Green hydrogen has entered the European energy agenda as one of the vectors destined to transform industry and heavy transport, but its actual deployment is progressing more slowly than initial forecasts. Among Million-dollar projects, regulatory requirements, and doubts about their economic viabilitySpain, and Galicia in particular, have become a good indicator of the extent to which this technology is moving from headlines to reality.
While major energy groups adjust their portfolios and international funds take positions to avoid missing out on the business, the sector faces a series of fundamental unknowns: from the high energy consumption required to produce renewable hydrogen even the difficulty of securing stable industrial clients to justify the investments. The result is a scenario in which ambitious announcements, already operational pilot projects, and a screening phase coexist, eliminating many initiatives that exist only on paper.
What is green hydrogen and why is it generating so much excitement?
When we talk about green hydrogen, we are referring to a energy vector obtained by electrolysis of waterseparating its molecules into hydrogen and oxygen using an electric current. The key for it to be considered truly renewable is that this electricity comes exclusively from sources such as wind power. Solar energy or hydraulics.
The process is carried out with electrolyzers that, powered by renewable energy, generate a fuel that during its use It does not emit carbon dioxide.However, the fact that the final consumption is clean does not automatically imply that its entire life cycle is clean, and that is where much of the current debate about its real role in the energy transition opens up.
The hydrogen map usually distinguishes three main categories: the gray hydrogenHydrogen produced from fossil fuels; blue hydrogen, which incorporates carbon capture and storage systems; and green or renewable hydrogen, which uses only clean electricity. Of the three, only the latter aligns with Europe's medium- and long-term climate neutrality goals.
On paper, renewable hydrogen is destined to be an important piece in the decarbonization of industrial sectors that are difficult to electrifyas the the steelHeavy chemicals and certain refining activities, as well as heavy road transport and some maritime transport, are examples of energy storage systems. It can also act as a seasonal energy storage system, harnessing renewable surpluses and releasing electricity or heat when demand requires it.
The major energy and technical challenges of green hydrogen
Beyond its potential benefits, experts and analysts emphasize that the path is far from clear. One of the critical points is that The overall energy balance of green hydrogen remains very demanding.To produce, store, transport and use it today requires more energy than is ultimately recovered in many cases.
Currently, the energy required to separate hydrogen from other elements and make its large-scale use viable remains very high. Globally, more than 100 million barrels of oil per dayOf which around two-thirds are used for transport, according to the International Energy Agency. Replacing a significant portion of that volume with renewable hydrogen would require multiplying installed renewable generation capacity and undertaking a colossal investment effort.
Furthermore, hydrogen gas itself poses significant physical challenges. It is an element of low density, highly flammable and corrosivewhose molecules tend to escape through the smallest crack. To keep it in a liquid state, temperatures close to -253 °C are needed, which complicates and increases the cost of both its storage and long-distance transport.
Another aspect that worries part of the scientific community is the origin of the energy and materials needed to build all the associated infrastructure: from the manufacture of wind turbines, solar panels and PEM electrolyzers including power grids and water treatment plants. To a large extent, these processes still rely on fossil fuels, raising questions about the true energy and climate balance of certain projects.
In practice, many analyses agree that, to this day, the initial “energy debt” of the hydrogen cycle —all the energy invested in its production and handling— It even surpasses the "credit" that is recovered when it is usedThis reality necessitates extreme caution when considering green hydrogen as a universal solution and reinforces the idea of reserving it for uses where there are no more efficient alternatives.
Spain as a future European green hydrogen hub
Alongside these technical discussions, Spain has set itself the goal of becoming a major hub for the production and export of renewable hydrogen towards the rest of Europe. The combination of solar and wind resources, along with already consolidated gas infrastructure and a strategic geographical position, puts the country in an advantageous position.
However, recent experience shows that the leap towards full energy independence is far from complete. Despite the strong deployment of renewables in the last two decades, the Spain's external energy dependence still hovers around 69%.This is only eight points lower than in 2004 and about twenty points above the European average. Gas and oil still account for nearly 70% of energy consumption, with transport and much of industry highly vulnerable to geopolitical tensions.
In this context, green hydrogen is presented as one of the ways to reduce fossil fuel imports, provided it can be efficiently integrated into industrial processes and mobility systems. At the same time, the European Union is promoting major corridors such as H2Med, designed to channel renewable hydrogen from the Iberian Peninsula to France and other EU markets.
The development of these corridors and hydrogen valleys scattered across Spain relies heavily on European funding and the arrival of large, specialized international investors. This mix of local and global capital is redefining the sector's business landscape and influencing the pace at which projects can progress.
The new phase of Enagás Renovable and the entry of Hy24
One of the most significant corporate moves in recent months has been the reconfiguration of the shareholding of Enagás RenovableThe company, which has a broad portfolio of green hydrogen and biomethane projects in Spain, has made the change in line with the regulatory requirements of new European legislation, which mandates a clearer separation between gas transportation and energy production activities.
In this adjustment, Enagás has reduced its stake in the renewable energy subsidiary to 20%, while the investment platform Hy24 has taken control of 80% of the capitalTo this end, it acquired a 40% stake in Enagás and two 5% stakes each in Navantia and Pontegadea, Amancio Ortega's investment arm. This move allows the company to comply with EU regulations and, at the same time, strengthen its financial position for the next investment cycle.
Hy24, backed by the French fund Ardian and FiveT Hydrogen, has positioned itself as the world's largest hydrogen infrastructure investment platformIts acquisition of a stake in Enagás Renovable aims to facilitate access to financing and expedite decision-making in complex projects, where speed in securing permits, partners and customers can make the difference compared to other markets.
The joint plan envisions an investment of around 2.000 billion euros in green hydrogen projects In Spain, this includes up to an additional €450 million for the development of a dozen biomethane plants. Specifically within the renewable hydrogen sector, the portfolio comprises approximately 1.200 MW of electrolysis capacity, including both company-owned and partner projects.
The roadmap sets the goal of reaching 2030 with 250 MW of operational electrolyzer capacity and some 800 million in mobilized investment. From that date, the aim is to complete the deployment of the rest of the portfolio, add another 600 MW and raise the accumulated investment effort to over 2.000 billion, always depending on the evolution of demand and the regulatory environment.
Featured projects in Spain: from pilot projects to mega-facilities
Enagás Renovable and its partners have a project underway a dozen projects linked to green hydrogen in different stages of development, with a special emphasis on the decarbonization of large industrial hubs. Overall, the first wave of initiatives alone is expected to generate 250 MW of associated renewable energy and attract nearly €800 million in investments by 2030.
In the section of projects under construction, the company adds more than 410 MW of power in locations with high energy demand. Among the largest are the Onuba plant in Huelva, with 300 MW, and the facility of [unclear], with another 100 MW, mainly aimed at replacing gray hydrogen currently used in petrochemical plants and refineries.
In addition to these mega-facilities, the company already operates a pilot project in Mallorca that has become a benchmark for measuring the potential of green hydrogen in island environments. The experience gained at this plant serves as a basis for future replication both within and outside the European Union, especially in regions with limitations in conventional energy supply.
In parallel, the firm is involved in other projects related to the production of synthetic fuels and mobility solutions In locations such as Bilbao, Cartagena, and Huelva, in partnership with groups like Repsol, Petronor, and Moeve. The idea is to combine hydrogen production with its direct use in industrial processes and transport fleets, thus closing a loop that allows for emissions reductions throughout the entire value chain.
The success of this strategy will largely depend on the ability to secure long-term purchase agreements with industry, ensuring stable revenue and justifying investment in electrolyzers, associated renewables, and distribution networks. Without this anchored demand, many of these hydrogen valleys could remain in preliminary stages longer than anticipated.
The green hydrogen pilot project in Mallorca
The renewable hydrogen plant in Mallorca, launched in 2022, was one of the first projects in Spain to receive direct funding from the European Commissionwith a grant of 10 million euros on a total planned investment of around 50 million. The objective was to test the entire value chain in a real-world environment: renewable generation, hydrogen production, distribution, and different end uses.
The facility, located on the site of Cemex's former industrial premises in Lloseta, is part of the reindustrialization agreement reached after the closure of the cement plant. 2,5 MW capacityThis is a relatively small project, but sufficient to demonstrate the technical and economic performance of this type of infrastructure on an island.
The development has not been without setbacks. Technical problems in the design of the electrolyzer forced temporarily interrupt the activityThe project resumed in 2024 once the issues were resolved. Despite this, the plant remains a relevant testing ground for future investments, both in the Balearic Islands and in other archipelagos or isolated territories.
The uses of hydrogen produced in Mallorca are spread across several fronts. A fraction is injected directly into the natural gas distribution network on the island, contributing to the decarbonization of domestic and industrial consumption by mixing it with conventional gas. Another portion is used to fuel a fleet of five EMT buses in Palma, which became the city's first hydrogen-powered public transport vehicles.
In addition, the plant serves to supply hydrogen to fuel cells that generate electricity and heat for a hotel in Palma, with plans to also serve a similar facility at a port terminal. The project design is intended to be scalable and replicable, with the participation of companies such as Acciona, Redexis, and Calvera, as well as various institutions and research centers.
Galicia: from the boom in announcements to the screening of green hydrogen projects
If there is one autonomous community that perfectly illustrates the shift towards green hydrogen, it is Galicia. In recent years, production has reached Submit up to 30 initiatives related to renewable hydrogen, with an estimated aggregate investment of around 2.100 billion euros, according to the Galician Hydrogen Association (AGH2).
Galicia's appeal is no accident. The region boasts abundant water and wind resourcesA high percentage of renewable electricity generation—approximately 84,6% of the energy produced is from clean sources—and a strategic location on the North Atlantic shipping routes. Added to this is the availability of industrial land in redevelopment areas such as As Pontes and Meirama, and the existence of ports like A Coruña, Ferrol, and Vigo with the potential to become hydrogen logistics hubs.
However, the first quarterly report from the Galician Hydrogen Observatory, promoted by AGH2 and the Galician Energy Institute (INEGA), confirms that the sector has gone from a phase from strong media push to a stage of maturationThe key is no longer so much announcing new projects as demonstrating their real viability. At the end of the first quarter of 2026, only six initiatives were still undergoing active administrative processing.
This adjustment means that barely a 20% of the initial proposals It has passed the scrutiny imposed by the market, regulatory requirements, and the difficulty in securing financing. The companies that are moving forward with their plans are primarily Ignis, Repsol, the H2Pole alliance, Accionaplug, Tasga, and Statkraft, each with projects in different parts of Galicia.
The Observatory emphasizes that this concentration is not an isolated phenomenon, but rather follows a pattern similar to that observed throughout Spain and Europe: an evolution from the proliferation of advertisements towards a selection of initiatives with greater technical strength and bankable business modelsThe big challenge now is to translate these ideas into final investment decisions and firm supply contracts with the industry.
The six green hydrogen projects that are still alive in Galicia
Among the initiatives that are still being processed, the project of Accionaplug in Morás (Arteixo)The project involves a 20 MW plant with the capacity to produce approximately 2.990 tons of green hydrogen annually. This development has just received a favorable Environmental Impact Statement (EIS) and is awaiting Integrated Environmental Authorization to proceed.
Another of the key projects is H2PoleInitially promoted by Reganosa and EDP Renováveis in As Pontes, this project, with an estimated production of around 15.000-16.000 tons of hydrogen per year and an investment of approximately 156 million euros, is one of the most advanced infrastructures in Galicia and is destined to play a significant role in the region's energy transition.
In Begonte, Iberdrola and Foresa are promoting Green MeigaThe project, focused on the production of green methanol, aims to bring approximately 100.000 tons of this synthetic fuel to market annually. It has an estimated budget of €500 million and is expected to be operational by around 2027, subject to the availability of permits and financing.
The project also stands out TriskelionThis project, linked to Forestal del Atlántico and also focused on e-methanol production in the As Pontes area, has been recognized as strategic by the European Commission to expedite its processing and facilitate access to public funds. This development is part of the Valdo Eume initiative, designed to revitalize the area following the closure of the thermal power plant.
The list is completed by H2 Valley A Coruña, led by Ignis and with a planned capacity of around 251,8 MW and an investment of around 170 million euros with state support, as well as Julio VerneThe first green hydrogen plant in a Galician port (Vigo), with a capacity of 2 MW and an investment of 4,5 million euros. This plant has a strong demonstration and logistical component, as it is located in a key area for maritime traffic.
European funding, industrial demand and new regulations
Despite this set of advanced projects, Galicia faces a structural financial weakness compared to other Spanish regions. None of its initiatives have been selected within the European IPCEI Hy2Use program, which channels direct aid to large hydrogen projects, leaving the community at a disadvantage compared to territories such as the Basque Country, Asturias or Andalusia, which have secured part of that funding.
The survival of Galician projects now rests, to a large extent, on their ability to attract resources in specific calls for proposals such as the second round of the European Hydrogen Bank, managed in Spain by IDAE and endowed with 440,5 million euros, as well as in the lines of the European partnership Clean Hydrogen under the umbrella of Horizon Europe, whose current deadline expires in mid-April 2026.
The Observatory's report also highlights the impact of Royal Decree 149 / 2026The law, approved in February, tightens the technical and financial requirements for renewable hydrogen projects. The intention is to ensure that initiatives progressing to the construction phase are not driven solely by speculative expectations, but are backed by clear industrial demand and the capacity to contribute effectively to decarbonization.
At this point, one of the main bottlenecks is precisely the lack of long-term purchase agreements (offtake) with industrial consumers. Unlike other areas with a high concentration of large factories, in Galicia the potential demand for hydrogen remains diffuse, which hinders the securing of the bank and private financing necessary to give the final green light to investments.
The Observatory emphasizes that, for Galician projects to complete the permitting process and reach the construction phase, it is essential to consolidate robust business models, finalize supply contracts, and make progress in improving the electricity grid—a factor that conditions the development of several initiatives. The second quarter of 2026 will be marked by the progress of these projects and by the resolutions of the European funding calls.
Looking at Spain and Europe as a whole, green hydrogen is at a point of transition in which Big promises are starting to be measured against stricter parameters of profitability, efficiency, and climate utilityProjects like the pilot in Mallorca, the industrial valleys on the Iberian Peninsula, and the initiatives in Galicia will serve to test the extent to which this technology can fulfill its intended role in decarbonization plans. The key will be combining ambition with realism, ensuring that every euro invested in hydrogen effectively contributes to reducing emissions and strengthening energy security without losing sight of its current technical and energy limitations.
