, Vice President of Clean Energy at Spanish refiner Cepsa SA. The company is investing €3 billion in the Andalusian Green Hydrogen Valley project. Workers at Calvera Hydrogen SA in Zaragoza, Spain, bundle hydrogen cylinders. Photo: Ángel García/Bloomberg ▼ “There is a logical sequence,” said Martin Lambert, Head of Hydrogen Research at the Oxford Institute for Energy Studies. “First, decarbonize the domestic power system as much as possible; second, produce hydrogen from surplus renewable electricity for local use; and third, shift toward exports.” Cepsa plans to invest €1 billion in production at San Roque, scheduled for completion in 2027. Like a similar project by Iberdrola SA—the top European clean energy developer—in nearby Huelva, this new trade route will ship chemicals to Rotterdam Port in the Netherlands.

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