Portugal's main utility EDP announced on Friday it was setting up a new business unit to develop green hydrogen projects, primarily in Europe and the United States.
So-called green hydrogen, produced using renewable electricity, is seen as a key power source that can be used to reduce pollution from transport and power generation.
The company said in a statement it would also launch a dedicated storage unit, to be built by its renewable energy subsidiary EDP Renovaveis, which "will aim to achieve a storage capacity of 1 GW within five years".
EDP, which will present its new strategy for the next four years on Feb. 25, did not disclose how much it planned to invest in these two units.
"If we want to meet the goals of carbon neutrality, we will need to use other energy vectors, such as green hydrogen, to respond to sectors where electricity is not a technically viable or economically attractive option," Chief Executive Miguel Stilwell de Andrade said.
EDP wants to develop green hydrogen projects "in promising sectors" such as the steel and chemical industries, refineries and cement, as well as long-haul heavy transport.
"Priority markets will be the United States and Europe, leveraging the existing renewable and active pipeline and complementing the decarbonization solutions that the group offers to its customers", EDP said.
EDP is already working on the Behyond project, a partnership between Portugal and Norway to study the feasibility of offshore hydrogen production.
Portugal's government has selected more than 30 projects aimed at producing hydrogen, a cleaner energy source than fossil fuels, in the country after the coronavirus pandemic.
(Reporting by Sergio Goncalves; Editing by Andrei Khalip and Jan Harvey)