Portugal’s Galp moves to green hydrogen at refinery, eyes €1bn investment

Galp will be able to produce green ammonia or synthetic fuels, and as the project gains scale it could also sell green hydrogen to transport companies or highly polluting industries such as steel or cement manufacturing. [Manuel Esteban / Shutterstock]

Portugal’s Galp Energia plans to install a 100-megawatt electrolyser to power its refinery in Sines with green hydrogen by 2025, a project which could be expanded to up to 1,000 MW and be worth €1 billion, Chief Executive Andy Brown said on Monday (14 June).

He told Reuters in an interview that the refinery, located south of Lisbon, was Portugal’s biggest consumer of hydrogen from natural gas, but Galp wanted to gradually produce the zero-carbon fuel through a process of electrolysis using renewable solar energy.

Such hydrogen is now more expensive to extract than the heavily polluting conventional method of using heat and chemical reactions to release it from coal or natural gas, known as brown and grey hydrogen, respectively.

But Brown said “because of the cost of gas and the cost of CO2, at a certain point it can be profitable”.

“It’s a very exciting opportunity, we think we can profitably replace that hydrogen with green hydrogen,” he said, adding that Galp should invest “between €100 million to €200 million in the first 100 MW by 2025”.

“To fully convert the refinery to green hydrogen that will be closer to €1 billion – these are big investments,” he said, adding that much still depended on whether Europe and Portugal give the right incentives for such renewable fuels.

Galp will be able to produce green ammonia or synthetic fuels, and as the project gains scale it could also sell green hydrogen to transport companies or highly polluting industries such as steel or cement manufacturing.

In a revised strategic plan though 2025, Galp said two weeks ago it would sharpen its focus on green energy and limit fossil fuel spending to already approved developments, channelling 30% of its capital expenditure towards renewables.

The CEO said the Amorim family, which controls a holding company that owns around 33% of Galp, “seems to be very supportive of what were doing” in terms of the strategic focus.

Europe’s oil refiners outline path to climate neutrality by 2050

The European oil refining industry association, whose members includes Shell, BP, ExxonMobil and Total, outlined on Monday (15 June) a €650 billion plan to completely decarbonise transport fuels by 2050.

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