Nov-2023

Andalusian green hydrogen valley

The industry is focused on decarbonisation and the energy transition, with emission reduction targets to hit in 2030 and 2050.

H2 Business Unit
Cepsa

Article Summary

Cepsa is working to deliver its ‘Positive Motion’ pledge to decarbonise all its businesses, reduce Scope 1 and 2 emissions by 55%, reduce the carbon intensity of its products (Scope 3) by 15-20% by 2030, and achieve net zero CO₂ emissions by 2050. We will help our industrial partners and transport customers decarbonise internationally, making us an industry leader in the energy transition.

Since the 1990s, the European Union (EU) has promoted the development of renewable energies through legislative acts such as Directive 2018/2001/EU (RED II), which defines the objectives of the Union’s energy policies in the field of renewable energies and decarbonisation of various sectors (such as industry and transport). Subsequently, a range of related policies and legislative instruments have been proposed, revised, and approved.

The European Green Deal, a package of initiatives to achieve net zero greenhouse gas (GHG) emissions by 2050, puts the emphasis on the adoption of renewable fuels such as hydrogen in industry and transport, with the objective of mitigating the effects of climate change. A year later, despite the tremendous impact of the COVID-19 pandemic, where the EU had to take important measures in energy matters, it launched the Hydrogen Roadmap, making hydrogen a central axis of the European decarbonisation plan. With the aim of further strengthening energy policies, the Commission published a new energy legislative package, Fit For 55, setting ambitious targets and tools to reduce GHG emissions to at least 55% below 1990 levels by 2030. The Commission also introduced national targets for renewable energy and mandatory targets to decarbonise and diversify the transport sector, with the aim of reducing the GHG intensity of carbon fuels by using quotas for renewable fuels such as biofuels and renewable fuels of non-biological origin (RFNBO) by 2030.

After Russia’s invasion of Ukraine, the EU decided to accelerate the energy transition, increasing the targets for the share of renewable energy in the EU mix, including the production of 10 million tons of domestic hydrogen, with imports of another 10 million tons by 2030, and targets for production and supply of RFNBOs in industry and transport under the RePower EU strategy.

The increase in the production of renewable hydrogen in member countries represents a unique opportunity to begin the design of a European environment characterised by the security of energy supply and, in particular its application in sectors that are difficult to electrify.

Since then, regulatory development at the European level has increased exponentially, resulting in a regulatory network with clear objectives in each sector, such as aviation (ReFuel Aviation), maritime (FuelEU Maritime), Alternative Fuel Infrastructures (AFIR) Regulations, and an improved ETS (Emission Trading System).

At the national level, the percentages and minimums required in the regulation are mandatory, so EU Member States must implement the regulations within the established timelines.

Cepsa is an integrated energy company active in all phases of the oil and energy value chain, with a worldwide presence. It is the second largest consumer of hydrogen in Spain due to its internal demand in the refinery and chemicals activities. It is located in the Energy Parks (EP) of La Rábida (Huelva) and San Roque (Algeciras), where the main objective is to produce fuel for all transportation sectors. In addition, the company has extensive experience in projects and the operation of small- and medium-scale hydrogen technologies in safe industrial environments and the development of sustainable fuels:
• Cepsa has been producing biofuels in its refineries for more than 10 years and is carrying out pioneering studies worldwide to convert waste and used oils into renewable fuels.
• Cepsa is now using the experience gained in the production of biofuels to take the first steps towards the implementation of the Andalusian Green Hydrogen

Valley in an environment with a high potential for the consumption of renewable hydrogen.
Spain is well-placed to be a leader in the production of renewable hydrogen, as it is blessed with abundant solar and wind energy. Cepsa’s two Energy Parks are in southern Spain, where truly competitive renewable energy prices can be achieved.

Andalusian Green Hydrogen Valley
In December 2022, Cepsa announced its commitment to develop a 2GW electrolysis project in the Andalusian Green Hydrogen Valley, with two clusters in the highly industrialised areas of southern Spain: Huelva and Algeciras (see Figure 1). This situation will allow the development of a knowledge axis around renewable hydrogen, which will benefit from economies of scale through the construction of high-capacity renewable hydrogen electrolysers and the development of an integrated value chain, culminating in supply to various industries (fertilisers and others) and other economic sectors such as transport (maritime, aviation, and road transport).
• Huelva’s Onuba Project seeks to decarbonise the facilities within the La Rábida Energy Park together with neighbouring industries, starting with the installation of 400 MW of electrolyser capacity (with a plan to increase up to 1GW as alliances with new partners are materialised). As well as decarbonising our operations by reducing our Scope 1 and 2 GHG emissions, we are reducing Scope 3 emissions for our clients via the decarbonisation of transport fuels and fertilisers.
The project has already resulted in a collaboration between Cepsa and important partners such as Enagás Renovable, Alter Enersun, and Fertiberia. Together with Fertiberia, a leader in the development of sustainable and high-added solutions for agriculture, green ammonia will be produced from the implementation of renewable hydrogen by electrolysis. The Onuba Project will also meet other emerging demands, including:
• Decarbonisation of our Energy Park and new internal projects, including a new hydrogenated vegetable oil (HVO) plant, to be developed together with Bio-Oils (an Apical company) for the production of decarbonised diesel-like fuels.
• Road passenger transport through an agreement with Damas, a national road transport company, to promote sustainable mobility using renewable hydrogen as a fuel. The agreement aspires to contribute to the necessary technological development to promote the introduction of renewable hydrogen for use in public transport and heavy-duty vehicles.
• Conversations to develop e-methanol are also ongoing.
In summary, two key products will be at the core of the current project: green ammonia and HVO fuels (biodiesel and biojet) for heavy road transport and aviation.

These HVO fuels, known as sustainable aviation fuel (SAF), are key for the decarbonisation of the aviation sector, where agreements have already been signed with airlines, including Air Nostrum, Binter, Ryanair, TUI, and Vueling.
• Algeciras’ CARTEIA Project seeks the construction of a 1 GW capacity electrolysis plant for the decarbonisation of the EP and the production of renewable hydrogen to be used to decarbonise hard-to-abate sectors, specifically, the maritime transport and fertiliser sectors. An agreement with EDP Renewables was signed in 2022 to collaborate in the development of the electrolysis capacity.
The renewable hydrogen produced will feed the new green ammonia plant to be built jointly by Yara Clean Ammonia and Cepsa. This ammonia plant will have an annual production capacity of up to 600,000 tons.