Phillips 66 Hydrogen Initiatives for 2025: Key Projects, Strategies and Partnerships

Phillips 66 and Hydrogen: From Strategic Blueprint to Commercial Reality

An Inflection Point in Hydrogen Adoption

Between 2021 and 2024, Phillips 66’s approach to hydrogen was characterized by strategic positioning and foundational exploration. The company established key alliances, such as the memorandum of understanding with Plug Power to explore green hydrogen opportunities and the joint venture with H2 Energy Europe to build a retail refueling network. These moves, alongside feasibility studies for fuel-switching at its Humber Refinery and proposals for small-scale electrolyzers at its Ferndale Refinery, signaled a broad-based strategy to test multiple facets of the hydrogen economy—from production to mobility. The applications were largely preparatory, focused on creating future options rather than generating immediate returns.

The period from 2025 to the present marks a distinct inflection point, shifting from exploration to execution and commercial integration. The foundational partnership with Uniper at the Humber Refinery, established in 2024, matured significantly in May 2025 with the selection of ITM Power to supply the 120MW electrolyzers. This moves the project from a theoretical collaboration toward a tangible, large-scale green hydrogen supply chain for refinery decarbonization. Furthermore, hydrogen’s role evolved from a future fuel to a critical component in producing commercially viable, lower-carbon products today. The supply of sustainable aviation fuel (SAF)—produced using hydrogen in the hydrotreating process—to major airlines like British Airways validates the end market. This shift from exploratory JVs and MOUs to concrete supplier contracts and commercial offtake agreements demonstrates that the broader adoption of hydrogen is moving beyond pilot stages and into integrated, revenue-generating value chains for hard-to-abate sectors.

A Portfolio Reshaped by Strategic Investments

Phillips 66 has backed its strategic pivot toward a lower-carbon future with significant capital allocation, targeting both the expansion of its core midstream business and the development of new energy infrastructure. These investments illustrate a dual strategy: strengthening profitable legacy assets to fund the transition while simultaneously building out the renewable energy capabilities necessary for long-term growth. The acquisition of EPIC NGL assets and the construction of the Iron Mesa gas processing plant enhance the company’s foothold in the Permian Basin, providing stable cash flow. Concurrently, the billion-dollar-plus conversion of the Rodeo refinery is a landmark investment that directly enables the production of renewable fuels, a key use case for low-carbon hydrogen.

Table: Phillips 66 Strategic Investments (2022-2025)

Building the Hydrogen Value Chain Through Partnerships

Collaboration is central to Phillips 66’s hydrogen and renewable fuels strategy. The company has methodically assembled a network of partners that span the entire value chain, from green hydrogen production and carbon capture technology to renewable power supply and end-market offtake. These alliances mitigate risk, provide access to specialized expertise, and accelerate market entry. The progression from an exploratory agreement with Plug Power in 2021 to a definitive SAF supply deal with British Airways in 2025 showcases a clear maturation of this partnership-driven approach, moving from developing capabilities to commercializing them.

Table: Phillips 66 Hydrogen and Renewables Partnerships

A Transatlantic Strategy with Deepening Regional Roots

Phillips 66’s hydrogen activities are concentrated in two key regions: the UK and the US, with an additional strategic foray into continental Europe’s mobility sector. Between 2021 and 2024, the company laid the groundwork in these areas. In the UK, the Humber Refinery became the focal point for decarbonization efforts through partnerships with Uniper and Worley. In the US, projects were initiated at multiple refineries, including Bayway (hydrogen blending), Ferndale (electrolyzer proposal), and Rodeo (renewable conversion). The H2 Energy joint venture established a clear growth path in Germany, Austria, and Denmark.

From 2025 onwards, the strategy has shifted from geographic diversification to deepening its presence within these established hubs. The UK Humber project advanced from a partnership announcement to a concrete electrolyzer supply tender, solidifying its role as a key industrial decarbonization site. In the US, California has emerged as a critical commercial hub, with the Rodeo facility now powered by a new solar plant from the NextEra partnership and supplying SAF to British Airways for flights out of the state. This demonstrates a move from planning projects across a wide map to executing and commercializing them in regions with supportive policy and existing infrastructure. The risk is no longer about geographic selection but about successful project execution and market penetration within these core territories.

From Feasibility to Commercial-Scale Validation

The technological maturity of Phillips 66’s hydrogen-related portfolio has advanced significantly. The 2021–2024 period was dominated by early-stage and pilot-scale activities. This included a $3 million DOE grant for research on reversible solid oxide fuel cells, a feasibility study for hydrogen fuel-switching at Humber, and a proposal for a 5 MW pilot electrolyzer at Ferndale. These initiatives represent the initial exploration of technologies to prove concepts and assess economic viability. The hydrogen blending at the Bayway Refinery with Linden Cogeneration was an important early commercial application, but it utilized existing refinery off-gas rather than new green hydrogen production.

The landscape in 2025 shows a decisive move toward commercial scale and technological validation. The Humber H2ub project, with its planned 120 MW of electrolyzer capacity from ITM Power, represents a significant leap from pilot-scale to industrial-scale green hydrogen production. This is no longer a demonstration; it is the front-end engineering for a commercial facility. Most importantly, the company’s ability to produce 44,000 barrels per day of renewable fuels in Q1 2025 at its converted Rodeo facility provides definitive proof that the associated technologies—including the use of hydrogen for hydrotreating—are commercially mature and scalable. This shift from research grants and feasibility studies to large-scale electrolyzer projects and substantial commercial output signals that investor interest is now focused on execution risk and market demand rather than technological possibility.

Table: Phillips 66 Hydrogen SWOT Analysis (2021-2023 vs. 2024-2025)

The Year Ahead: A Focus on Execution and Scale

The most recent data from 2025 indicates that Phillips 66 is moving with conviction from strategic planning to physical and commercial execution. The year ahead will be a critical test of this transition. The most important signal to watch will be the final investment decision (FID) for Uniper’s Humber H2ub green hydrogen project. A positive FID would validate the economics of green hydrogen in industrial refining and lock in Phillips 66 as a major offtaker. Conversely, a delay would signal persistent challenges for large-scale green hydrogen projects in the UK.

Market actors should also closely monitor the operational performance and profitability of the renewables segment, especially following the difficult Q1. Consistent production and new SAF agreements, like the one with British Airways, will be essential to demonstrate that the massive investment in the Rodeo facility can deliver sustained returns. Activity in the JET H2 Energy joint venture in Europe is another key indicator of whether hydrogen mobility is gaining traction. Overall, the signals point toward a company narrowing its focus on the most promising, high-value applications of hydrogen—refinery decarbonization and sustainable aviation fuel—and the next 12 months will reveal how effectively it can scale these initiatives from promising projects into profitable business lines.

Frequently Asked Questions

What has been the biggest shift in Phillips 66’s hydrogen strategy since 2024?
The biggest shift has been from strategic exploration to commercial execution. Before 2025, the company focused on preparatory moves like MOUs and feasibility studies. From 2025 onwards, it has advanced to concrete actions such as selecting ITM Power to supply 120MW electrolyzers for the Humber project and signing commercial offtake agreements to supply Sustainable Aviation Fuel (SAF) to major airlines, indicating a move into integrated, revenue-generating value chains.

What are the main commercial products Phillips 66 is creating with its hydrogen and renewables strategy?
The primary commercial product is Sustainable Aviation Fuel (SAF). The company’s converted Rodeo facility uses low-carbon hydrogen in the hydrotreating process to produce renewable fuels. Phillips 66 has already begun supplying SAF to major airlines like British Airways and United Airlines. A secondary application is using hydrogen to decarbonize its own refinery operations, such as for the fired heaters at its Humber Refinery.

How is Phillips 66 funding its transition to lower-carbon energy like hydrogen?
Phillips 66 employs a dual strategy. It invests in its profitable legacy midstream business to provide stable cash flow, as seen with the EPIC NGL acquisition and the new Iron Mesa gas plant in the Permian Basin. This cash flow helps fund its capital-intensive renewable energy projects, most notably the billion-dollar-plus conversion of its Rodeo refinery to produce renewable fuels.

Where are Phillips 66’s most important hydrogen and renewable fuel projects concentrated?
The company’s key activities are concentrated in two main regions. In the United Kingdom, the Humber Refinery is the focal point for industrial decarbonization and a large-scale green hydrogen project with partner Uniper. In the United States, California has emerged as a critical commercial hub, where the converted Rodeo facility produces SAF and is supported by a new solar facility partnership with NextEra.

What is the significance of the Humber H2ub project for Phillips 66?
The Humber H2ub project represents a major step from pilot-scale studies to industrial-scale green hydrogen production. As a potential offtaker of the hydrogen produced by the 120MW electrolyzers, Phillips 66 can use it to decarbonize its Humber Refinery operations. A final investment decision on this project would validate the economics of large-scale green hydrogen for refining and solidify the company’s role in the UK’s industrial decarbonization.

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