Spain and Portugal Secure Major Funding for Hydrogen Projects, Positioning Themselves as Key Players in European Decarbonization Efforts

The first community hydrogen auction has resulted in significant funding for Spain and Portugal, with three Spanish projects securing 263 million euros of the 720 million euros allocated by Brussels. These projects, including Catalina and Hysencia in Aragon, along with El Alamillo in Andalusia, are expected to play a crucial role in decarbonizing sectors like air and maritime transport, as well as chemical and steel industries.

The Iberian Peninsula’s competitive advantage in the renewable energy sector makes it an ideal location for hydrogen production. One of the main recipients of funding is the Catalina project in Andorra, which is expected to receive over 230 million euros over the next decade. The project will consist of a 500-megawatt electrolyzer powered by dedicated wind and solar plants. Other Spanish winners include Hysencia in Huesca and El Alamillo in Córdoba, developed by Benbros Energy.

All selected projects must commence hydrogen production within five years of signing the subsidy agreement. The European Commission has hinted at a second round of funding towards the end of the year to continue supporting promising projects that will drive the growth of the renewable hydrogen industry in Europe. The European Hydrogen Bank aims to attract private and international investments in the hydrogen sector to address funding challenges and ensure a steady supply of renewable hydrogen.

Despite the potential in this sector, only a small percentage of announced projects may actually become operational by the end of the decade according to International Energy Agency report. In Spain, there are plans to produce 2.5 million tons of green hydrogen annually by 2030, with a significant portion intended for export through projects like BarMar, a pipeline connecting Barcelona to Marseille. This will position Spain and Portugal as key players in the European hydrogen market, contributing significantly to the continent’s decarbonization efforts.

The success of these projects is not only crucial for Spain and Portugal but also for Europe as a whole as it paves way for future developments