Alstom, Snam agree to develop hydrogen trains in Italy

By Stephen Jewkes

MILAN (Reuters) - France's Alstom SA <ALSO.PA> and Italian gas group Snam <SRG.MI> have signed a five-year agreement to develop hydrogen trains in Italy, the two companies said in a joint statement on Thursday.

Under the terms of the deal Alstom will manufacture and maintain new or converted hydrogen trains, while Snam will build the infrastructure to produce and transport the hydrogen for refuelling.

The aim is to have plans to build hydrogen-powered trains and the related infrastructure in place by the start of 2021.

"Hydrogen produced from renewables will become competitive with fossil fuels in a few years and will play a key role in the energy transition, particularly in industry, heating and heavy transport," Snam Chief Executive Marco Alvera said.

The promise of hydrogen as a fuel to help power vehicles and energy plants has been a talking point since the 1970s though it is currently too expensive for widespread use.

But proponents say infrastructure investment and more demand from transport, gas grids and industry will bring costs down, and Brussels is coming under pressure to use its post-crisis recovery plan to support the industry.

French TGV high-speed train maker Alstom already has what it has called the world's first hydrogen powered train, the Coradia iLint, in service in Germany.

Snam, Europe's biggest gas pipeline company, last year set up a hydrogen unit as part of its plans to spend more money on new green business lines.

(Reporting by Stephen Jewkes; Editing by Gianluca Semeraro and Jan Harvey)