OSLO (Reuters). – Royal Dutch Shell, (LON) and Norsk Hydro are exploring the possibility of producing hydrogen together from renewable electricity. This is in an effort to reduce carbon emissions and supply transport and heavy industries customers. Hydro stated this Tuesday.

Hydro Havrand (the Norwegian aluminium producer’s green hydrogen unit), signed a memorandum o understanding (MoU). They are now working to determine potential sources of renewable hydrogen.

The so-called “green hydrogen” is zero-carbon hydrogen that’s produced by using electrolysis with renewable power to convert water to hydrogen and oxygen. This gas has been promoted to be a means to decrease emissions in high-emission industries as well as transport sectors that rely on fossil fuel.

Shell and Hydro initially will determine which European areas are the best for producing renewable hydrogen. They may then look to expand later into new locations.

Per Christian Eriksen from Hydro Havrand said that they are currently looking for potential sites where both of them have operations. He also indicated the potential for hydrogen to be used in existing facilities.

Eriksen stated that Hydrogen could be produced in areas where Shell or Hydro have high gas consumption and where it is possible to supply to third parties, such as refineries and other industries using “grey” hydrogen from non-renewable energy.

“Hydro Havrand and Shell can work toward a shared goal of establishing integrated hydrogen value chains and ultimately a strong global market for hydrogen,” Elisabeth Brinton, Shell’s executive vice president for renewables & energy solutions, said in a statement.

Arvid Moss from Hydro’s Energy Unit stated that Hydro and Shell will be spending the nine months looking for opportunities to collaborate.

He told Reuters that “important for decarbonisation is large industrial players working together to find faster solutions because we need scale.”