Iberdrola España and BP have secured approval from Spain’s Ministry for the Ecological Transition and the Demographic Challenge for the reallocation of up to €211m ($240m) in funding from the Important Project of Common European Interest (IPCEI) Hy2USE programme.
The funding, granted through the Institute for Energy Diversification and Saving (IDAE), is intended for expanding green hydrogen production at BP’s refinery in Castellón, Spain.
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The companies are working through a joint venture, Castellón Green Hydrogen, which has completed the construction phase of a 25MW green hydrogen facility at the site.
The project has now moved into the commissioning testing phase, with initial hydrogen output anticipated by the year-end.
According to current plans, the facility is expected to become Spain’s largest operational green hydrogen plant by 2026.
The initiative is part of a broader partnership between Iberdrola España, the subsidiary of the Iberdrola Group, and BP to explore energy solutions that facilitate the replacement of natural gas with renewable energy in industrial applications.
Green hydrogen from the Castellón facility could also be supplied to industries that are more challenging to decarbonise, such as ceramics and chemicals.
The project involves the collaboration of the Energy Technology Institute (ITE) in Valencia, which is also participating in its development.
In addition to IPCEI funding, the project has secured a further €15m in support from the Innovative Value Chain and Knowledge in Renewable Hydrogen programmes within Spain’s Recovery, Transformation and Resilience Plan. This funding is financed through the European Union’s NextGenerationEU funds.
The initiative aligns with the EU’s ACCELERATE EU package, which has recently been introduced to help drive decarbonisation and enhance energy supply independence within Europe.
Iberdrola reported that the development is intended to support its ongoing focus on renewable solutions and accelerating the transition towards an electrified economy.
In December 2025, Iberdrola reached an agreement to acquire full ownership of the 242MW Ararat wind farm in Victoria, Australia, from Partners Group and OPTrust.
