LONDON: BP has invested in a start-up company developing technology seeking to use vapour from heavy industry to sharply reduce the production costs of zero-carbon hydrogen.

BP Ventures, the British energy giant’s venture capital arm, was among several investors in a $12.5 million Series A financing in US-based Advanced Ionics, the companies said on Tuesday.

Other investors include Mitsubishi Heavy Industries , Clean Energy Ventures and GVP Climate.

Green hydrogen, produced by splitting water through electrolysis using renewable energy, is expected to play a key role in decarbonising transport and industries.

But it is produced today on a very small scale and costs up to five times more than the most common hydrogen produced from natural gas, which is highly carbon-intensive.

The investment will allow Advanced Ionics to accelerate the small-scale deployment of its water vapour-based electrolysers for heavy industry.

The technology, Symbion, uses heat emitted from a plant’s existing operations to drive the electricity use to less than 35 kilowatt hours (kWh) per kilogram of hydrogen compared with more than 50 kWh per kilogram for a typical electrolyser, according to Advanced Ionics.

It sharply reduces the cost of electricity for the electrolysis process, which accounts for more than 70% of green hydrogen production costs, the company said. The lower electricity consumption will drive the cost of green hydrogen to less than $1 per kilogram, which is less than most fossil-fuel based production, it said.