Portugal's flagship green hydrogen project suffers setback

Portuguese energy companies Galp and EDP have decided to withdraw from the government's flagship plan to develop up to 1 GW of green hydrogen production in the port of Sines, they said on June 2.

The H2Sines project aims to supply hydrogen to help Portuguese industry decarbonise, primarily using solar energy to power electrolysers to produce the fuel from water. It is also expected to export hydrogen to the Netherlands.

"We're stepping out of H2Sines, the consortium that was planning to deliver this liquefied hydrogen to the Netherlands," Galp CEO Andy Brown told investors in a capital markets day presentation. The company will instead focus on decarbonising its own refinery in Sines, which currently produces grey hydrogen, he said.

EDP also confirmed in comments to the local press that it had concluded that "its future green hydrogen investments should be directed at other projects."

H2Sines is the centrepiece of a national hydrogen strategy unveiled by Portugal last year, which calls for $7bn to be invested in green hydrogen production over the next decade.

Galp said its decision at H2Sines did not mean it would not participate in other government-led hydrogen initiatives in Portugal. The project's other shareholders, France's Engie, Portugal's REN and Denmark's Vestas, have not announced any change in their commitments.