© Moeve

Spanish energy company Moeve began construction on Thursday of the first 300MW phase of Project Onuba at Palos de la Frontera, Huelva, which it says is the largest green hydrogen facility to reach this stage in Spain and southern Europe.

Public money and mandates underpin the build-out

Europe’s green hydrogen sector has been marked by delayed final investment decisions and cancelled projects, as production costs remain well above those of hydrogen made from natural gas. Onuba is moving ahead with substantial public backing. The Spanish government has provided €304mn through NextGenerationEU, the EU’s post-Covid recovery fund, and the project has been designated a Project of Common Interest by the EU.

Cost, capacity and timeline

Moeve puts the joint investment at more than €1bn ($1.1bn), including associated infrastructure and a dedicated solar plant for self-consumption. It took a final investment decision on the 300MW phase in March and ordered alkaline electrolysers, which split water into hydrogen and oxygen using electricity, from Thyssenkrupp Nucera the same month. Commercial operations are expected in 2029.

The plant is expected to produce about 45,000 tonnes of hydrogen a year, which will be used on-site at Moeve’s La Rábida refinery. At full capacity, that would entirely replace the refinery’s grey hydrogen, which is made from natural gas without carbon capture. Moeve says this would avoid about 250,000 tonnes of CO2 a year.

Ownership and further phases

Moeve holds 51% of Onuba. Hy24, a hydrogen-focused investment manager, and Spanish state-backed finance institution Cofides took a combined 29% stake on Wednesday. The remaining 20% is held by Enagás Renovable, which is 80% owned by Hy24, and solar developer Alter Enersun.

A 105MW extension remains an option, and one source describes it as conditional on securing more electricity-grid capacity. The wider Andalusian Green Hydrogen Valley targets 2GW across Moeve’s sites in Huelva and San Roque, Cádiz. The €304mn grant is meant to support 405MW within the valley, which matches the 300MW phase plus the extension.

Political backing

Prime Minister Pedro Sánchez, who attended the event, said the government has allocated more than €3bn to over 120 renewable hydrogen projects and introduced mandatory minimum targets for renewable fuels across transport modes. He said the aim is “to provide investment certainty”. European Commission Executive Vice-President Teresa Ribera said the energy transition “should not be viewed as a cost to industry, but as an opportunity”.

Implications for investors and policymakers

Onuba is a test of whether mandated demand and grant funding can carry a large project to construction. With output consumed at a refinery, the plant avoids the need for new hydrogen pipelines or storage, and Moeve says the hydrogen will also help produce cleaner fuels for road, aviation and shipping. Its economics still depend on subsidies and on the grid connection needed for any expansion.

Moeve is also building a second-generation biofuels unit at La Rábida, due to start producing sustainable aviation fuel and renewable diesel next year, and says its total energy transition investment in Andalusia is €2.4bn. Moeve also cites a report it co-produced with PwC, which says green molecules could halve Europe’s external energy dependence by 2040. That figure comes from a company-commissioned study and has not been independently verified.