Germany's largest energy group E.ON announced signing a memorandum of understanding with the green power arm of Australian miner Fortescue Metals to explore shipping green hydrogen to Europe and help wean itself off Russian gas.

The agreement with Fortescue Future Industries (FFI) will look at ways to ship up to 5 million tonnes of hydrogen generated from renewables to Europe per year by 2030, the two companies said in a statement.

That roughly corresponds to one third of the heating energy Germany imports from Russia each year, or 165 terawatts of capacity, FFI Chairman Andrew Forrest said. Overall, Russian gas accounted for 55% of German imports of the fuel last year.

"Green energy will reduce fossil fuel consumption dramatically in Germany and quickly help substitute Russian energy supply, while creating a massive new employment intensive industry in Australia," Forrest said.

The companies did not disclose the volume of investment that was needed to realise the project, which hopes to bring green hydrogen generated via wind and sun in Australia by ship to Europe from as soon as 2024.

"The agreement between E.ON and FFI is a major step forward and puts them in pole position for the delivery of green hydrogen to German industry," German Economy Minister Robert Habeck said in a statement.

Germany is desperately trying to diversify away from Russian gas but faces challenges replacing it, with Habeck saying last week that will not happen before summer 2024.

The country aims to build a world-leading hydrogen industry but the technology remains too expensive for the time being.