bp, Iberdrola Sign FID for Green Hydrogen Plant at Spanish Refinery

bp and Iberdrola have signed a final investment decision (FID) to build a 25-MW green hydrogen project at bp’s Castellón refinery, which may be operational in late 2026. The project is undertaken by both companies through a joint venture— Castellón Green Hydrogen S.L.—and includes participation from the Technology Institute of Energy. The initiative has been awarded €15 million from the Innovative Value Chain and Renewable Hydrogen Knowledge division of the Spanish Recovery, Transformation, and Resilience Plan. Funding was allocated by NextGenerationEU.

According to a power purchase agreement signed with Iberdrola, a 25-MW electrolyzer powered by renewable electricity will supply 200 GWh/year from Iberdrola’s photovoltaic and wind projects. The electrolyzer, supplied by Plug Power, will include five modules of 5-MW containerized proton exchange membrane technology. Water electrolysis-produced green hydrogen complies with Europe’s Renewable Fuels of Non-Biological Origin requirements and will support Castellón refinery’s transition to an integrated energy hub.

“Projects like Castellón show that, with the collaboration of all agents in the sector and the appropriate incentives, it is possible to develop a new industrial model based on the green hydrogen value chain,” said Mario Ruiz-Tagle, CEO of Iberdrola Spain. “The green hydrogen economy is emissions-free, electrified, attracts investment, and creates quality jobs in the region. We continue to work with committed partners to position Spain as a technological benchmark, boosting the creation of a green hydrogen industry in Europe.”

Approximately 2,800 annual tons of green hydrogen could replace the refinery’s grey hydrogen supply, which is currently produced from natural gas. Green hydrogen usage is expected to reduce CO₂ emissions by 23,000 tons per year—the emissions equivalent of 5,000 cars over the same period. The plant may create up to 500 direct jobs during construction. In the project’s later phases, green hydrogen could be used in hard-to-abate industries in the Valencia region, such as ceramics, chemicals, and heavy transport.

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In August 2024, bp signed a FID for its sixth crude oil hub in the U.S. Gulf of Mexico—the Kaskida project. It’s located in Keathley Canyon, approximately 250 miles southwest of New Orleans. The project unlocks the future development of discovered resources equivalent to 10 billion barrels across the Kaskida and Tiber catchment areas.

The Kaskida field contains proven recoverable resources estimated at approximately 275 million barrels of oil equivalent in Phase 1. Additional wells, subject to further evaluation, may be drilled in future phases. It will feature a new floating production platform with a six-well capacity, producing 80,000 barrels of crude oil per day in Phase 1. Production is scheduled for 2029.