BP and Iberdrola could expand their 25MW green hydrogen plant at the British oil major’s refinery in Spain, after the Spanish government approved the reallocation of €211m ($239.5m) in subsidies.
The pair said they will explore opportunities to increase green hydrogen at BP’s Castellón refinery, where they have completed construction of a 25MW electrolysis plant that will replace grey hydrogen with green.
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It comes after Spain’s Ministry for Ecological Transition and Demographic Challenge signed off on the duo using €211m of funding originally awarded to projects under the EU’s Important Projects of Common European Interest (IPCEI) Hy2Use scheme in 2022.
Spain had selected seven projects for €794m ($901m) in IPCEI Hy2Use funding in 2024. However, neither BP nor Castellón were included on the list.
It’s unclear which project or projects have dropped out of the scheme.
The first 25MW phase has already been granted €15m ($17m) from the Spanish government.
The companies said the Plug Power electrolyser plant had been completed, with BP and Iberdrola joint venture Castellón Green Hydrogen now undertaking testing.
They expect the plant to begin production before the end of 2026.
In 2023, BP said it would build “at least” 200MW of electrolysis capacity at the site by 2027, with intentions of scaling up to 2GW by 2030.
More broadly, the oil and gas major has been quickly pivoting back towards fossil fuels, which will see it limit further hydrogen and carbon capture projects.
The firm recently pulled out of a large-scale UK blue hydrogen project, as well as a major planned green hydrogen and renewable hub in Australia’s Pilbara region.
It also previously said it had stopped 18 early-stage hydrogen projects.
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