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COP28: Cepsa, C2X eye €1B investment in green methanol plant at Huelva, Spain

December 3, 2023
Energy & Chemical Value Chain

Cepsa SA (Madrid) has agreed a deal with C2X, an independent firm owned by AP Moller Holding with AP Moller-Maersk as minority owner, to develop a 300,000 metric tons per year renewable methanol plant at Huelva, Spain.

A final investment decision (FID), for around €1 billion, is expected in 2025, Cepsa said today in an announcement made in the presence of Spain’s prime minister, Pedro Sánchez, at the UN Climate Change Conference, or COP28, in Dubai. The green methanol plant’s capacity could increase to 380,000 metric tons per year, it said.

The project would form part of the Andalusian Green Hydrogen Valley, to which Cepsa’s two existing refineries at Huelva and Algeciras, with combined capacity of 460,000 b/d, are central. It would use green hydrogen and nonfossil sources of carbon captured from the atmosphere or from agricultural and forestry waste to produce green methanol to be sold to hard-to-abate industries such as long-distance shipping and other industries such as chemicals and plastics.

The green methanol plant would prevent the emission of up to 1 million metric tons of CO2, according to Cepsa. The company is targeting 2 GW of green hydrogen electrolyzer capacity in Spain by 2030. Some of that green hydrogen produced would supply the new methanol facility.

The partnership between Cepsa and C2X follows a protocol of collaboration agreed between AP Moller-Maersk and the government of Spain in November 2022 to explore the possibilities of producing green fuels in the country. This partnership is also in line with the declarations made at governmental level by Spain and Denmark to increase their bilateral cooperation in green energy transition.

Platts, part of S&P Global Commodity Insights, assessed the cost of producing renewable hydrogen via PEM electrolysis in Europe at €6.3582 per kilogram Nov. 30 (Netherlands, including capital expenditure), based on month-ahead power prices.

by Gianluca Baratti, S&P Global Commodity Insights


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