Air Products and Chemicals, Inc. ( APD ) shares are trading higher after it inked a 15-year agreement with TotalEnergies SE ( TTE ) to supply 70,000 tons of green hydrogen annually in Europe, starting in 2030.

Under the agreement, Air Products will supply green hydrogen to TotalEnergies’ Northern European refineries, reducing CO2 emissions by 700,000 tons annually.

This first long-term deal follows TotalEnergies’ call for tenders to supply 500,000 tons of green hydrogen per year to decarbonize its European refineries.

This contract supports TotalEnergies’ goal of reducing net greenhouse gas emissions from its operations (Scope 1+2) by 40% by 2030 compared to 2015 levels.

Also, Air Products has committed over $15 billion to large-scale energy transition projects and launched several major low-carbon hydrogen initiatives worldwide, establishing itself as a reliable supplier.

Simultaneously, TotalEnergies and Air Products penned a memorandum of understanding for the supply of renewable power, including an initial Power Purchase Agreement (PPA) for 150 MW from a solar project in Texas.

The companies also plan to further explore PPA opportunities in the U.K., Poland, and France.

Patrick Pouyanné, Chairman and CEO of TotalEnergies said, “This deal with Air Products, the first signed following the call for tenders launched last year, is a steppingstone towards our goal of decarbonizing the hydrogen used in TotalEnergies’ refineries in Northern Europe by the end of the decade.”

“Once again, we demonstrate our capacity to pioneer the energy transition and contribute to the emergence of a green hydrogen industry by offering long-term contracts with our six refineries and two biorefineries in Europe.”

Air Products’ Chairman, President and CEO Seifi Ghasemi commented, “We always believed that if we made clean hydrogen available at commercial scale, the demand would be there. This contract validates our long-term strategy. Clearly the demand is here, and it will grow significantly as we move forward, playing an essential role in decarbonizing heavy industry and other sectors.” 

Investors can gain exposure to APD via IShares Energy Storage & Materials ETF ( IBAT ) and IShares U.S. Basic Materials ETF ( IYM ) .

Price Action: APD shares are up 3.66% at $279.58 at the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.