U.S. engine maker Cummins (CMI.N) said on Monday it would build a plant in Spain to make electrolyser systems that will be used to produce green hydrogen, a zero-carbon fuel which advocates hope can help wean economies off planet-warming power sources.

U.S. engine maker Cummins plans plant for green hydrogen kit in Spain- oil and gas 360

Source: Reuters

Cummins said in a statement it would spend 50 million euros ($61 million) on the plant in central Spain, which it plans to open in 2023, creating 350 jobs.

It has partnered with global wind power leader Iberdrola (IBE.MC), which it will provide with electrolysers – which split water into hydrogen and oxygen – for a planned green hydrogen project in southern Spain.

The European Union is trying to increase its capacity to produce hydrogen, widely used in heavy industry, from renewable energy. The process is currently prohibitively expensive.

Cummins expects the Spanish factory to have capacity to produce about 500 megawatts of electrolysers every year, which it could scale up to more than 1 gigawatt per year.

($1 = 0.8187 euros)

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