bp and Iberdrola have officially launched construction of a 25 MW green hydrogen project at bp’s Castellón refinery, slated to begin operations in the second half of 2026. This marks the first collaborative hydrogen initiative between the two companies, executed through their joint venture, Castellón Green Hydrogen S.L. The project was announced during a public event celebrating the signing of the final investment decision in July 2024.
The initiative, which also involves the Technology Institute of Energy (ITE), has secured €15 million in funding from the Innovative Value Chain and Renewable Hydrogen Knowledge initiative of Spain’s Recovery, Transformation, and Resilience Plan, supported by NextGenerationEU from the European Union.
Millán Garcia-Tola, Iberdrola’s Global Director of Hydrogen, stated, “This collaboration with bp signifies our ongoing commitment to advancing green hydrogen as a vital component for industrial decarbonization. The plant will convert 200 GWh per year of Iberdrola’s renewable energy into green hydrogen, contributing to bp’s decarbonization strategy and exemplifying our strong partnership. Iberdrola will leverage its experience from existing green hydrogen facilities to enhance and expedite this project.”
Olvido Moraleda, President of bp Energía España, noted, “This project is a key milestone in our strategy, showcasing the power of collaboration with partners like Iberdrola and within the public-private sector. It not only facilitates the transformation of our Castellón infrastructure but also aims to bolster the economic and industrial landscape of the Valencia region.”
Mario Ruiz-Tagle, CEO of Iberdrola Spain, emphasized that this project represents their strategic alliance with bp, positioning them to lead the renewable hydrogen sector in Valencia. He stated, “Castellón illustrates how collaborative efforts and proper incentives can foster a new industrial model based on the green hydrogen value chain. This emissions-free economy attracts investment and generates quality jobs, exemplifying the true energy transition. We are committed to establishing Spain as a technological leader, promoting the growth of a green hydrogen industry in Europe.”
The 25 MW electrolyzer will utilize renewable energy sourced from a power purchase agreement with Iberdrola, providing 200 GWh per year from its solar and wind projects. It will feature five 5 MW containerized proton exchange membrane (PEM) modules supplied by Plug Power, a leader in green hydrogen solutions. The green hydrogen produced will meet European standards for renewable hydrogen (Renewable Fuels of Non-Biological Origin, RFNBO) and will assist in transforming bp’s Castellón refinery into an integrated energy hub. It is estimated that the plant could generate around 2,800 tons of green hydrogen annually, reducing the reliance on grey hydrogen derived from natural gas and potentially cutting CO2 emissions by 23,000 tons per year, equivalent to the emissions of 5,000 cars. The project is expected to create up to 500 direct jobs during construction.
In addition to this initial project, bp is exploring opportunities to expand capacity in the future. Subsequent phases may see the green hydrogen being utilized in key industries in the Valencia region, such as ceramics, chemicals, and heavy transport, replacing natural gas in their processes.
The announcement comes shortly after bp signed a letter of intent with the Valencian Government to strengthen the region’s leadership in the energy transition. This agreement has led to the establishment of a joint working committee to facilitate dialogue and oversee the transformation of bp’s refinery into an integrated energy hub.
Recently, Iberdrola has also forged several long-term partnerships aimed at promoting economic decarbonization. In addition to its joint venture with bp for electric mobility in Spain and Portugal, Iberdrola has partnered with Norges Bank Investment Management, Masdar, Mapfre, and Energy Infrastructure Partners to enhance renewable energy development, and with GIC to expand transmission networks in Brazil.
