BP has announced plans to develop a low-carbon green hydrogen cluster at its Castellon refinery in Spain.

The UK supermajor could invest up to €2 billion ($2.12 billion) into the project, which intends to have up to 2 gigawatts of electrolysis capacity by 2030.

The project, called HyVal, is a public-private initiative led by BP and will work to replace the company’s use of grey hydrogen at the Castellon refinery. The green hydrogen will also be used as a feedstock to produce biofuels such as sustainable aviation fuel (SAF).

“We see Hyval as key to Castellon’s transformation and critical to supporting decarbonisation across the Valencia region. We aim to develop up to 2 GW of electrolysis capacity by 2030 for green hydrogen production, helping decarbonise our operations and customers,” said BP Energia Espana president Andres Guevara.

“And we plan to triple the refinery’s production of biofuels to help meet the growing demand for lower carbon fuels such as SAF. We believe HyVal can play an important role in Valencia region’s efforts to decarbonise and help support thousands of industrial jobs across the region.”

The project’s development will be carried out in phases. The first phase is anticipated to be operational by 2027, using an electrolysis plant with a capacity of at least 200 megawatts. This would produce up to 31,200 tonnes per annum of green hydrogen.

The second phase should be completed by 2030 as the electrolysis plant expands.

HyVal has the potential to gain participation from other industrial companies in the region, including public institutions and research centres. The project could create up to 5000 direct and indirect jobs in the region, BP said.

Are you missing out on ACCELERATE?
Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge.