Marubeni Corp has agreed to research clean hydrogen production in Saudi Arabia with the kingdom's sovereign wealth fund, the Japanese trading house announced on Thursday, as Riyadh seeks to reduce its reliance on oil.

Saudi Arabia, a major oil producer and member of the Organization of Petroleum Exporting Countries, is looking to diversify its economy by incorporating alternative energy sources such as cleaner fuels and renewables.

According to the Japanese firm, Marubeni and the Saudi sovereign Public Investment Fund (PIF), which is central to the kingdom's goal of reducing reliance on oil, have agreed to conduct a feasibility study for producing clean hydrogen for both domestic and international markets.

PIF, which manages more than $600 billion in assets, announced last year that it plans to invest more than $10 billion in eligible green projects by 2026, including renewable energy, clean transportation, and sustainable water management.

Saudi Arabia, which plans to reach net zero emission by 2060, also by developing carbon capture and storage hubs, may bring the target forward if the technology allows.