Netherlands-based oil and gas company Shell, via its New Energies Holding Europe business, has signed a memorandum of understanding with Hydro Havrand, a green hydrogen company owned by Norwegian energy firm Hydro.

The two companies will assess the potential of joint projects focused on producing hydrogen using renewable electricity.

They plan to use this green hydrogen to decarbonise their operations and supply customers in heavy industries and the transport sector.

Shell Renewables and Energy Solutions executive vice-president Elisabeth Brinton said: “Hydrogen will play a key role in decarbonising hard-to-electrify sectors, which is vital for accelerating progress toward a net-zero emissions future.

“By leveraging each other’s strengths and capabilities, Hydro Havrand and Shell can work toward a shared goal of establishing integrated hydrogen value chains and ultimately a strong global market for hydrogen.”

The two companies have already started preliminary works under the deal.

They will initially identify locations in Europe that are ideal for producing hydrogen for their own use and enabling supplies to the broader market.

Shell and Hydro also plan to export hydrogen to other markets and regions at a later stage.

Hydro intends to replace natural gas with renewable hydrogen for heating purposes in aluminium production.

This will help the company achieve its goal of reducing its greenhouse gas emissions by 30% by 2030.

Hydro Energy executive vice-president Arvid Moss said: “Hydro looks to green hydrogen as a way to reduce our aluminium’s carbon footprint even further, as well as a business opportunity on its own merits in the ongoing decarbonisation of the economy.

“Hydro Havrand can leverage a broad set of competencies within Hydro, and through its total offering help other industrial players succeed with their energy transitions.”

Earlier this year, Shell submitted licence applications for developing two offshore wind fields in Norway together with renewable energy companies BKK and Lyse.