Work on a huge facility that would have the capacity to generate as much as 1 gigawatt of “blue hydrogen” by 2030 was being carried out by BP, the company said on Thursday.

The so-called blue hydrogen is referred to that hydrogen that is generated using natural gas and the CO2 emissions generated during the process is captured and stored.

This proposed development project was described by BP as the United Kingdom’s “largest hydrogen project” and the company plans to set up the facility in Teesside, north-east England.

The H2Teesside development would be able to “capture and send for storage” as much as two million metric tons of carbon dioxide every year, claimed the oil and gas giant. The United Kingdom government has set a target of being able to develop a generation of capacity of 5 GW of low-carbon hydrogen by 2030.

Hydrogen has a diverse range of applications and has been described as a “versatile energy carrier” by the International Energy Agency. The hydrogen that would be generated by the H2Teesside could also generate enough energy to residential homes and industry or “be used as a fuel for heavy transport” among other uses, said BP.

The company would make a final decision on the investment for the project in 2024. BP saud that the project would be able to reach 500 megawatts of capacity in production by 2027 or earlier if everything goes according to its plan. Capacity refers to the maximum amount a facility can produce.

“Blue hydrogen, integrated with carbon capture and storage, can provide the scale and reliability needed by industrial processes,” Dev Sanyal, who is BP’s executive vice president of gas and low carbon energy, said in a statement.

“It can also play an essential role in decarbonising hard-to-electrify industries and driving down the cost of the energy transition,” he added.

There are a number of ways that hydrogen can be produced.

Electrolysis is another method in which water is split into oxygen and hydrogen with the use of an electric current. And if the hydrogen thus generated is produced through a renewable source such as wind or solar, it is called by some as “green” or “renewable” hydrogen.

The important role that hydrogen could play in the de-carbonization of energy intensive industries was stressed upon by the incoming CEO of German utility RWE earlier this week.

Hydrogen was described as “definitely one of our long-term growth areas”, by Markus Krebber — who is currently RWE’s chief financial officer.

“What makes us so optimistic is that, currently, hydrogen is the only technical solution to decarbonize parts of … energy intensive industry, aviation, maritime, but also heavy-duty transportation,” Krebber said, adding that his company was “very well placed to play a very relevant role.”

(Adapted from CNBC.com)