The Valencian government has approved €76 million [$83.6 million] for two BP projects at Castellón, including €66.3 million [$72.9 million] for a new renewable hydrogen demonstrator under Castellón Green Hydrogen Phase 2 and €9.7 million [$10.7 million] for sustainable-fuels technology — separate from the 25MW Phase 1 plant developed with Iberdrola, which has completed construction and expects to begin production before the end of 2026.

The Generalitat Valenciana approved €76 million [$83.6 million] in regional funding on September 3 under the Valencian FEDER programme, covering two BP projects running from 2026 to 2029.

The larger allocation — €66.3 million [$72.9 million] — goes to Castellón Green Hydrogen Phase 2 S.L., a BP entity separate from the existing Phase 1 joint venture with Iberdrola, for a new large-scale renewable hydrogen demonstrator. The remaining €9.7 million [$10.7 million] goes to BP Energía España for advanced pre-treatment technologies for sustainable biofuels.

Separately, BP and Iberdrola have completed construction of their 25MW first-phase hydrogen plant at the Castellón refinery, with production expected before the end of 2026. That plant is developed through Castellón Green Hydrogen S.L., a 50:50 joint venture equally owned by BP and Iberdrola España. Five modules of 5MW containerised PEM electrolysers were supplied by Plug Power. Renewable electricity comes via a power purchase agreement with Iberdrola covering 200 GWh per year from solar and wind projects. The hydrogen produced will replace part of the grey hydrogen currently used in the refinery's own processes, with an expected annual CO₂ saving of around 23,000 tonnes and production of up to 2,800 tonnes of green hydrogen per year. Total investment in Phase 1 exceeds €70 million.

Castellón has several hydrogen funding programmes

The Phase 1 project received €15 million from Spain's Recovery, Transformation and Resilience Plan via NextGenerationEU. In June 2026, the Spanish national government re-allocated up to €211 million from the EU's IPCEI Hy2USE programme specifically to allow BP and Iberdrola to explore expansion of renewable hydrogen production at Castellón. The new €66.3 million Valencian regional award goes to the separate Phase 2 entity.

BP's longer-term plan for Castellón targets up to €2 billion of investment across multiple phases. The HyVal cluster, led by BP at the Castellón site, aims to develop up to 2GW of electrolysis capacity in the Valencia region by 2030.

Source:  FCW Team