Chinese Company Envision to Build €906 Million Green Hydrogen Factory in Andalusia

The initial details of a major corporate project announced during the Chinese tour of Spain’s Prime Minister, Pedro Sánchez, are coming to light. Sources familiar with the matter confirmed to THE OBJECTIVE that the Chinese company Envision has selected Andalusia as the location for its electrolyzer plant, where it plans to invest €906 million.

Electrolyzers are crucial in producing green hydrogen through a chemical process called electrolysis, which separates hydrogen from oxygen. The exact Andalusian province for the project has not yet been determined. Industry insiders emphasize the significant scale of the plant, which is financed by Chinese capital, and highlight its economic viability due to expected high demand. Although no similar projects of this size are anticipated in the near future, smaller-scale opportunities are likely being explored.

Andalusia was the ideal choice for the project. In fact, the first National Green Hydrogen Congress was held in Huelva in February, where over 400 companies participated. Additionally, energy company Cepsa has launched the “Andalusian Green Hydrogen Valley,” described as the most ambitious renewable hydrogen project in Spain and Europe. Moreover, Iberdrola has plans to create the largest green hydrogen hub in all of Spain in the same region.

Envision’s Interests in Spain

The new electrolyzer plant represents another investment in Spain by the Chinese company. Two years prior, in July 2022, Spain’s Ministries of Industry and Ecological Transition signed a collaboration agreement with Envision to invest €3.8 billion in three renewable energy plants. These include a battery gigafactory in Navalmoral de la Mata (Extremadura), a renewable hydrogen production plant in Alcázar de San Juan (Castilla-La Mancha), and a wind power generation and turbine assembly plant in Navas del Marqués (Castilla y León).

This investment is steadily coming to fruition. In July of this year, the groundbreaking ceremony for the Navalmoral de la Mata gigafactory took place. This €2.5 billion project, focused on lithium battery production, is expected to create 3,000 new jobs. In addition, the Castilla y León and Castilla-La Mancha plants combined account for a €1 billion investment and nearly a thousand direct jobs.

Europe’s Green Hydrogen Race

In recent years, European Union countries have been racing to lead in green hydrogen technology. Germany, for instance, presented its plan for producing electrolyzers for export during a meeting with Spanish entrepreneurs in January 2023. Germany’s Secretary of State for Economic Affairs and Climate Action, Franziska Brantner, emphasized the importance of exporting these to EU countries, including Spain. This announcement did not go unnoticed: “The Germans are smart; they want to sell us the machines,” said some attendees.

This growing demand for electrolyzers has caused delays for companies trying to obtain them. “This is a simple case of supply and demand. The surge in orders has overwhelmed production plants, which can’t keep up with requests,” industry experts frequently report. As a result, many electrolyzer manufacturers are allocating additional financial resources to ramp up production. However, insiders suggest that it will take years for these efforts to meet demand. This delay has led some industry leaders to refer to green hydrogen as a “hype.”

This critical situation underscores the significance of the agreement with Envision. “You’re not just contributing to our economy; you’re helping us build a better future,” Prime Minister Sánchez remarked during a recent meeting. He also held bilateral talks with Envision’s CEO and founder, Lei Zhang, to discuss the new investment and the progress on the Navalmoral de la Mata gigafactory.