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Spanish energy company, Cepsa, is advocating for the swift implementation of policies aimed at fostering demand and expediting the development of critical infrastructure in the clean hydrogen sector. With an investment exceeding 3 billion euros, Cepsa is strategically positioning itself to establish Europe’s largest clean hydrogen hub. This is coupled with an additional 2 billion euros allocated for solar and wind facilities in southern Spain. These endeavors leverage prime locations on the Mediterranean and Atlantic, facilitating exportation to northern Europe.

Maarten Wetselaar, CEO of Cepsa, asserts that governmental intervention is necessary for the hydrogen industry to achieve autonomous growth. Proactive policies and reforms are imperative. Anticipating the upcoming COP28 meeting, he underscores the need for these issues to be integral discussions among world leaders. COP28 will be held in early December. The energy summit will deliberate on the global climate agenda and strategies for transitioning economies away from fossil fuels.

Moreover, Wetselaar highlighted the substantial investments made by Europe and the U.S. in clean hydrogen industries. He draws attention to the Inflation Reduction Act in the U.S., offering substantial production tax credits. The aim is to stimulate the production of 10 million metric tons of clean hydrogen by 2030.

Meanwhile, the European Union supports low-carbon technologies through the 40-billion-euro Innovation Fund and the European Hydrogen Bank. Thus, it aligns with a goal to produce 10 million tons of renewable hydrogen annually by 2030.

Cepsa's Clean Hydrogen Vision
Source: International Energy Agency Global Hydrogen Review 2022

Furthermore, Wetselaar emphasizes the critical balance between supply and demand, advocating for a nuanced approach that prioritizes creating demand over supply subsidies. He argues that raising carbon costs and implementing consumption mandates can achieve demand stimulation. He cited the European Commission’s ‘Fit for 55’ legislation package and the ReFuelEU proposal targeting Sustainable Aviation Fuels as examples.

While acknowledging the importance of subsidies, Wetselaar underscores the need for a comprehensive regulatory framework and reliable offtake mechanisms. He also underscores the necessity for governments to facilitate the development of essential infrastructure, including pipelines and production facilities, crucial for the clean hydrogen economy to thrive.

Despite the challenges, Cepsa remains resolute in its vision to be a green molecule leader in Europe before 2030. Wetselaar envisions significant scaling up of production, with plans to build two new plants with a total capacity of 2GW producing up to 300,000 tons of clean hydrogen in Campo de Gibraltar (Cadiz) and Palos de la Frontera (Huelva) by 2028. Looking ahead, Cepsa aims to double or even triple this capacity in the early 2030s, marking a radical transformation from its starting point just a year ago.

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