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BP is moving forward with plans to develop a green hydrogen project at its Castellón refinery in Spain, saying on July 30 it reached a final investment decision (FID).
FID was taken as the company gears up for potential investment in five to 10 hydrogen projects this decade. The company has identified hydrogen development as one of its six priorities in action.
Expected to play a key role in reducing global emissions, hydrogen is seen as a route to help hard-to-abate industries such iron and steel shrink their CO2 footprints.
“At Lingen in Germany, the award of European IPCEI [Important Projects of Common European Interest] funding has paved the way for progress with a 100-MW green hydrogen project, with FID expected by the end of the year,” BP CEO Murray Auchincloss said during the company’s second-quarter 2024 earnings broadcast. “Both projects meet our investment hurdles and help us create SAF [sustainable aviation fuel] and green hydrogen for customers while we decarbonize our assets.”
BP launched the green hydrogen cluster of the Valencia region at its Castellón refinery in 2023. The phased development is expected to have up to 2 gigawatts of electrolysis capacity by 2030. Last year, BP said the refinery’s transformation could see a total investment of up to €2 billion (US$2.16 billion) from BP by 2030. The first phase of the project involves the installation of an electrolysis plant with at least 200 megawatts capacity. Initial production would be up to 31,200 tonnes of green hydrogen per year.
BP has said it aims to produce between 0.5 MMtonne and 0.7 MMtonne of low carbon hydrogen annually by 2030. The company said it has a global project pipeline of 2.5 million tonnes per annum of hydrogen production capacity.
BP is among players involved in developing hydrogen hubs in the U.S. The company is a partner in the Midwest Alliance for Clean Hydrogen (MachH2), which is pursuing development of a hydrogen network in Illinois, Michigan and Indiana.
Of the $1.8 billion capex allocated for so-called transition growth engines for first-half 2024, $100 million was allocated to hydrogen, according to BP’s earnings report. The amount was the lowest of the five segments listed as growth engines. These included renewables and power, $700 million; bioenergy, $500 million; electric vehicle charging, $300 million; and convenience, $200 million.
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