Spain has granted preliminary approval to gas grid operator Enagas to begin developing the country’s portion of a planned trans-European hydrogen pipeline and related infrastructure.

According to a Reuters news report, the decision, which was made on Tuesday, July 30, is part of its push to become a European hub for green hydrogen, a clean energy source produced using renewable electricity. The move marks a step forward for Enagas’s transition from natural gas to hydrogen.

Enagas plans to invest about 3.2 billion euros ($3.5 billion) through 2030 on hydrogen projects, including the flagship H2MED pipeline, which aims to connect the Iberian Peninsula to France and Central Europe by 2030. 

Currently, the company is collaborating with energy companies in France, Germany, and Portugal to ensure a successful project delivery.

The government’s preliminary approval covers hydrogen projects considered essential for European energy security. It extends to part of the H2MED corridor, including a pipeline linking Spain and Portugal, and an underwater pipeline linking Spain to France dubbed BarMar.

The government also authorized the development of hydrogen storage facilities as part of the decision. While the approval is a significant step, the government said it is provisional and did not specify the next steps before construction can begin.

Green hydrogen, produced using renewable energy, is seen as crucial for decarbonizing Europe’s economy. However, high production costs mean most green hydrogen projects require government subsidies.