AMSTERDAM (Reuters) - Dutch paints and chemicals maker Akzo Nobel and gas network operator Gasunie plan to build Europe’s largest green hydrogen production plant in a bid to cut emissions, the companies said on Tuesday.

General view of the production line at AkzoNobel's new paint factory in Ashington, Britain September 12, 2017. REUTERS/Phil Noble - RC1C611E9D70

The facility, to be built in the northern part of the Netherlands, would use a 20 megawatt (MW) water electrolysis unit to convert sustainable electricity into hydrogen. That would mark an important step in scaling up the technology, which is seen as crucial for reducing carbon dioxide (CO2) emissions, the companies said.

Under pressure to meet strict CO2 emission goals, industrial companies and utilities hope to use excess wind and solar power to create hydrogen, which can then be stored for reconversion into power or for direct industrial use.

“This technology has enormous potential”, Akzo Nobel energy director Marcel Galjee told Reuters. “With this first step, we want to show the real possibilities for building a sustainable industry using green energy.”

The planned installation would produce around 3,000 tonnes of green hydrogen each year, which can either be used by Akzo’s specialty chemicals division or be sold to third parties, such as public transport companies using hydrogen buses.

Both companies will look for potential buyers in the coming months and will make a final decision on the project next year, with the building costs expected to run into the “tens of millions” of euros, Galjee said.

The eventual aim is to convert and store sustainable energy in the form of hydrogen on a much larger scale, with plants of at least 100 MW. So far, the largest planned unit in the Netherlands has a capacity of 1 MW.

Industrial factories in the Netherlands currently use more than 800,000 tons of hydrogen produced by natural gas each year.

“Replacing this by sustainably produced hydrogen will reduce CO2 emissions by seven million tonnes”, Galjee said. “However, the real potential is in large-scale production as the basis for green chemistry.”

Akzo Nobel is one of the most energy-intensive companies in Europe. It says it currently uses renewable sources for 40 percent of its total energy need and aims to be CO2-neutral by 2050.