Spain aims to lead the upcoming energy transformation and become Europe’s largest hub for renewable hydrogen, produced with electricity from wind and solar. Major energy groups, industrial players, and research centers are pursuing hundreds of projects linked to the green hydrogen opportunity.
Right now, most plans remain in early stages. Regulators warn that regulatory and economic barriers could slow progress, and the immediate hurdle is the risk that large energy players suspend parts of their planned investments if the government extends the extraordinary tax on sector profits, a move currently under debate.
The green hydrogen push is meant to accelerate decarbonization by replacing natural gas with a green, emission free alternative in sectors that are hard to electrify. Across Spain, 361 projects are tied to the new wave of renewable hydrogen with investments totaling 36.37 billion euros, according to AeH2.
More than half of these efforts focus on research, development, and demonstrations in controlled settings, with joint investments around 6.0 billion. The remainder, totaling 167 initiatives, are concrete commercial plans, most of which include hydrogen production plants and about sixty of them combine production with nearby industrial demand in what are called hydrogen valleys.
Companies such as Iberdrola, Endesa, Naturgy, Repsol, Cepsa, Enagás, BP, EDP, Acciona, Exolum, Redexis, Reganosa, and the Maersk line exemplify the broad corporate interest in hydrogen projects at different stages of maturity. AeH2 notes that the commercial projects are slated to mobilize roughly 30 billion euros in investments, with about 2.35 billion euros of public funding through various aid programs.
If all these projects move forward, electrolysis capacity could reach 23,000 MW, more than double the government target set for this decade. The National Plan for Energy and Climate (PNIEC) contemplates a goal of 12,000 MW of electrolysis capacity by 2030.
Many projects remain in the pipeline, and the schedule put forward by energy groups envisions that by 2030 there would be 113 plants in operation with a combined capacity of 13,600 MW, according to AeH2 records.
Corporate Backlash
Yet in recent weeks the major energy groups have threatened to halt investments in Spain, particularly some multibillion projects linked to green hydrogen, if the government keeps the extraordinary tax on their sales. The coalition government narrowly approved the tax extension in parliament after bargaining with several partners and will spell out details in a royal decree before year’s end.
The big players have formed a historic united front against the tax extension, warning that green investments totaling up to 30 billion euros in the coming years could be at risk if the levy remains high. The Enerclub coalition, which groups Iberdrola, Endesa, EDP, Naturgy, Repsol, BP, and TotalEnergies among others, has publicly signaled strong opposition to extending the tax.
Other Problems Threatening the Boom
Beyond the tax issue, project promoters identify several obstacles that could slow momentum. A primary concern is demand for hydrogen, which remains uncertain because buyers would need prices far lower than current production costs for green hydrogen to be competitive with gas or hydrogen produced from carbon intensive electricity. Uncertainty over price and buyers slows investment decisions.
Promoters also point to difficulties in securing public funding due to limited aid budgets, incompatibility between different aid schemes, and bureaucratic hurdles. Access to sufficient electricity for hydrogen production, whether due to grid connections or high electricity prices, and the lack of fully developed regulation to accelerate the sector, especially RED III transposition, are cited as additional challenges. Other potential issues include securing water and suitable land for new facilities.
More than 1.6 Billion in Aid
Spain aims to shape an energy and industrial ecosystem that embraces the hydrogen revolution as part of the broader energy transition, leveraging European funds to support research, development, production, and use cases.
The government has launched seven aid programs for hydrogen related projects under the Recovery and Resilience Facility and three more for important European IPCEI projects. In total, more than 1.375 billion euros have been allocated to 112 projects, with more than 300 applicants seeking support.
Two years ago, Spain launched the strategic PERTE program for renewable energy and green hydrogen, initially endowed with 6.9 billion euros in European funds and later expanded to 7.9 billion, with a goal to mobilize another 16 billion in private investment. As part of the plan, 1.555 billion euros of public funds are earmarked for green hydrogen to mobilize about 2.8 billion in private capital, enabling Spain to take a significant role in the hydrogen revolution.
In parallel, in the first European Commission auction of the European Hydrogen Bank, two Spanish projects received 254 million euros and the second auction saw Spain committing between 280 and 400 million euros more. At least seven additional Spanish hydrogen projects are expected to receive more than 330 million euros from the Innovation Fund, separate from the Bank of Hydrogen funds.
For readers in North America, Spain’s experience underscores the value of policy coherence, accessible funding, and large-scale deployment when building a domestic hydrogen economy. It shows how public investment, private capital, and regulatory certainty can align to scale a green energy transition.