Masdar and Verbund Green Hydrogen GmbH signed a deal to explore developing a green hydrogen plant in central Spain as part of efforts to decarbonize Europe's hard-to-abate sectors, the companies said on Dec. 7.

The agreement, announced at COP28, creates a 50-50 partnership for a joint study between Masdar, a United Arab Emirates power company and Austria’s Verbund AG, to explore the development of green hydrogen.

The companies will evaluate whether green hydrogen produced at the plant could displace up to 1 million tonnes of carbon emissions annually, which is the equivalent of removing around 700,000 cars from the road every year. The prospective plant will aim to generate green hydrogen to cover industrial demand in Spain and central Europe.

Spain currently consumes around 500,000 tonnes of gray hydrogen per year, which could be gradually replaced with green hydrogen. By 2035, Austria alone is expected to require around 600,000 tonnes per year of clean hydrogen.

“The Spanish market plays a vital role for us, both for the development of local H2 production, as well as for future potential import to central Europe,” Hamead Ahrary, managing director of Verbund Green Hydrogen GmbH said in a press release. “The joint study will generate valuable insights for the feasibility and execution of a potential project… Hence, we are looking forward to the results of this study."

The planned green hydrogen produced is expected to be used to decarbonize Spain, and more broadly Europe's, hard-to-abate sectors, which could include production of steel, fertilizers, chemicals, heavy transportation and aviation. Currently, steelmaking alone is responsible for 5% of European carbon emissions. With most EU nations pledging to become carbon neutral by 2050, green hydrogen presents a powerful vehicle for achieving that aim.

If found feasible by the study, the plant is expected to be operational by the end of the decade.