Hydrogen pipeline from Spain to France to cost 2.5 bln euros, Spanish PM Sanchez says

An underwater pipeline to carry green hydrogen between Spain and France will cost about 2.5 billion euros ($2.64 billion), Spanish Prime Minister Pedro Sanchez said on Friday, adding that he hoped the European Union would partly fund the project.

An underwater pipeline to carry green hydrogen between Spain and France will cost about 2.5 billion euros ($2.64 billion), Spanish Prime Minister Pedro Sanchez said on Friday, adding that he hoped the European Union would partly fund the project. The pipeline between Barcelona and Marseille will have a capacity of 2 million tonnes a year and be ready by the end of the decade, Sanchez said at a summit of Mediterranean EU leaders in the southeastern Spanish port city of Alicante.

The decision to pursue the project comes as an energy crisis caused by the war in Ukraine has accelerated European plans to bolster renewable energy as an alternative to Russian gas. Reuters reported earlier that the undersea part of the 455-kilometre (280-mile) pipeline would cost around 2 billion euros, rising to 3 billion depending on its route, according to two sources.

An additional pipeline connecting Spain and Portugal will cost 300 million euros, a Spanish source said. The undersea section will be known as BarMar, while the entire hydrogen corridor connecting Spain and Portugal to France will be called H2MED, Sanchez confirmed.

Sanchez said that France, Spain and Portugal would apply for EU funds to pay for up to 50% of H2MED's cost. The other half would be funded by the three countries' national grids and private investors, Spanish government sources added. Green hydrogen is made from electrolysers powered by renewable energy. Portuguese Prime Minister Antonio Costa said the Iberian peninsula´s suitability for renewable energy will make producing the hydrogen competitive.

The new pipeline "comes at a particularly important moment as Russia's war against Ukraine made it clear to everyone the need to reinforce energy security in Europe," Costa told reporters in Alicante. The submarine pipeline was proposed in October as a substitute for the so-called MidCat gas pipeline project across the Pyrenees, which had been championed by Spain and Portugal who said it could relieve immediate pressure on gas supplies.

Paris opposed the plan, arguing that two existing pipelines across the Pyrenees which divide the Iberian Peninsula from France were already under-utilised. The new underwater pipeline was originally proposed to carry some natural gas as well, but will now only carry hydrogen in order to meet EU funding criteria, Costa said.

Some observers are sceptical about H2MED's chances of success, with Faig Abbasov, shipping programme director at Transport & Environment, a Brussels-based NGO, labelling it "window dressing" to reduce political tensions raised by MidCat. "If you already have an overland pipeline why build an undersea pipeline?" Abbasov said. "Spain would be better off exporting by sea." ($1 = 0.9471 euros)

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