United Arab Emirates (UAE) state-owned renewables developer Masdar signed a deal on Thursday with Austrian electricity provider Verbund to develop a green hydrogen plant in central Spain.

Under the deal, the two companies will analyse the feasibility of building one of Europe’s largest green hydrogen production plants in Spain’s Castilla-La Mancha region, which is already home to an array of renewable energy projects.

The hydrogen plant would aim to help decarbonise hard-to-abate industrial sectors across Europe. The green hydrogen produced at the plant could have the potential to displace up to one million tonnes of carbon emissions annually, Masdar said in a press statement.

Hamead Ahrary, managing director of Verbund, said: “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. The joint study will generate valuable insights for the feasibility and execution of a potential project, which would result in the further strengthened positioning of Verbund in the Spanish market. Hence, we are looking forward to the results of this study.”

The agreement was signed on the sidelines of the UN climate summit, COP28, currently ongoing in Dubai. It builds on an earlier deal, signed by the two companies in January this year, to explore green hydrogen’s potential in Europe.

Masdar also plans to build a gigawatt-scale solar farm in Castilla-La Mancha. If all plans go ahead successfully, the green hydrogen plant is expected to be operational by the end of the decade and could be powered by the energy produced from this solar plant and others already in operation in the region.

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Mohammad Abdelqader El Ramahi, Masdar’s chief green hydrogen officer, said: “As one of Europe’s largest planned green hydrogen production plants, the project aims to help decarbonise the continent’s hard-to-abate industries while creating jobs and tapping into the region’s enormous solar and wind potential.

“Our successful collaboration on this project paves the way for further development of green hydrogen and a vital pipeline linking centres of production with end-use markets. At COP28, as the world looks for ways to accelerate the journey to net zero, partnerships such as this serve as a powerful example of what can be achieved if we work together with purpose and at pace.”

Masdar has signed several deals to develop renewable and clean energy technology over the past week at COP28, bolstered by their home country’s position as summit host. On Tuesday, it acquired a 49% stake in the UK’s large-scale Dogger Bank South offshore wind projects in an investment worth more than £11bn (Dh40.4bn).