Spanish oil company Repsol has put on hold its planned green hydrogen projects in Spain, with an electrolysis capacity of 350 megawatts (MW), due to an unfavorable regulatory environment, a spokesman told Reuters on Monday.

The company had already warned that regulatory uncertainty, including the possibility that an extraordinary tax on energy companies and banks could be redesigned and made permanent, could affect its investment in the fledgling industry.

Spain's goal is to reach 12 gigawatts (GW) of green hydrogen production capacity by the end of the decade, so Repsol's decision may have wider implications for the country's green agenda.

A 100 MW project in Cartagena, with a planned investment of more than 200 million euros ($217 million), is among those that have been put on hold, along with other projects in Tarragona and the Basque Country, with capacities of 150 MW and 100 MW respectively.

Repsol's next electrolyzer will be built in Portugal, according to the spokesman.

Green hydrogen -- hydrogen produced from renewable electricity -- is considered key to decarbonizing the European economy. However, given their cost, green hydrogen projects are generally not competitive without subsidies.

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(Reporting by Pietro Lombardi; edited by Mark Potter; edited in Spanish by Javi West Larrañaga)