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Spanish industry kicks off EU green hydrogen race


Associated Press

PUERTOLLANO, Spain (AP) — In Spain, the dream of an emissions-free future for heavy industry starts with a rugged Castilian hillside covered in solar panels, and ends with an ice-cold beer. When the beer will be available, and how much it will cost, depends on an intervening rollout of green hydrogen.

This Mediterranean nation wants to become the European leader in hydrogen produced exclusively from renewable energy. With plenty of sunshine and wind and wide-open countryside to host those power sources, Spain’s ambition is to export the gas to the rest of the continent.

Green hydrogen is created when renewable energy sources power an electrical current that runs through water, separating its hydrogen and oxygen molecules through electrolysis. The result does not produce planet-warming carbon dioxide, but less than 0.1% of global hydrogen production is currently created this way.

As the global price of solar power continues to fall, Spain is betting that it can rapidly build a new supply chain for sectors of the economy that require hydrogen for industrial processes, and which have been harder to wean off fossil fuels.

Critics of Spain’s ambitions have warned there isn’t enough renewable energy capacity to produce green hydrogen that can replace natural gas and coal in the making of petrochemicals, steel and agricultural products.

But supporters are relying on the country’s plans for a head start to implant themselves in the nascent green hydrogen economy. The International Energy Agency estimated in December that Spain would account for half of Europe’s growth in dedicated renewable capacity for hydrogen production

“The sense of urgency is that everyone seems to be racing to be the first to export green hydrogen,” said Alejandro Núñez-Jiménez, an expert in green hydrogen policy at the Swiss Federal Institute of Technology in Zurich. “Once you build energy infrastructure, it’s going to be there for decades. So it’s really a game where the first one might lock in the situation for many years,”

A glimpse of the potential for green hydrogen can be seen in Puertollano, a former mining town now home to a large industrial park where Spanish energy company Iberdrola and fertilizer manufacturer Fertiberia have partnered to create the first zero-carbon plant nutrients in the world. The fertilizer will one day be scattered onto malt barley, which will then be used to make Heineken’s first “green malt” beverage.

Etienne Strijp, president of Heineken Spain, emphasized the difficulty of stripping carbon out of agricultural processing “Being carbon neutral throughout our value chain represents an enormous challenge,” he said at the announcement of the company’s plan to produce green malt.

The green hydrogen plant in Puertollano, Europe’s largest functioning facility, is currently in a pilot phase. Iberdrola owns the 100 megawatts’ worth of solar panels that power electrolyzers to separate water from hydrogen. Huge hydrogen storage tanks then feed pipes that take the gas direct to Fertiberia, where it is used to make ammonia, the foundational chemical in nitrogen fertilizers.

Synthetic fertilizers are a highly polluting product. A recent study found that fertilizers emit the equivalent of 2.6 gigatons of carbon per year, or more than global aviation and shipping combined. One-third of those emissions come from the production of fertilizers in plants like Fertiberia’s.

“We have green hydrogen for these difficult-to-abate sectors, so that we can achieve the goal of a totally decarbonized economy,” Javier Plaza de Agustín, who manages Iberdrola’s green hydrogen arm, said.

The plant has the capacity to reduce Fertiberia’s emissions by 10%, but most of the fertilizer firm’s hydrogen is still drawn from natural gas, creating so-called “gray” hydrogen. The company plans to be 100% carbon neutral by 2035.

In these early days, the challenges for Spain’s green hydrogen players are several.

The first is cost. Javier Goñi, Fertiberia’s CEO, said green hydrogen technology is not yet delivering a cost-effective final product.

Spanish firms are pushing for EU subsidies to match the recent announcement of $750 million for research and development of hydrogen projects in the United States. They argue the subsidies are essential to grow the market so economies of scale make zero-carbon products cost-competitive.

“Right now, we are at such an early stage that we need that help from the public authorities to cover the funding gap,” Plaza de Agustín said. “Without a framework (it) is difficult to invest in a plant and facility for 20, 25 years without knowing what’s going to happen.”

The European Union’s executive commission has proposed that the 27-nation EU produce 10 million metric tons of renewable hydrogen by 2030 and to import 10 million metric tons more. Last month, the European Commission announced measures to create an intra-EU hydrogen market and to assess infrastructure needs.

But the second problem is the EU’s promise of ramped-up supply with little consideration for where the demand really lies, argued Núñez-Jiménez, the hydrogen expert.

“Spain and Portugal could produce a lot of green hydrogen, and demand in Central Europe may materialize, but the connection between supply and demand does not exist yet,” he said. “Developing the infrastructure to transport that gas from the Iberian peninsula to central Europe must be a priority.”

Hydrogen, the lightest element in the periodic table, is difficult to store and transport and is highly flammable. For this reason, Iberdrola built its hydrogen plant right next to Fertiberia’s factory, to minimize leakage. Once Iberdrola and its competitors have met Spain’s limited hydrogen needs for things like making beer, they will need to look outside its borders to keep growing.

“Everyone wants to be in hydrogen production,” said Goñi of Fertiberia. “But today, there are basically few companies and few sectors of activity that can absorb large amounts of hydrogen.”

Partnerships are key. Ammonia created at the Fertiberia plant with Iberdrola’s green hydrogen could be used to transport hydrogen in liquid form before it is reconverted into a gas.

Decarbonizing hydrogen for industry has taken on greater importance in Europe since Russia’s invasion of Ukraine. Russia is the world’s second-largest producer of natural gas, which powers most global hydrogen production.

Spain, France, Germany and Portugal have agreed to build a hydrogen pipeline by 2030 to transport some 2 million metric tons of hydrogen to France annually — 10% of the EU’s estimated hydrogen needs.

But not everyone in Spain wants a hydrogen plant on their doorstep. The use of land for renewable energy installations, and the 9:1 ratio of water to kilo of green hydrogen produced can be a tough sell for regions suffering from long-term drought.

Pere Virgili, the mayor of the northeastern seaside town of Roda de Bera, rejected an initial proposal from a Danish green hydrogen developer last year that would have covered 42 hectares (103 acres) of territory with a mix of solar panels and wind turbines to power its electrolyzers.

“It’s not that we are against renewable energy, but we can discuss at length if using that much water and land to create it is actually environmentally friendly or not,” he said, adding that the project would create just 100 jobs.


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