German utility Uniper and Shell will team up to jointly produce low-carbon hydrogen at a Uniper power station in Britain in a bid to boost use of the fuel and cut greenhouse gas emissions.

The project, located at Uniper's Killingholme power station in the East of England, will include a blue hydrogen production facility with a capacity of up to 720 megawatts - enough to heat more than half a million homes a year - using gas reformation technology with carbon capture and storage (CCS).

So-called blue hydrogen is produced by converting natural gas into hydrogen and storing the carbon dioxide (CO2) emissions from its production. The UK Government has set a target to capture 10 million tonnes of CO2 a year by 2030 through CCS.

The hydrogen produced could be used to decarbonise heavy industry, transport, heating and power in the Humber region, the companies said.

The captured CO2 could amount to 1.6 million tonnes a year and would be fed through the proposed Zero Carbon Humber onshore pipeline, part of the East Coast Cluster, selected as one of two CCS clusters to receive initial government support.

Shell and Uniper will now work on process design studies and site development activity, with a view to taking the project to front end engineering and design by 2023, they said.

Governments and energy companies are placing large bets on low-carbon hydrogen playing a leading role in efforts to lower greenhouse gas emissions, but costs are still high.