Spain’s abundant renewable resources, strategic geographic location, and strong industrial base position it as a rising leader in the global market for green hydrogen in Spain and beyond.
With vast territory with high solar yield, robust onshore and offshore wind corridors, and well-established industrial clusters demanding low-carbon solutions, Spain is uniquely fortunate to accelerate green hydrogen production and integration.
In recent years, the Spanish government and industry stakeholders have made significant commitments to develop the hydrogen economy, framing it as a vital pathway for achieving national decarbonization goals. This vision is closely aligned with wider European Union objectives, which see hydrogen as a cornerstone of the green transition.
The ambitious target of installing 12 GW of electrolyzer capacity by 2030 reflects Spain’s ambition to rapidly move up the value chain, from early-stage pilot projects to large-scale commercial facilities.
Green hydrogen in Spain: Where we are today
Industry status & growth projections
Spain’s green hydrogen industry is rapidly maturing, moving from concept-level pilot projects toward large-scale commercial deployment. Several landmark initiatives have entered various stages of development, reflecting robust public and private sector commitment. Recent estimates put Spain’s currently operational green hydrogen projects at around 50 MW of electrolyzer capacity, with multiple pilot plants integrating solar or wind energy. Though still modest on a global scale, this initial capacity serves as a springboard for a pipeline of larger projects.
Among the key operational projects are Repsol’s industrial-scale demo plants, which focus on using green hydrogen in refining processes, and Iberdrola’s flagship facility in Puertollano (Castilla-La Mancha), employing a 20 MW electrolyzer powered by a 100 MW photovoltaic plant. These pioneering projects aim to demonstrate the technical viability and economic competitiveness of green hydrogen across multiple applications, including industrial feedstock, mobility, and power generation.
In addition to operational capacity, there is a robust pipeline of projects under construction, many of which are scheduled for commissioning between 2026 and 2027 (Figure 1). Initiatives across different regions, particularly in Aragon, Catalonia, and Andalusia, are seeking to tap into local demand from refineries, fertilizer plants, or steel mills, and sometimes link directly with national or European energy networks.
Spain’s national target of reaching 12 GW of electrolyzer capacity by 2030 is undoubtedly ambitious, but it may be achievable under the right conditions. Key enablers include a favorable regulatory environment, ongoing reductions in renewable energy costs, and strong policy support from both national and European authorities.
However, challenges remain: the technology must achieve further cost declines, and infrastructure must be scaled, both for domestic distribution and for cross-border export. If these conditions are met, analysts see Spain transforming the country into one of Europe’s primary green hydrogen hubs.
Key hydrogen clusters & regional growth
Spain’s approach to scaling up hydrogen heavily relies on “hydrogen valleys” (IDAE) or regional clusters, which leverage existing industrial bases, renewable resource potential, and infrastructure. These valleys integrate renewable fuel production, infrastructure development, such as pipelines, storage, and transport, and local demand centers. The different clusters are distributed as follows:
- Basque Country: This region is home to significant industrial activity, including the automotive and machinery sectors. Notable clusters focus on creating integrated supply chains, from electrolyzer manufacturing to hydrogen fuel cell solutions, while exploring the use of hydrogen in steelmaking and urban mobility.
- Catalonia: Led by the Barcelona Hydrogen Valley initiative, Catalonia’s cluster aims to become a Southern Europe innovation hub by combining the port of Barcelona’s logistics activities with local petrochemical industries and advanced research institutions.
- Andalusia: With strong solar and wind resources, Andalusia is emerging as a hotspot for large-scale renewable hydrogen production. Major industrial players, including refineries and maritime ports, are setting up pilot projects for green hydrogen-based fuels.
- Aragón: Centered on the city of Zaragoza, the region boasts vast wind power potential. Aragón hosts advanced pilot projects that connect wind farms to electrolyzers for local industrial consumption and potential exports.
- Castilla-La Mancha: This region benefits from ample sunshine and available land, making it attractive for large PV-powered hydrogen. Puertollano is a focal point, with the first major industrial plant by Iberdrola, integrated into local fertilizer and chemical supply chains.
By developing these hydrogen clusters, Spain seeks to leverage synergies between renewable resources, industrial consumers, and growing energy infrastructure. This model aims to reduce transport and distribution costs and fosters a self-reinforcing ecosystem in each region.
Main national offtakers & industrial demand
One of the key drivers for Spain’s hydrogen sector is the steady demand from heavy industry. In 2023, total hydrogen consumption exceeded 0.6 megatons per annum, which corresponded to nearly 8% of the European Union’s total hydrogen production (McKinsey & Company, 2024).
Historically, Spain’s refining sector has depended on large volumes of hydrogen derived from natural gas for desulfurizing fuels, which consume over 75% percent of the total national hydrogen consumption. As these refineries aim to cut their carbon footprint, substituting gray hydrogen with green hydrogen presents a logical step.
Similarly, fertilizer production, the chemical sector, and steelmaking are major consumers of hydrogen or syngas, meaning significant decarbonization opportunities for these segments.
Spain’s export potential & international demand
Spain’s export ambitions are grounded in the European Union’s rising appetite for clean hydrogen. Countries like Germany, the Netherlands, and France have established clear hydrogen import strategies to complement domestic production. Meanwhile, the decarbonization pressures on heavy industry across Europe are ramping up the demand for green molecules.
One of the most prominent infrastructure initiatives that could facilitate cross-border hydrogen flows is the H2Med pipeline. This proposed corridor would connect the Iberic Peninsula to France, and onward to Central Europe.
Thereby, enabling Spain to capitalize on its lower-cost renewable power by exporting green hydrogen to European markets. If completed as envisioned, H2Med could propel Spain into the role of a primary hydrogen exporter to northern and central European hubs.
Spain’s national policies & incentives for renewable hydrogen
Spain’s National Hydrogen Roadmap & 2030 targets
In 2020, Spain announced its National Hydrogen Roadmap, a comprehensive policy framework designed to position the country at the forefront of the emerging global hydrogen market. The Roadmap set initial targets for renewable hydrogen production, infrastructure expansion, and end-use applications, with an eye toward decarbonizing heavy industry and hard-to-abate sectors. Since its launch, the roadmap has been updated through 2023 and 2024 policy revisions, reflecting the country’s growing aspirations and aligning Spain with broader EU goals.
Central to this strategy is the 2030 target to install 4 GW, especially in the earlier drafts–which was subsequently revised upward to 12 GW of renewable electrolyzer capacity. This sizeable increase underscores the government’s acknowledgment of Spain’s vast potential in solar and wind.
Key elements of the Roadmap include integrating hydrogen use in industrial processes, establishing a network of refueling stations for heavy transport, and supporting the creation of cross-border infrastructure like the H2Med pipeline.
National incentives & funding mechanisms
To accelerate the deployment of renewable hydrogen projects, Spain has introduced several incentive programs and funding tools. One of the most significant initiatives is “Valles de Hidrógeno”, with a budget of approximately €1.2 billion dedicated to promoting regional hydrogen clusters. Through this program, Spanish authorities aim to fund large-scale electrolyzers, storage solutions, distribution networks, and end-use applications to catalyze integrated hydrogen ecosystems.
In February 2025, a provisionary list of grants was published, which could support seven projects in Aragon, Andalusia, Castile and Leon, Catalonia, and Galicia, for over 2.2GW of new electrolysis installed capacity (Matalucci & PV Magazine, 2025).
In parallel, the PERTE ERHA is another flagship funding mechanism. Part of Spain’s Recovery and Resilience Plan, this subsidy allocates substantial resources for renewable energy projects, with a notable share earmarked for green hydrogen.
This strategic plan encourages collaborations between public entities, research institutions, and private developers to drive technological innovation and reduce costs along the hydrogen value chain. This mechanism still has over €2,500 million to be assigned to new projects. However, the date for new open calls has not been published yet by the IDAE.
Additionally, the Spanish government supports public-private partnerships, recognizing that collaboration between large industrial players, technology providers, and local authorities is crucial for realizing complex, integrated hydrogen projects.
EU-level support for Spain’s hydrogen development
Key European regulations impacting Spanish hydrogen
Spain’s hydrogen roadmap and incentives are closely aligned with the European Green Deal and supporting directives, which set the broader framework for hydrogen development. Key among these is the Renewable Energy Directive, which establishes stringent sustainability and greenhouse gas reduction criteria for RFNBOs, a category that includes green hydrogen. Hence compliance with this directive is critical.
Moreover, the EU Emissions Trading System (EU ETS) exerts pressure on carbon-intensive industries to decarbonize. As the price of carbon continues to rise, switching from fossil-based hydrogen to renewable hydrogen will become increasingly attractive to refineries, steelmakers, and chemical producers.
In tandem, the EU’s “Fit for 55” package and REPowerEU plan further accelerate the push for renewable hydrogen, introducing targets to reduce greenhouse gas emissions by at least 55% by 2030 and proposing to produce 10 million tonnes of renewable hydrogen within the EU.
EU hydrogen subsidies & financial support
Beyond regulations, the European Union offers financial mechanisms that significantly enhance the bankability of Spanish hydrogen ventures. The European Hydrogen Bank is one such initiative, designed to provide funding for green hydrogen production and related infrastructure, primarily through auctions.
In the first hydrogen auction, launched in November 2023 and concluded in April 2024, seven projects across Europe were awarded a total of €720 million in subsidies, with bid prices ranging between €0.37 and €0.48 per kilogram of renewable hydrogen. Notably, Spain secured four of the seven awarded projects, highlighting its competitive edge in green hydrogen production and reinforcing its leading role in the emerging hydrogen economy.
Further reading: Key Takeaways from the first European Hydrogen Auction
Further reading: How to prepare a competitive proposal for the European Hydrogen Bank auction
For the second European Hydrogen Auction, Spanish Prime Minister Pedro Sánchez recently committed €400 million (RTVE, 2025) to support projects located in Spain that meet the qualification requirements but do not receive funding from the European Hydrogen Bank.
Conclusion
Spain is poised to lead Europe’s transition to clean energy through green hydrogen in Spain, leveraging its abundant solar and wind resources, an advanced industrial base, and ambitious government targets. With a focus on regional “hydrogen valleys,” the country is rapidly expanding from pilot plants to commercial-scale projects, aiming for 12 GW of electrolyzer capacity by 2030.
Key initiatives like “Valles de Hidrógeno” and PERTE ERHA, supported by Spain’s National Hydrogen Roadmap, encourage integrated production, storage, and use for industries such as refining, chemicals, and steel.
At the EU level, regulations like the Renewable Energy Directive and funding through the European Hydrogen Bank boost Spain’s competitive edge. By securing four out of seven projects in the first EU-wide hydrogen auction, Spain reinforces its position as a cost-effective, large-scale green hydrogen producer – a critical step toward establishing itself as a primary European hydrogen hub.
