CyLH2 Valley, the European Union-funded initiative to establish a large-scale Hydrogen Valley in the Castilla y León (CyL) region of north-western Spain, is making steady progress across its different areas of work. According to updates shared by project partners at their annual review meeting, the team has reached important technical milestones, advanced the financial and operational planning of its pilot projects, and significantly expanded its regional and European reach.
The scale of the effort is considerable. Across all pilot projects, the valley is targeting a combined installed capacity of over 140 megawatts (MW) dedicated to producing green hydrogen, generated by splitting water using renewable electricity, with an annual output exceeding 19,000 tonnes. Total investment across the valley surpasses €465 million, with the Clean Hydrogen Partnership, a public-private partnership between the European Commission, the European hydrogen industry and research organisations, contributing approximately €19.5 million to leverage significant additional private and public co-financing.
Design Phase Nearing Completion
A central theme of the project’s recent progress has been the steady progress of the design phase, laying the groundwork for the next stage of implementation. A major milestone was reached in March 2026 with the completion and delivery of the Safety Management Plan, a comprehensive framework defining safety protocols across all pilot projects. Developed through close collaboration between project teams and safety specialists from HIPERBARIC and CIDAUT, the plan has already moved into early practical application through emergency response exercises conducted with local firefighting services across the region.
Three further major project documents are now under development: the co-designed valley specifications, the implementation plan, and the financial and investment plans for the integrated valley, all targeting completion in September 2026. Together, they will constitute the valley’s blueprint for the transition from planning to deployment.
In parallel, a digital tool is being developed by the Electric Power Research Institute (EPRI), CARTIF Technology Centre and WSP. The tool embeds digital twins as virtual replicas of the valley’s entire infrastructure, used to simulate, optimize and monitor operations before and during deployment. The team is currently building computational models using simulated data, a pragmatic approach to advance technical work while real data from the pilot projects becomes available. Progress has been slower than initially anticipated, reflecting the complexity of integrating together information from a large and diverse set of pilots at different stages of development.
On the performance assessment side, the University of Burgos in collaboration with CARTIF Technology Centre has substantially advanced the framework for assessing the valley’s overall performance. The structure is largely in place, comparative studies between CyLH2Valley and other European Hydrogen Valleys are well underway, and the majority of the agreed performance targets have been defined and validated with project partners. Work continues to gather the remaining inputs ahead of the September deadline.
Demonstration Projects: From Financial Modelling to Deployment
The financial analysis of the valley’s pilot projects, presented by partners at their annual review meeting, signals a project moving confidently from paper to action. The valley encompasses a broad range of hydrogen applications, from production and distribution through to mobility, industrial use and energy blending.
Green Hydrogen and derivatives Production
ELYSE is developing a green methanol production facility in the PEMA industrial park in Garray, Soria. Green methanol, produced from hydrogen and carbon dioxide, is a clean fuel with growing applications in shipping, aviation and the chemical industry. Having secured its environmental authorisation in September 2025, the project has since further developed its configuration to combine electrolytic hydrogen with gas derived from pine biomass, an approach that maximises methanol output, improves overall efficiency and creates a positive impact on the local territory by making productive use of the region’s forest resources. Backed by leading institutional investors and with a clear path towards project financing, ELYSE represents one of the most advanced industrial-scale projects in the valley.
IGNIS is developing a large-scale green hydrogen production project in Melgar de Fernamental (Burgos), based on renewable-powered electrolysis. The project foresees up to 500 MW of capacity, deployed in phases, and is expected to supply hydrogen for downstream applications such as green ammonia, while also supporting the wider needs of the valley.
BURAMOVE is producing green ammonia using a 20-megawatt electrolyser powered by dedicated renewable energy. Ammonia is a key industrial chemical and a promising medium for transporting and storing green energy. The project benefits from a long-term supply agreement with a neighbouring industrial customer, an arrangement that significantly reduces commercial risk and ensures a reliable market from the outset. Part of the hydrogen produced is also integrated into other valley applications, including the Hydrogen Refuelling Station, supporting the overall system integration.
UNIVERGY is developing an electrolysis plant that will supply green hydrogen for blending, with a primary focus on transport and distribution, including delivery by tube trailers, while also exploring future applications such as blending into the natural gas network serving residential buildings in the region and supply routes to a nearby cement plant via dedicated pipeline. This project broadens the valley’s reach into the buildings and construction sectors, adding to the diversity of applications being demonstrated.
Hydrogen Distribution Infrastructure
BURAMOVE is developing a dedicated hydrogen pipeline connecting its green hydrogen plant to the first hydrogen mobility demand point in the valley, a tangible piece of infrastructure that will underpin future hydrogen supply for transport in the area. Engineering was completed in March 2026, with authorisation from the regional government of Castilla y León pending.
In parallel, hydrogen distribution across the valley will also rely on flexible transport solutions, such as tube trailers, while some partners are exploring additional pipeline connections to nearby industrial users and future backbone infrastructures
Mobility
HIPERBARIC, DESMASA, ACITURRI and BEROIL, is progressing with the deployment of a hydrogen refuelling station designed to serve a growing fleet of hydrogen-powered vehicles, including heavy-duty trucks, buses and light-duty vehicles. The station is being jointly developed by these four partners, each contributing key components to the installation.
Within the project, each partner contributes specific components to the station. HIPERBARIC provides the high-pressure compression technology, enabling efficient hydrogen processing and refuelling performance. ACITURRI contributes the hydrogen storage systems, ensuring operational flexibility across different pressure levels. DESMASA is responsible for the dispensing systems, allowing safe and reliable vehicle refuelling. BEROIL will operate the station, managing day-to-day activities and hydrogen supply, delivered both by pipeline and tube trailers to ensure flexibility during the initial phases of operation.
The station will play a central role in enabling hydrogen mobility within the valley, providing refuelling services to hydrogen-powered trucks operated by JOANCA, public buses from the Burgos City Council, and light-duty vehicles deployed by partners such as HIPERBARIC and DESMASA.
JOANCA, a logistics operator based in Burgos, is integrating two hydrogen-powered heavy-duty trucks into its commercial fleet. A notable development is that vehicle costs have fallen significantly compared to initial estimates, reflecting the rapid pace of cost reduction in hydrogen vehicle technology. The project demonstrates that zero-emission freight is increasingly viable, with public co-financing playing a decisive role in enabling early deployment.
BURGOS is advancing the deployment of hydrogen-based public transport solutions through the integration of four fuel cell electric buses (FCEBs) into the city’s fleet, as part of its strategy to reduce CO₂ emissions and improve urban air quality. The buses will be refuelled using the valley’s hydrogen infrastructure, contributing to the demonstration of hydrogen mobility in real urban conditions.
Industrial and Energy End-Use
FERROLI is piloting the blending of hydrogen into industrial gas boilers, demonstrating the potential for decarbonising industrial heat, one of the most challenging energy uses to shift away from fossil fuels, and a key proof point for the valley’s industrial ambitions.
EFICANZA is implementing hydrogen blending at the Hospital de Burgos, a high-visibility application that demonstrates the use of hydrogen in major public buildings and helps build confidence among institutional energy managers.
Deployment: Challenges Being Managed
Alongside the positive momentum, project partners shared an honest account of the challenges that lie ahead. Permitting processes, including environmental authorisations, construction licences and operational permits, remain a source of risk across several projects, made more complex by regulations that are still evolving for hydrogen applications. Securing confirmed agreements with buyers for the hydrogen produced, aligning investment plans with financing timelines, and managing supply chain constraints on critical equipment are common challenges across all projects.
Partners are addressing these risks through close coordination, active pursuit of the necessary permits, and targeted efforts to develop demand, recognising that the commercial viability of the valley as a system depends on aligning supply and demand across all its interconnected projects.
Business Cases and Commercial Viability
Several distinct commercial analyses, covering the full range of the valley’s applications, from hydrogen production and industrial use to mobility and energy blending, are under in-depth review by ESADE Business School. The analyses examine technical feasibility, economic viability, market conditions, environmental impact and risk. Results are targeted for September 2026.
The work reflects a broader finding shared by project partners: Spain currently benefits from some of the lowest green hydrogen production costs in Europe, a structural competitive advantage as the sector scales. Demand for green hydrogen across Europe is expected to grow substantially over the coming decade, with transport leading uptake and industrial applications such as ammonia and synthetic fuels following closely.
A Stakeholder Community Growing in Breadth and Depth
The valley’s stakeholder network, the community of organisations and individuals engaged around the project, is managed by H2CYL, the green hydrogen association of Castilla y León. It has now surpassed 1,000 registered members spanning 21 categories across the hydrogen sector, from production and electrolysis technology to mobility, logistics, regulation, education and public entities.
Beyond the numbers, the community is increasingly active. Dedicated working groups have been established on innovation, funding opportunities, and the alignment of hydrogen supply with demand. The H2CYL team has maintained a visible presence at major events, including in 2026 the European Hydrogen Energy Conference (EHEC) in Seville, the III National Conference on Green Hydrogen (H2V) in Huelva, and a series of regional hydrogen exhibitions across multiple provinces of Castilla y León. Outreach activities have reached university students, vocational training schools and primary school children, supporting the development of hydrogen-related knowledge across different generations.
Learning from Europe’s Hydrogen Valleys
CyLH2 Valley’s knowledge exchange programme, led by the French renewables company Lhyfe, has delivered a structured series of learning sessions drawing on the experience of hydrogen projects across Europe. Five sessions have taken place since autumn 2025, with experts from peer projects sharing experiences on financing, deployment strategies, permitting and lessons learned. A further five are planned by September 2026, providing practical insights that feed directly into the valley’s own planning and deployment decisions.
CARTIF Technology Centre also participated in the Clean Hydrogen Partnership’s Hydrogen Valley Days in Antwerp, Belgium, in May 2026, engaging with the broader European community of hydrogen valley projects and bringing back insights on the shared challenges, hydrogen pricing, regulatory uncertainty and demand development, that CyLH2 Valley’s integrated approach is directly designed to address.
Communication Generating Growing Visibility
The project’s communication and outreach programme, coordinated by ICONS, a specialist European innovation communication organisation, is generating increasing visibility. Partners reviewed the monitoring results of the communication and dissemination activities carried out during the project’s first phase. The data presented confirmed a positive overall trend, reflecting growing visibility and stakeholder engagement and providing a solid basis for future outreach activities. A wide range of stakeholders has been reached across digital and physical channels, and eleven publications have been issued to date.
The project also benefits from a favourable policy context: the Castilla y León regional government is developing a draft Green Hydrogen Strategy for 2030 that sets targets for renewable hydrogen production capacity, refuelling infrastructure and specialised employment, a framework to which CyLH2 Valley is directly contributing and helping to shape.
The Future Ahead
The coming months will be among the most important of the project’s lifecycle. Multiple technical and commercial areas of work are converging on a September 2026 progress report to the European Commission, which will also mark the launch of new phases focused on governance, digitalisation, business model development, scaling up and collaboration with other European hydrogen valleys.
With its demonstration projects advancing, its technical foundations being laid and a growing stakeholders’ community behind it, the Hydrogen Valley of Castilla y León is no longer a vision on paper, it is a project in motion.
