MILAN (Reuters) - Italy's Tenaris will work with energy groups Edison and Snam on plans to use green hydrogen at one of its Italian steel mills, the companies said on Monday.
The project will mark the first time hydrogen has been used on an industrial scale to decarbonise the steel sector in Italy.
Hydrogen today is too expensive for widespread use but as costs fall, governments see it as a replacement for fossil fuels in areas where electrification is not an easy solution.
Last year Italy said it was targeting investments in the sector of around 10 billion euros ($12.2 billion) to 2030, saying it could be used in transport, heavy industry and natural gas pipelines.
"Green hydrogen can represent the ideal solution to decarbonise some key industrial sectors, in particular to produce zero-emission steel in the long term," Snam CEO Marco Alvera said.
The project aims to install a 20 megawatt electrolyser at Tenaris's Dalmine plant in northern Italy to allow the company to use green hydrogen instead of natural gas.
It might also involve the construction of a storage site to stock high-pressure hydrogen produced through electrolysis.
"Green" hydrogen is a zero-carbon fuel made by electrolysis, using renewable power from wind and solar to split water into hydrogen and oxygen.
European industry already uses millions of tonnes of hydrogen each year but it is mostly produced from coal or natural gas which is much cheaper than green hydrogen.
Snam, which makes most of its revenue from gas transport in Italy, has pledged to spend more on new green business lines like hydrogen.
Edison, which is owned by French power giant EDF, recently sold exploration and production assets as part of its strategy to focus on clean energy.
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(Reporting by Stephen Jewkes; editing by David Evans)