Energy giant TotalEnergies (TOT) and industrial gas company Air Products (APD) announced a 15-year agreement for the annual supply of 70,000 tons of green hydrogen in Europe, starting in 2030.

The deal marks the first long-term contract awarded following TotalEnergies' call for tenders last year to secure 500,000 tons of green hydrogen annually to decarbonize its European refineries.

Under the agreement, Air Products will deliver the green hydrogen to TotalEnergies' Northern European refineries. This is expected to reduce carbon dioxide emissions by about 700,000 tons per year, the companies said in a joint statement.

The contract is a key step for TotalEnergies' goal of achieving a 40% reduction in net greenhouse gas emissions from its oil and gas operations by 2030 compared to 2015 levels.

"This deal with Air Products is a steppingstone towards our goal of decarbonizing the hydrogen used in our refineries in Northern Europe by the end of the decade," said Patrick Pouyanné, chairman and CEO of TotalEnergies.

The agreement also expands the partnership between the two companies. TotalEnergies will supply green power to Air Products to support their decarbonization efforts.

"We are honored to be the producer and supplier of the green hydrogen required by one of the world's largest energy companies," said Seifi Ghasemi, chairman, president and CEO of Air Products.

Ghasemi said Air Products' investment in clean hydrogen production is being validated by the growing demand. "This contract clearly demonstrates the demand is here, and it will only grow as we move forward in decarbonizing heavy industry and other sectors."