European Investment Bank finances Galp’s biofuels, hydrogen projects in Sines, Portugal

Photo: Galp

The European Investment Bank announced Feb. 27 that it has granted a loan for 430-million euros (USD$464 million) for the construction of two key projects aimed at transforming Galp’s Sines refinery, making a crucial contribution for the decarbonization of heavy-duty road transport and aviation.

Galp is developing the biofuels unit, already at a construction stage, in partnership with Japan’s Mitsui, as part of a total investment of 400-million euros (USD$431.7 million), of which 250-million euros (USD$269.8 million) is provided by the EIB.

This unit will convert vegetable oils and residual fats into sustainable aviation fuel (SAF) and renewable diesel, also known as hydrotreated vegetable oil (HVO), with identical characteristics to the fossil-based fuels used in regular combustion engines.

This unit, set to begin production in 2026, will have the capacity to produce up to 270,000 tons of renewable fuels, enough for Portugal to comply with the European Union mandate for this type of fuels in aviation.

SAF is essential for air transportation—responsible for about 3 percent of global greenhouse-gas emissions—to begin its decarbonization journey.

In parallel, Galp is building in the same site a 100-megawatt electrolyzer, a 250-million-euro (USD$269.8 million) investment of which the EIB will finance 180-million euros (USD$194.25 million).

It is set to produce up to 15,000 tons of renewable hydrogen per year when it goes online next year, becoming one of the first operational units of its size in Europe.

“These pioneering projects are a clear example of how we can combine financing, innovation, and our environmental commitment to promote a fair and sustainable energy transition,” said Jean-Christophe Laloux, the director general and head of EU lending and advisory at EIB.

“By supporting the production of advanced biofuels and renewable hydrogen, we are contributing to a more energy-independent Europe that aligns with global climate goals,” Laloux said.

Ronald Doesburg, Galp’s executive board member responsible for the industrial area, added, “We have mobilized partners, private investment and European financing to drive a transformative project that brings European and national energy and industrial policies to life. More is needed from energy companies, public funding and government support if we want to maintain Portugal’s relevance in an increasingly unstable world.”

The two projects support the goal of climate neutrality by 2050, in line with the European Green Deal, and strengthen the EU’s energy independence as outlined in the REPowerEU plan.