OMV Petrom’s Petrobrazi refinery to produce green hydrogen

Feb. 27, 2024
OMV Petrom has secured funding from the European Commission to support construction of two new units for production of green hydrogen at the Petrobrazi refinery in southeast Romania.

OMV Petrom SA has secured funding from the European Commission (EC) to support construction of two new units for production of green hydrogen at the operator’s 4.5-million tonne/year (tpy) Petrobrazi refinery in southeast Romania, near Ploiesti City.

Awarded under the National Recovery and Resilience Plan (NRRP) of the EC-supported NextGenerationEU’s Recovery and Resilience Facility (RRF) as part of two financing contracts signed on Feb. 26 with Romania’s Ministry of Energy, the maximum funding amount of €50 million will be dedicated to OMV Petrom’s plan to build two water electrolysis plants of 35 Mw and 20 Mw that, combined, would enable the refinery to produce about 8,000 tpy of carbon-free green hydrogen, the operator said.

Featuring a production process to be powered entirely by renewable energy, OMV Petrom said it will integrate hydrogen from the proposed units into the refinery’s manufacturing of green fuels such as sustainable aviation fuel (SAF) and biodiesel to help reduce regional carbon dioxide (CO2) emissions by at least 70% compared to conventional fuels.

With both units currently in the engineering phase, OMV Petrom said it plans to take final investment decision (FID) on projects—which will require an overall investment of about €140 million—later this year.

The proposed green hydrogen units at Petrobrazi come as part of OMV Petrom’s Strategy 2030 to support the energy transition in Romania and its surrounding region, said Christina Verchere, the company’s chief executive officer.

By the end of this decade, the operator plans to invest about €11 billion, of which about 35% will support low- and zero-carbon projects across OMV Petrom’s portfolio, Verchere said.

Alongside supporting the company’s commitment to a low-carbon future, green hydrogen production at Petrobrazi also marks an important step in ensuring sustainable refining activity at the site, added Radu Căprău, OMV Petrom executive board member responsible for the operator’s downstream business.

As part of its journey to net-zero operations by 2050, OMV Petrom is targeting production of 450,000 tpy of renewable diesel and SAF from sustainable feedstock by 2030 per the operator’s sustainability framework launched in 2021 (OGJ Online, Oct. 13, 2022).

In a release on June 23, 2022, OMV Petrom said the Petrobrazi refinery would begin test runs by July 2022 for production of SAF via co-processing of locally produced rapeseed oil following a pilot program at the site performed in July 2020 (OGJ Online, Nov. 19, 2020).

Financing program

Funding commitments under the NRRP for the proposed green hydrogen units at Petrobrazi follows the July 2023 reopening of the competitive call for projects supporting investments in green hydrogen first launched in 2022, OMV Petrom said.

As the centerpiece of NextGenerationEU’s €800 billion temporary recovery instrument to support the European Union’s (EU) economic recovery from the coronavirus pandemic and prepare for a low-carbon future, the RRF is a temporary instrument through which the EC raises funds by borrowing on capital markets (e.g., issuing bonds on behalf of the EU) that subsequently become available to member states for implementing reforms and investments that make their economies and societies more sustainable, resilient, and prepared for the green and digital transitions in line with the EU’s priorities, according to the EC’s website.

Funds under the RRF are provided to member states based on their individual roadmaps to reforms and investments aimed at making EU economies greener, digital, and more resilient.

The RRF is also crucial for implementing the REPowerEU plan, the EC’s response to the socio-economic hardships and global energy market disruption caused by Russia's invasion of Ukraine by reducing the EU’s reliance on Russian gas, the EC said.