Speaking at the EU-Med 9 summit in Alicante on Friday, Spain's president announced the start of a new pipeline that will eventually carry hydrogen from Barcelona to Marseille in a project that will cost around €2.5 billion.
The aim is to supply hydrogen, which is generated from renewables rather than fossil fuels, and so help reduce Europe's reliance on Russia's gas and oil.
But it will take years to complete.
"H2MED, which will be operational at the end of this decade, will be able to transport, as the president of the Commission said, 10 percent of hydrogen consumption of the European Union by 2030 - about two million tonnes per year, " Pedro Sánchez said.
The President of the European Commission, Ursula von der Leyen, said it will help the EU to "build a real European hydrogen backbone".
Initially designed to temporarily transport gas from the Iberian Peninsula to the rest of the EU to reduce dependence on Russian gas, the H2Med will now only be used to transport hydrogen, said Antonio Costa, the prime minister of Portugal.
The decision not to transport fossil fuels was necessary to ensure that Brussels could declare it a "project of common interest," he added.
The governments involved hope to present the project before December 15th to apply for European funds that could cover up to 50 % of the infrastructure costs.