Orsted and BP are to work together on the development of a large-scale renewable hydrogen project at a refinery in north-west Germany, the latest example of major businesses in the energy sector focusing on so called "green hydrogen."
In an announcement Tuesday, BP said it had signed a letter of intent with Orsted to collaborate on the project.
According to the oil and gas giant, the scheme will involve the development of an initial 50 megawatt electrolyser as well as "associated infrastructure" at its Lingen Refinery. The electrolyser, BP said, was expected to generate nearly 9,000 metric tons of hydrogen per year.
Renewable, or green hydrogen, refers to hydrogen produced via the electrolysis of water, with the electricity used in the process coming from renewable sources like wind and solar.
In its own announcement, Orsted said it expected the electrolyser at the Lingen Green Hydrogen project to be powered by one of its offshore wind farms in the North Sea.
"Heavy industries such as refineries use large quantities of hydrogen in their manufacturing processes," Martin Neubert, executive vice president at Orsted, said in a statement issued Tuesday.
"They will continue to need hydrogen, but replacing the currently fossil-based hydrogen with hydrogen produced from renewable energy can help these industries dramatically lower their CO2 footprint," he added.
Together, Orsted and BP have made an application for funding from the EU Innovation Fund, which is focused on the "demonstration of innovative low-carbon technologies."
According to BP, a final investment decision is expected in 2022, "subject to appropriate enabling policies being in place." The project could be up and running by 2024.
The EU has laid out plans to install 40 gigawatts of renewable hydrogen electrolysers and produce as much as 10 million metric tons of renewable hydrogen by 2030. To put this figure into context, the International Energy Agency (IEA) says that global hydrogen production currently amounts to roughly 70 million metric tons per year.
At the moment, the vast majority of hydrogen generation is based on fossil fuels. The IEA has said that hydrogen production is responsible for roughly 830 million metric tons of carbon dioxide each year.
The last few years have, however, seen a number of projects centered on green hydrogen production take shape.
Just this week, it was announced that a project located on an archipelago north of Scotland planned to combine tidal power and battery technology to generate "continuous green hydrogen."
And back in June, Spanish oil and gas firm Repsol revealed plans to develop a facility that will use carbon dioxide and green hydrogen to generate net-zero emission fuels for use in the transportation sector.