BP proceeds with its hydrogen fuel strategy in Australia

Despite struggles in the market, the energy giant plans to push ahead with its projects

Last month, BP and Iberdrola green lighted the construction of a 25 MW green hydrogen fuel project.  The project is being built at BP’s Castellón refinery.

The new facility is expected to go online in the late part of 2026

The partnership between BP and Iberdrola represents the first time that they companies have undertaken a venture under the Castellón Green Hydrogen fuel joint venture they had already started.  The project officially had its start at a ceremony that placed the spotlight on the final investment decision signing between the companies in July 2024. That investment also involves collaboration with the Technology Institute of Energy (ITE). The project involved securing €15 million (about US$16.3 million) of Spanish Recovery, Transformation and Resilience Plan funding via the NexGenerationEU program in the European Union. The funding was provided by way of the Innovative Value Chain and Renewable Hydrogen Knowledge initiative.

A key component of its investments into its hydrogen fuel business and commitment

BP views the project as a key investment into its H2 business as well as its high-value project selection commitment. BP has especially seen the value of investment into H2 while the Albanese government has promised huge financial support in converting Australia into a top green H2 supplier. The company has therefore used this opportunity to establish itself at the ground floor of a market while the rest of the world increases its efforts to decarbonize in the face of a battle against climate change. BP is placing its support behind projects taking place in Australia, but also in the United States, Germany, Great Britain, and Spain.  The goal is to make sure that it is already established at the time when hydrogen fuel demand spikes in its “crucial role” in the decarbonization of sectors that are otherwise difficult to cleanly power and that currently depend heavily on fossil fuels.  These include areas such as mining, minerals processing, and heavy manufacturing.

Other potential uses for H2

Among other applications, BP is also focused on the usefulness of hydrogen fuel in storing green energy, with the possibility for making exports possible through the use of specialized shipping. In this, BP is far from alone. For instance, Provaris Energy Ltd. is currently working on the development of its own proprietary gaseous H2 containment tank that will be used for storage solutions in carriers. The H2Neo designs currently involve a 430-ton capacity, while the H2Max will have a 2,000-ton capacity, and the H2Leo will be a storage barge with a capacity of between 300 and 600 metric tons.  Those vessels are already all on their way to receiving their final marine classification and approval as they undergo comprehensive safety studies.

BP renewable hydrogen fuel projects

A spokesperson from BP placed the spotlight on the focus the company is maintaining specifically on green hydrogen fuel. The investment the company is making into H2 isn’t just into a fuel that can be used without producing greenhouse gasses including carbon emissions. Instead, it is working on producing H2 using water electrolyzers powered by renewable electricity. In this way, not only is the fuel itself carbon-free, but so is its production.  This differs from the way the majority of H2 is currently made, which is “gray” hydrogen. Those methods involve the use of fossil fuels with unabated carbon emissions.

Three primary H2 projects in Australia

BP is currently focused on three main green hydrogen fuel projects in Australia.  These include the Australian Renewable Energy Hub, a massive wind and solar initiative in Geraldton, and the H2Kwinana hydrogen hub at its former Perth oil refinery location.