JERA, Japan¡¯s top power generator, said on Monday it has agreed with Exxon Mobil to jointly explore the development of a low-carbon hydrogen and ammonia production project in the United States.

Exxon is developing what is expected to be the world¡¯s largest low-carbon hydrogen production plant at its Baytown Complex east of Houston in Texas, with an annual output capacity of about 900,000 metric tons of hydrogen and more than 1 million tons of ammonia. The project aims to start production in 2028.

Under the agreement, JERA may invest in the project and buy about 500,000 tons annually of low-carbon ammonia from the project for demand in Japan, it said in a statement.

Ammonia is seen as an effective future energy source. It does not emit carbon dioxide when burned, though its production releases emissions if it is made with fossil fuel.

¡°Cooperation among leading companies is essential to establish supply chains for ammonia, hydrogen, and other products that are key to zero-emission thermal power,¡± said Steven Winn, JERA¡¯s senior managing executive officer.

Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in the same statement: ¡°Building world-scale projects for new markets requires supply, demand and supporting regulation to all come together in sync.¡±

Japan, the world¡¯s fifth-biggest emitter of carbon dioxide, has been promoting ammonia as an alternative fuel to help reduce carbon dioxide emissions at coal-fired power plants and other factories.

It aims to grow its demand for ammonia as a fuel to 3 million tons by 2030 as it pushes to achieve its goal of becoming carbon neutral by 2050.

JERA is set to start a trial this week of co-firing 20% of ammonia with coal at its Hekinan thermal power station in central Japan, in what it said will be the world¡¯s first trial using a large amount of the gas at a major commercial plant.

Environmentalists have, however, criticized the move as a way to extend the life of dirty coal-fired power generation.