Water scarcity complicates green hydrogen expansion in Spain and the United States
More than 35% of operational and planned green and blue hydrogen capacity worldwide is located in regions with high water stress. Spain faces particular exposure as it targets 12 GW of electrolyzers by 2030, compared with 235 MW currently installed.
Hydrogen investment meets a water constraint
Green hydrogen has become a major investment priority for the European Union, the United States and Japan, but the availability of water is emerging as a constraint on where projects can operate. Electrolyzers split water using renewable electricity, linking hydrogen production not only to power supply but also to the reliability and sustainability of local water sources.
The challenge is concentrated geographically. Motorpasión reports that one-fifth of green hydrogen projects in the United States are intended for water-scarce areas. In Spain, almost half of hydrogen projects are expected to be located in areas facing high water stress. The individual water demand of an electrolyzer may be modest compared with other industrial uses, but the effect changes when thousands of tonnes of production are concentrated in dry regions.
A wind- and solar-powered hydrogen plant in Arizona's Sonoran Desert illustrates the issue. Citing CleanTechnica, Motorpasión says the plant uses groundwater that experts consider unsustainable. When water associated with producing and operating its renewable power is included, and unused water is not returned to surface or underground sources, consumption could reach 1.2 billion liters.
Spain combines ambitious targets with high exposure
An IRENA and Bluerisk study cited by Motorpasión estimates that more than 46% of Spain's operational and planned blue and green hydrogen projects will be in high-water-stress areas by 2040. Globally, more than 35% of operational and planned green and blue hydrogen production capacity is located in such regions. Gray hydrogen currently accounts for the largest share of water withdrawals associated with hydrogen production.
Spain may require as much as 45 billion liters of water annually to produce green hydrogen. That remains small beside agriculture, which consumes 22,000 cubic hectometers per year and represents 78% of national water use. The comparison does not eliminate the local risk: hydrogen facilities can compete with food production and conventional electricity generation when all three depend on the same constrained basin.
The Spanish government is targeting 12 GW of electrolyzer capacity by 2030 and has allocated €3.1 billion in aid. Installed capacity currently stands at only 235 MW. Reaching the target therefore requires a substantial construction program, while developers must also secure renewable electricity, water rights and infrastructure in suitable locations.
Location and water sourcing become investment tests
Some Spanish projects continue, including Repsol's ATLAS project in Arteixo, Quixotgen in Albacete and ZaragozaH2V. Others have been withdrawn: the La Sevillana thermal power plant project involving Repsol and RIC Energy was canceled in July 2025, H2 Meirama in Galicia was abandoned in December 2025, and the Green Meiga methanol project in Lugo was canceled in early 2026. The source does not attribute every cancellation specifically to water constraints, but the changes show the broader difficulty of converting announced capacity into operating plants.
Water availability is consequently becoming part of project economics rather than only an environmental consideration. Developers in dry regions may need alternative supplies, water-recycling systems or different locations, adding infrastructure and operating requirements. Investors and hydrogen buyers will need to examine the origin of the water, competing demand within the basin and the likelihood that access remains reliable over the life of a plant.
The issue also affects the pace at which green hydrogen can replace conventional production. European Commission data show that hydrogen supplied less than 2% of Europe's energy consumption in 2022 and was used mainly to manufacture chemicals such as plastics and fertilizers. Natural gas produced 96% of that hydrogen, generating substantial carbon dioxide emissions. Expanding renewable hydrogen can reduce those emissions, but projects in water-stressed markets will have to demonstrate that their resource base is viable as well as low-carbon.
