LISBON, Dec 19 (Reuters) Galp Energia expects to start producing biodiesel and biojet fuel from waste in an industrial-scale system it is building at its Sines refinery in 2026, the business, which is mostly an oil manufacturer and refiner, said on Thursday.

In 2015 Galp participated in a 75%-25% joint venture with Japan's Mitsui to invest 400 million euros ($415 million) in the Hydrogenated Grease (HVO) plant, which will have a production capacity of 270,000 metric lots each year.

It will transform waste materials, such as utilized cooking oils, into renewable biodiesel and biojet fuel, likewise known as sustainable aviation fuel (SAF), utilizing green hydrogen produced by an electrolyser powered by wind or solar energy.

Galp stated in a statement it received on Wednesday the 3 reactors to process biofuels, which will allow the HVO system to "produce SAF and biodiesel in 2026 ... putting Galp at the leading edge of developing low-carbon services vital for the energy transition".

Galp is also investing 250 million euros in a 100 megawatt (MW) electrolyser system to produce green hydrogen to power the refinery in Sines. ($1 = 0.9637 euros) (Reporting by Sergio Goncalves;-RRB-