London-based oil and gas giant bp has taken a final investment decision (FID) on the green hydrogen project at its Castellon refinery in Spain.

“At Castellon, together with our joint venture partner, we are taking our first FID to develop and produce industrial scale green hydrogen at our Castellon refinery,” BP ceo Murray Auchincloss said Tuesday during the company’s second-quarter results presentation.

Called HyVal, the joint venture project is being developed with Spanish renewables giant Iberdrola. While announcing the project last February, bp said it would invest €2 billion ($2.2 billion) on the project to reach 2 gigawatts of electrolyser capacity by 2030. The first phase of the project, for a capacity of 200 megawatts, was expected to be operational by 2027, the company said at the time.

However, a bp spokesperson told Kallanish the company has taken FID only for an initial stage of 25 megawatts. While bp has not disclosed when the initial stage will be operational and how much it will cost, the spokesperson notes the initial investment is "nowhere near" €2 billion.

BP also plans to take a FID on a 100-megawatt green hydrogen project at its Lingen refinery in Germany by the end of this year, the company ceo adds. The project has been recognised as an Important Project of Common European Interest (IPCEI), making it eligible for state aid.

Both projects are expected to help the company not only replace grey hydrogen in its operations but also produce both green hydrogen and sustainable aviation fuels (SAFs) for customers.

Meanwhile, during an earnings call on Tuesday, Auchincloss said the company is “focussing hydrogen down.”

“We'd chase 30 different opportunities in the past,” the ceo notes. “We're now thinking about what can we actually construct..that's where we focussed it down, where we think we'll build five to 10 [plants] this decade.”

BP’s announcement comes after its rival Shell last week announced FID on its 100-MW green hydrogen project in Germany.