bp and Iberdrola have officially approved the construction of a significant green hydrogen plant at bp’s Castellón refinery, with operations slated to commence in the latter half of 2026. This project represents the first joint venture between the two companies under Castellón Green Hydrogen S.L., a partnership evenly shared by both entities.
The green hydrogen initiative will feature a 25-megawatt (MW) electrolyser, powered entirely by renewable energy sourced through a power purchase agreement (PPA) with Iberdrola, which will provide 200 gigawatt-hours (GWh) of electricity annually. The electrolyser, which will consist of five 5MW modules utilizing proton exchange membrane (PEM) technology, will be supplied by Plug Power, a prominent green hydrogen solutions provider.
The production of green hydrogen is set to significantly impact bp’s Castellón refinery, transforming it into a more sustainable energy hub. The initiative aims to produce approximately 2,800 tonnes of green hydrogen annually, which will replace a portion of the grey hydrogen currently used at the refinery. This shift is expected to reduce carbon dioxide emissions by 23,000 tonnes each year.
Olvido Moraleda, President of bp Energía España, highlighted the project’s significance, stating, “This initiative marks a milestone in our strategy and underscores the value of collaboration with like-minded partners such as Iberdrola and the public-private sector. It not only advances the transformation of our Castellón infrastructure but also aims to bolster the economic and industrial development of the Valencia region.”
Mario Ruiz-Tagle, CEO of Iberdrola Spain, emphasized the broader implications of the project: “The Castellón project demonstrates that, with sector-wide collaboration and proper incentives, a new industrial model centered on the green hydrogen value chain is achievable. This green hydrogen economy is emissions-free, electrified, attracts investment, and generates quality jobs in the region—true elements of the energy transition.”
The initiative, supported by the Technology Institute of Energy (ITE), has received €15 million ($16.6 million) in funding from the Spanish Recovery, Transformation, and Resilience Plan, which is backed by the NextGenerationEU program of the European Union.
Looking ahead, the green hydrogen produced could also serve pivotal hard-to-abate industries in the Valencia region, including the ceramics sector, where it could replace natural gas in production processes, as well as the chemical industry and heavy transport sectors.
The announcement of this project follows bp’s recent letter of intent with the Valencian Government to form a joint working committee aimed at overseeing the refinery’s transformation into an integrated energy hub.
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