MADRID (Reuters) – Spanish oil major Repsol has put on hold planned green hydrogen projects in Spain with an electrolysis capacity of 350 megawatts (MW) due to an unfavourable regulatory environment, a spokesperson told Reuters on Monday.
The company had already warned that regulatory uncertainty, including the possibility that a windfall tax on energy companies and banks could be redesigned and become permanent, could affect its investment in the nascent industry.
With Spain targeting 12 gigawatts (GW) of green hydrogen production capacity by the end of the decade, Repsol’s move, first reported by El Mundo newspaper, may have broader implications for the country’s green agenda.
A 100 MW project in Cartagena, with a planned investment of more than 200 million euros ($217 million) is among those put on hold, along with projects in Tarragona and the Basque country, with capacities of 150 MW and 100 MW respectively.
Repsol’s next electrolyser will be built in Portugal, the spokesperson said.
Oil companies such as Repsol and Cepsa have been among the most vocal critics of Spain’s windfall tax, which has also drawn criticism from the likes of utility Endesa.
Last year, a lobby group representing the country’s main oil companies warned that an extension of the tax could put at risk 16.5 billion euros in investments linked to the energy transition.
Green hydrogen – hydrogen produced using renewable electricity – is seen as key to decarbonising Europe’s economy. However, given its cost, green hydrogen projects in general are not competitive without subsidies.
($1 = 0.9219 euros)
(Reporting by Pietro Lombardi; Editing by Andrei Khalip and Mark Potter)
