The newly-listed Siemens Energy has signed a memorandum of understanding with Siemens Mobility to “jointly develop and offer hydrogen systems for trains.”

Announced on Monday, the partnership is the latest example of companies attempting to ramp up and expand the use of hydrogen fuel-cell technology.

The collaboration will look to produce “a standardized hydrogen infrastructure solution for fueling the hydrogen-powered trains of Siemens Mobility.”

In addition, the idea is that the products of the partnership will be offered to external customers in order to “promote the hydrogen economy in Germany and Europe and support decarbonization in the mobility sector.”

The broad aim is to link up Siemens Energy’s work on the production of green hydrogen – a term that refers to hydrogen produced using renewable sources such as wind and solar – with Siemens Mobility’s specialism in transportation.

According to the International Energy Agency (IEA), hydrogen is a “versatile energy carrier.” Generating it does have an environmental impact, however.

The IEA has said that hydrogen production is responsible for roughly 830 million metric tons of carbon dioxide each year. It’s within this context that the idea of green hydrogen is so attractive.

“Working together with Siemens Mobility, we want to drive sector coupling by developing, among other things, an electrolysis and fueling solution for the fast fueling of hydrogen-powered trains,” Armin Schnettler, who is executive vice president of Siemens Energy’s New Energy Business, said in a statement.

Siemens shareholders voted to spin off the industrial giant’s energy business back in July. The standalone firm, Siemens Energy, made its debut on the Frankfurt Stock Exchange last week. Its largest shareholder is Siemens. Siemens Mobility remains part of the larger Siemens organization.

Hydrogen fuel-cell plane

Elsewhere, trials of a hydrogen-powered train in the U.K. got underway at the end of September, while

By Christoph Steitz and Alexander Hübner

FRANKFURT/MUNICH (Reuters) – Shares in Siemens Energy

opened lower than expected on their first day of trading on the Frankfurt stock exchange, as Germany’s biggest-ever spin-off gears up for a challenging future independent from parent Siemens

.

Shares in Siemens Energy – which makes gas turbines, power transmission systems and holds a 67% stake in Siemens Gamesa

– opened at 22.01 euros apiece on Monday, giving the company a market value of 16 billion euros ($18.6 billion).

A source had previously said estimates were for a market valuation of between 21-22 billion euros.

Shares eventually closed at 21.21 euros, down 3.6% from the first price, after trading in a range of 19.21-22.98 euros during the session. This puts Siemens Energy’s market capitalisation at 15.4 billion euros.

“I have repeatedly pointed out that we expect volatility to be high in the first few weeks,” Siemens Chief Financial Officer Ralf Thomas told Reuters. “It’s not a situation specific to Siemens Energy, it’s the same with every spin-off.”

Siemens Energy is Germany’s largest spin-off ever, even surpassing Lanxess

and Covestro <1COV.DE>, which were both spun off from Bayer

.

For Siemens AG investors the deal has paid off: They have received one Siemens Energy share for every two shares they own in the former parent. Yet Siemens shares traded only 1.7% below Friday’s closing price, a tiny discount given a substantial part of the conglomerate has been spun out in a separate listing.

Thomas said it would take until at least mid-October to get a first idea of how Siemens Energy, which competes with General Electric

and Mitsubishi Heavy Industries <7011.T>, will be valued.

Spun off from Siemens due to weak profit margins, the unit is expecting an adjusted margin of not more than 1% in 2020