Cepsa Aims to Lead Competitive Pricing for Green Hydrogen in Europe

Europe is striving to meet its targets in the journey to renewable energy and decarbonization as momentum in green hydrogen production gathers pace. With its abundance of solar and wind resources, Spain is aiming to position itself as the European frontrunner in green hydrogen and renewable energy. According to Cepsa, green hydrogen could soon be produced at a highly competitive price.

The Spanish government announced its Hydrogen Roadmap back in 2020. Today, Spain has already achieved its targets for green hydrogen capacity four times over. The country now has 15.5 gigawatts (GW) of capacity versus its original 2030 goal of 4 GW.

At the recent World Hydrogen Summit in Rotterdam, Carlos Barrasa, Cepsa’s commercial and clean energies director who leads on energy transition, spoke with OPIS editor Benita Dreesen. Barrasa explained the importance of ramping up domestic hydrogen production and using green shipping corridors to connect the dots between suppliers and consumers.

OPIS: What is CEPSA’s focus for the energy transition?

CEPSA: Cepsa wants to accelerate the energy transition process in Europe. Our ambition is to become a leader in renewable hydrogen and advanced biofuels production. We are currently developing 2 Gigawatts (GW) of green hydrogen at our two Energy Parks in Andalusia, southern Spain; an investment of €3 billion ($3.23 billion). We want to help create the Andalusian Green Hydrogen Valley, the largest green hydrogen hub in Europe.

Interest in green hydrogen from Northern Europe is rapidly growing, especially among the bigger industrial companies. Europe is establishing a significant level of demand as we see industry is starting to decarbonize. We need to deliver on our promises now. We have recently signed a number of partnership agreements across the hydrogen value chain.

OPIS: In this respect, you announced at the Summit the agreement with GETEC; and you called it a “natural move.” Why?

Cepsa: As from 2026 onward, Cepsa will supply green hydrogen to energy provider GETEC, for use by its European clients in various industries who need to decarbonize their industrial processes.

At Cepsa we remain focused on the production and rollout of green hydrogen and we see GETEC as a preferred partner to supply green fuel to their industrial customers across Europe.  We see the partnership with GETEC as an important and natural step in our journey to green.

OPIS: How do you plan to transport the hydrogen produced at the Andalusian Green Hydrogen Valley into Europe?

Cepsa: We expect to start the first green hydrogen exports from Spain in 2026. The green hydrogen will be exported as green ammonia, arriving at the Port of Rotterdam where hydrogen infrastructure and the ACE import Terminal are being prepared for the intake. At the port, the ammonia will be cracked into green hydrogen; from there it will be transported via pipelines and delivered to final supply points ready for use in the form that will be required by GETEC’s customers.

Cepsa signed an agreement with the Port of Rotterdam to create the first green maritime corridor between southern and northern Europe. The location of the ACE Terminal in the port of Rotterdam offers direct connection to Rotterdam’s industry and into Northwest Europe, via the planned national hydrogen network. This alliance between Cepsa and the port of Rotterdam represents the first green hydrogen corridor between southern and northern Europe.

OPIS: How important are green corridors in the development of a European hydrogen economy?

Cepsa: Green corridors are specific shipping trade routes between major port hubs with a major focus on zero-emission solutions. They are crucial to develop trade as all relevant value-chain actors such as fuel producers, cargo owners and regulatory authorities are part of the system. Additionally, green corridors create an ecosystem for policy makers who can develop targeted regulatory measures, financial incentives, and safety regulations.

In Spain we have the advantage of many hours of sunshine and plenty of space for development: we have infrastructure such as a stable electricity and gas grid, connecting Spain to the north and southern parts of Europe. And we have a stable regulatory environment.

OPIS: European hydrogen production prices are estimated at a median of €5.30 /kg; the U.S. promises a $3/kg price tag. Will Europe be competitive on an international level?

Cepsa: According to a 2022 study from Goldman Sachs, Southern Europe in particular is very attractive in terms of solar energy and low-cost production of green hydrogen. The levelized cost of hydrogen production via electrolysis in Southern Europe is rapidly becoming cheaper.

Our environmental, social and economic working practices are among the most competitive in the world today. There is a growing number of off-takers, big international companies who are talking to us because we have the logistics and these natural advantages.

Because of our excellent conditions, the viability of these projects do not depend solely on subsidies and we are aiming at the $3/kg price point.

We are building hydrogen projects in such a way that prices are competitive in the long run.

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Tags: Renewables