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

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

It will transform waste materials, such as utilized cooking oils, into eco-friendly biodiesel and biojet fuel, likewise referred to as sustainable aviation fuel (SAF), utilizing green hydrogen produced by an electrolyser powered by wind or solar power.

Galp said in a declaration it received on Wednesday the three reactors to process biofuels, which will enable the HVO system to "produce SAF and biodiesel in 2026 ... putting Galp at the forefront of establishing low-carbon options important for the energy transition".

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