Europe’s push to decarbonize refining is increasingly shifting from policy targets to physical assets, with Plug Power completing the installation of 100 megawatts of PEM electrolyzers at Galp’s Sines refinery in Portugal.
The project ranks among the largest renewable hydrogen deployments announced for a European refinery to date, but its significance lies less in headline capacity and more in what it reveals about the pace, limits, and economics of industrial-scale green hydrogen integration.
The Sines project has progressed from its initial announcement in October 2025 to full on-site installation of ten 10 MW GenEco electrolyzer arrays, a timeline that reflects improving execution capabilities for large PEM systems. Commissioning is expected to begin in the coming months, a phase that will be closely watched by both policymakers and industrial buyers, as operational performance often diverges from nameplate assumptions once systems move beyond installation.
Once fully operational, the electrolyzers are expected to produce up to 15,000 metric tons of renewable hydrogen per year. Galp plans to use this output to replace roughly 20 percent of the refinery’s existing grey hydrogen consumption, a partial substitution that highlights a structural constraint facing most refinery-based hydrogen projects. Even at 100 MW, renewable hydrogen remains a supplement rather than a full replacement, constrained by electricity supply, system efficiency, and delivered cost.
Plug and Galp estimate that the project could reduce refinery greenhouse gas emissions by around 110,000 metric tons of CO2 equivalent annually, covering Scope 1 and 2 emissions. While material, this reduction underscores the incremental nature of hydrogen-driven decarbonization in refining. Deep emissions cuts would require either substantially larger electrolyzer capacity, access to lower-cost renewable power, or complementary measures such as carbon capture, each carrying its own cost and infrastructure implications.
From a technical perspective, the Sines installation demonstrates the growing maturity of modular PEM electrolyzer deployment at scale. Plug’s GenEco systems rely on a transatlantic supply chain spanning the U.S. and Europe, reflecting how electrolyzer manufacturing has become globally distributed even as policymakers emphasize energy sovereignty. This integration may support scalability, but it also exposes projects to supply chain risks and cost pressures that remain sensitive to currency, trade policy, and manufacturing yields.
The project also highlights Europe’s continued reliance on refinery-based anchor customers to justify early large-scale hydrogen investments. Refineries offer stable, on-site hydrogen demand and existing infrastructure, reducing offtake risk compared with emerging sectors such as shipping fuels or hydrogen-based steel. At the same time, this dependence limits market expansion, as refinery demand alone is unlikely to absorb the multi-gigawatt electrolyzer capacity implied by European hydrogen strategies.
Plug has positioned the Sines project within a broader European expansion strategy, pointing to multi-gigawatt opportunities across Spain, the U.K., and other markets. Yet the gap between installed capacity and bankable demand remains a central challenge. Many announced projects still hinge on public subsidies, carbon price assumptions, or regulatory mandates rather than purely commercial economics, particularly as renewable power prices fluctuate and grid constraints tighten.
For Galp, the project aligns with longer-term plans to develop low-carbon fuels for sectors that are difficult to electrify. Hydrogen production at Sines may eventually support downstream fuels such as renewable ammonia or synthetic hydrocarbons, but those pathways depend on additional investment and policy clarity. For now, the refinery application serves as a controlled environment to test operational reliability, cost structures, and emissions accounting under real industrial conditions.
