Spanish oil firm Repsol has significantly reduced its green hydrogen capacity ambitions, citing scepticism over market adoption and economic viability.
The company’s CEO, Josu Jon Imaz, told investors last week (February 20) that Repsol’s initial aim for 1.9GW of installed renewable hydrogen capacity by 2030 had been reduced to between 700MW and 1.2GW.
H2 View understands that 350MW of hydrogen production will come from biomethane reforming at refineries to reduce the need for additional investment in electrolysis.
Imaz shared concerns about the feasibility of hydrogen adoption in industries such as steel, cement, paper and chemicals, and therefore, Respol is “phasing down dramatically [its] hydrogen investment and expectation.”
“We are reducing the installed capacity that we announced four years ago,” explained Imaz. “We are going from 1.9GW to something between 700MW and 1.2GW in 2030.
“350MW won’t come from investments, but from biomethane that is going to be transformed in the reformers of our refinery.”
Repsol’s 2024 financial statement revealed a net income of €1.75 billion, marking a 45% decline from 2023, while adjusted income also fell 34% to €3.3 billion.
In response, the company plans to limit net investments to €4 billion in 2025, down from €5.7 billion in 2024, reflecting a more cautious capital allocation strategy. This shift is evident in the reduction of its hydrogen capacity ambitions.
Last October, Repsol halted its three planned green hydrogen projects in Spain after the Spanish government extended its windfall tax on energy companies.
Read more: Repsol puts the brakes on 350MW of green hydrogen plants in Spain
However, in November 2024, the government scrapped the permanent windfall tax on energy firms, opting to extend it only for banks for another three years.
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