MADRID (Reuters) -Spanish oil and gas group Cepsa has signed a deal with the Dutch port of Rotterdam to ship green hydrogen from southern Spain to northern Europe, the oil company and the port said on Tuesday, confirming an earlier report by the Financial Times.

Countries and companies have seized on green hydrogen – a fuel obtained by passing renewably-produced electricity through water to split the element from oxygen – as a way to cut greenhouse gas emissions, especially from heavy industry.

Cepsa, which is diversifying into green energy, plans to take advantage of relatively cheap solar energy in the sunny Spanish region of Andalusia to boost hydrogen production up to 4.6 million tonnes by 2030, the companies said.

Spain is ideally placed to become a world leader in the production and export of green hydrogen, given its strategic location, abundant generation of renewable energies, and its robust energy infrastructures and key ports,” Cepsa’s CEO Marten Wetselaar said in the statement.

Cepsa could start shipping the hydrogen from the port of Algeciras on Spain’s southern tip as early as 2027 to a hub in Rotterdam, the statement added.

The hydrogen would be then be used to power industry in northern Europe after being pumped into pipelines towards Belgium and Germany.

Allard Castelein, the CEO of Rotterdam port’s authority, estimated 20 million tonnes of green hydrogen will flow through the port by 2050, only 2 million of which would be produced locally.

(Reporting by Inti Landauro; Editing by Kirsten Donovan, David Latona)