Spain aims to lead Europe in hydrogen production generated exclusively from renewable energy. green hydrogen. With abundant sunshine, strong winds, and vast spaces to host energy sources, the country envisions exporting this gas across the continent.
As the cost of solar power declines, Spain is racing to build a robust supply chain for sectors that rely on hydrogen for industrial processes, while acknowledging the ongoing challenge of reducing fossil fuel dependence.
Critics warn that renewable capacity may not yet be enough to replace natural gas and coal in petrochemicals, steel, and agriculture.
Yet supporters point to Spain’s strategic plans and the momentum behind them. Early progress could position the nation to compete in the emerging green hydrogen economy. The International Energy Agency estimated in December that Spain would account for half of Europe’s growth in renewable capacity dedicated to hydrogen production.
“The rush is about showing leadership in exporting green hydrogen,” notes Alejandro Núñez-Jiménez, a green hydrogen policy expert at the Swiss Federal Institute of Technology in Zurich. “Once the energy infrastructure is set, it will endure for decades. It becomes a first-come, first-served scenario that has guided the market for years.”
Puertollano green hydrogen plant
An illustration of green hydrogen’s potential sits in Puertollano, Castilla-La Mancha, a former mining town that now hosts a large industrial complex. Iberdrola and the fertilizer maker Fertiberia have teamed up to create what is described as a carbon-neutral plant food. The resulting fertilizer would eventually be used on malted barley, with the barley supplying Heineken’s first “green malt” beverage.
Image accompanying the Puertollano facility
Etienne Strijp, head of Heineken Spain, emphasized the hardship of removing carbon from the agricultural chain. “Being carbon neutral across the value chain is a major hurdle,” he stated in reference to the plan to produce green malt.
The Puertollano plant, Europe’s largest operating facility of its kind, is currently in a pilot phase. Iberdrola owns 100-megawatt solar arrays powering electrolyzers that split water to release hydrogen. Large storage tanks move the gas through pipelines to Fertiberia, where it feeds ammonia production—the key chemical for nitrogen fertilizers.
Synthetic fertilizers are identified as highly polluting. A recent study attributes 2.6 gigatons of CO2-equivalent emissions per year to fertilizers, a level that exceeds the combined emissions of global aviation and shipping. Fertiberia is a notable contributor to these figures.
“We have green hydrogen for hard-to-decarbonize industries, which helps push toward a fully green economy,” commented Javier Plaza de Agustín, who leads Iberdrola’s green hydrogen division.
The plant has the capacity to reduce Fertiberia’s emissions by only about 10 percent. Consequently, much hydrogen used by the fertilizer sector continues to be produced from natural gas via traditional gray hydrogen. Fertiberia aims for carbon neutrality by 2035.
Two big challenges await
In the early stages, several hurdles face green hydrogen in Spain.
The first is cost. Fertiberia’s managing director, Javier Goñi, notes that green hydrogen technology still struggles to deliver a profitable end product.
Spanish firms seek EU subsidies, echoing recent US support of 750 million dollars for hydrogen research and development. Subsidies are viewed as essential to unlock economies of scale and render zero-carbon products financially viable.
“We are at a very early stage. Public funding is needed to bridge the gap,” stated Plaza de Agustín. “Without it, investing 20 to 25 years in a factory without clarity about outcomes is difficult.”
The European Commission has proposed that member states produce 10 million metric tons of renewable hydrogen and import another 10 million metric tons by 2030. Recent measures aim to establish an intra-EU hydrogen market and assess infrastructure needs.
“Green hydrogen will be the energy source of the future,” observed a representative from Iberdrola, highlighting the potential for widespread decarbonization.
Nevertheless the second challenge is demand clarity. The EU’s pledge to expand supply comes without precise appetite signals, according to Núñez-Jiménez. “Spain and Portugal may generate substantial green hydrogen, while demand in Central Europe remains uncertain. Building the infrastructure to move hydrogen from the Iberian Peninsula to central Europe should be a priority.”
Hydrogen’s storage and transport difficulties, plus its flammability, explain why Iberdrola located the Puertollano plant near Fertiberia to minimize leaks. As Spain grows its hydrogen capacity, attention will turn to opportunities beyond its borders to sustain expansion.
Few companies and limited demand
“Everyone wants to join hydrogen production,” remarked Fertiberia’s Goñi. “But only a few firms and sectors can absorb significant amounts.”
Alliances are essential. The ammonia produced with Iberdrola’s green hydrogen at Fertiberia can be shipped in liquid form and later converted back to gas when needed.
Hydrogen’s decarbonization role has gained prominence in Europe since the Russia-Ukraine conflict intensified energy concerns. Russia remains a major natural gas producer, currently powering much of the world’s hydrogen production.
Spain, along with France, Germany, and Portugal, has agreed to build a hydrogen pipeline to move around 2 million metric tons of hydrogen to France by 2030, representing about 10 percent of the EU’s estimated needs.
Environmental considerations
Yet not everyone in Spain welcomes a hydrogen plant nearby. Land use for renewable energy projects and the water requirements for green hydrogen—about nine liters per unit of energy produced—pose challenges for drought-stricken regions.
Roda de Barà’s mayor Pere Virgili rejected an initial proposal for a green hydrogen development that would cover 42 hectares with solar panels and wind turbines to power the electrolyzers. “We don’t oppose renewables, but we must ensure environmental integrity by considering water and land use,” he explained, adding that the project would create only about 100 jobs.
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