The two companies will together develop technologies in the sector and invest in commercial projects to produce, distribute, compress and store the gas.

The deal is the latest move by companies in Europe, Asia and beyond to develop hydrogen usage, eyeing the benefits of a gas that can be produced without generating carbon emissions if renewable power is used in the electrolysis process.

"Hydrogen is expected to play a significant role in achieving the European Green Deal targets," Linde CEO Steve Angel said, referring to the European Union's initiative to move to a so-called circular, sustainable economy.

Linde, which has the largest liquid hydrogen capacity and distribution system in the world, last month said it planned to invest in hydrogen, where it already had a clear presence.

Hydrogen today is too expensive for widespread use, but as costs fall governments are looking at it as a replacement for fossil fuels in sectors where electrification is not an easy solution.

Snam, which makes most of its revenue from gas transport in Italy, has pledged to spend more on new green business lines and has signed a flurry of hydrogen deals this year.

About half the investments in its recent business plan were earmarked for "hydrogen-ready" infrastructure.

Snam and Linde are both shareholders of ITM Power, a British company operating in the green hydrogen sector.

(Reporting by Stephen Jewkes; Editing by David Goodman)