Work has started on Onuba, a major green hydrogen plant in Palos de la Frontera. With 300 MW of electrolysis and over €1 billion invested, the project marks a significant step for Spain’s energy sector.
Construction has started on Onuba, a green hydrogen plant in Palos de la Frontera, Huelva. Backed by Moeve and more than €1 billion in public investment, the facility is designed for 300 megawatts of electrolysis capacity, with the option to add another 105 MW. This makes it the largest project of its kind in Europe so far. Bloomberg and Reuters reported that the official groundbreaking took place on September 17, 2026, moving the project from planning to active construction.
Onuba is expected to produce about 45,000 tonnes of renewable hydrogen each year, which could prevent 250,000 tonnes of CO2 emissions annually. That’s roughly the same as the combined emissions from combustion vehicles in Huelva, Cádiz, and Jaén. The plant’s first phase will supply hydrogen to the local refinery, replacing fossil-based hydrogen with renewable hydrogen—a change that will be required by 2030. According to Euronews, the project is seen as a sign that high energy prices and EU subsidies are making green hydrogen more viable.
Reuters reported that Hy24 and COFIDES have agreed to acquire a combined 29% stake in the Onuba project, while Moeve retains 51%.
Onuba is just the start of a larger plan called Valle Andaluz del Hidrógeno Verde, which aims for a total of 2 gigawatts of electrolysis capacity across sites in Huelva and San Roque (Cádiz). The project includes industrial infrastructure and a dedicated photovoltaic plant to supply its own energy. Moeve has confirmed that Onuba is the first phase of this broader strategy to make Andalusia a European leader in green hydrogen production.
The economic impact is significant. Moeve estimates that more than 8,000 jobs—direct, indirect, and induced—will be created during development, construction, and commissioning. Over 400 small and medium-sized businesses and self-employed workers in the region are expected to benefit. The project’s partners also include Enagás Renovable and Alter Enersun as minority stakeholders, according to industry sources cited by Reuters.
Spanish and international media confirm that the investment decision and partnership structure for Onuba were finalized in 2026, following a lengthy preparation period. The project is now in the construction phase, not just in the announcement stage, signaling a concrete step forward for Spain's hydrogen ambitions.
The hydrogen produced at Onuba will not only decarbonize the refinery but will also be used as a feedstock for cleaner fuels in road transport, aviation, maritime sectors, and other industries looking to cut emissions. However, the price gap remains a challenge. According to Moeve’s hydrogen director, Miguel Ángel Devesa, fossil hydrogen currently costs between €1.5 and €2 per kilo, while renewable hydrogen is priced above €5. The company aims to reach price parity by 2040.
The European Union has recognized Onuba as a Project of Common Interest, unlocking €304 million in public funding from Spain’s Recovery, Transformation and Resilience Plan. Construction is scheduled to finish in less than three years, with operations expected to begin by 2029. According to La Moncloa, Prime Minister Pedro Sánchez attended the project presentation in Palos de la Frontera on September 17, 2026, highlighting its status as a strategic national industrial initiative.
The groundbreaking ceremony brought together top political figures, including Prime Minister Pedro Sánchez and Andalusian president Juanma Moreno. Sánchez emphasized the state’s role in financing and planning: “We have poured the intelligence of the General State Administration and the resources of the Next Generation funds to turn renewable hydrogen into a true national project when very few believed in it.” He noted that more than €3 billion has already been allocated to over 120 renewable hydrogen projects nationwide, with Onuba receiving over €300 million in public support.
Moreno spoke about the importance of the launch: “Today in Huelva, Spain’s first hydrogen valley begins, and we hope its second site in San Roque will follow soon. We are both expectant and enthusiastic about this extraordinary opportunity.” He also warned that enough electrical infrastructure is needed to support the region’s industrial goals.
European Commission vice president Teresa Ribera, in a recorded message, stressed the strategic importance of Onuba’s EU recognition and its role in changing the energy system. She argued that the energy transition should be seen as a chance to strengthen and modernize industry, not as a burden.
According to Google/SpainAuto, Onuba’s launch marks a clear shift in Spain’s energy priorities. The project’s size, public support, and place in the broader Valle Andaluz del Hidrógeno Verde put Andalusia in the running for European leadership in green hydrogen. The main question now is whether the region can deliver on its promises of industrial change, job creation, and price competitiveness in a sector facing growing global competition.
