The 25MW plant could create up to 500 jobs during its construction and around 25 Spanish companies will take part in the build-out.

The first phase involves earthworks and preparation of a plot of land next to the BP refinery in Castellón.

Civil work will begin in the second quarter of the year.

The next milestone will be the installation of the first major equipment, including electrolysers, targeted for the second half of 2025.

This equipment is what allows green hydrogen to be produced through a chemical process – electrolysis – capable of separating the hydrogen and oxygen molecules that make up water using electricity from renewable sources.

The electrolyser will be powered by renewable electricity through a power purchase agreement (PPA) signed with Iberdrola that will supply 200GWh annually from the latter’s photovoltaic and wind projects.

It is expected to result in avoiding the emission of approximately 23,000 tonnes of CO2 per year, equivalent to the emissions of 5000 cars over the same period.

BP’s vice-president of hydrogen, Spain and new markets Carolina Mesa said: “The start of construction of the largest green hydrogen plant in Spain is great news, because it allows us to see tangible progress in an important industrial decarbonisation project.

“BP’s refinery in Castellón is a model for the transformation of refineries into integrated energy hubs.”

Director of hydrogen development at Iberdrola Jorge Palomar Herrero added: “This project is already enabling the development of a hydrogen value chain in our country with key equipment manufactured in Spain and providing work for more than 25 local companies.

“Additionally, the plant will be supplied with 200GWh a year of renewable energy from Iberdrola’s wind and photovoltaic plants in Spain.”

He added that it “meets all EU requirements to ensure that the hydrogen produced is green hydrogen”.

The project has an investment of more than €70m and is being developed jointly by BP and Iberdrola Spain through Castellón Green Hydrogen SL, a company owned equally by both developers.

The plant is expected to be operational in the second half of 2026.