Spain's Moeve set to start work on green hydrogen plant this year

By Marwa Rashad

LONDON (Reuters) - Spain's decision not to extend an energy windfall tax provides the regulatory certainty, Moeve, the country's second-largest oil company, needed to start building its flagship green hydrogen project this year, the company's chief executive said.

Spain's parliament last week rejected several decrees put forward by the country's minority left-leaning government, including one to extend a 1.2% windfall tax imposed in late 2022 on energy companies with a turnover of at least 1 billion euros ($1.04 billion).

"We've had some regulatory issues in Spain around tax levels and that has slowed down the industry...putting an end to the idea of a windfall tax will allow the industry to invest," Chief Executive Maarten Wetselaar said in an interview with Reuters.

"A responsible thing to do is to kick-start industry. We would like to start building (the green hydrogen project in Huelva) this year and by 2027, we would have the first 400 megawatt (MW) (plant) in the world by 2027," Wetselaar said.

In October 2024, Wetselaar said Moeve would delay investments worth 3 billion euros in its 2 Gigawatts (GW) electrolysis plant in southern Spain if the windfall tax became permanent.

Wetselaar has been among the most vocal critics of Spain's windfall tax on energy companies' domestic sales. It had to pay 566 million euros in 2023 and 2024 for this tax.

Moeve is building the project in phases. It has a target to produce 2GW of green hydrogen from the project by 2030, he said.

"We continue to see the south of Spain as the best place in Europe to make green hydrogen and its derivatives, and since Europe is going to need a lot of this, we are in the right zip code," he added.

Owned by Abu Dhabi fund Mubadala and U.S.-based private equity firm the Carlyle Group CG.O, Moeve is investing up to 8 billion euros to shift to low carbon energy and sustainable mobility, focusing on green hydrogen, which is produced without using fossil fuels, as well as biofuels and electric mobility.

Moeve, which in Oct. 2024 rebranded from its former name, aims to make most of its profits from sustainable activities by the end of this decade.

The European Commission has set out targets to produce up to 10 million metric tons of renewable hydrogen by 2030 and import a further 10 million tons. The non-binding goals are part of the bloc's plans to end its reliance on Russian energy imports.

(Reporting by Marwa Rashad; Editing by Barbara Lewis)