Tokyo Electric Power Company Holdings Inc.'s thermal power generation unit will team up with a subsidiary of JXTG Holdings Inc. to start producing hydrogen for fuel cell vehicles in 2020.

Tepco Fuel & Power Inc. said Friday that it and JXTG Nippon Oil & Energy Corp. have agreed to build a facility to produce hydrogen on the premises of the Tepco subsidiary's power plant in Tokyo because a private-public effort is underway to spread the use of hydrogen as an alternative to fossil fuels.

The new facility will be capable of supplying hydrogen to about 290 fuel cell cars a day.

The government is promoting the use of hydrogen in an effort to showcase the clean technology during the 2020 Tokyo Olympics and Paralympics. The Tokyo Metropolitan Government and bus firms plan to operate over 100 fuel cell buses during the games.

The latest hydrogen deal will involve Tepco Fuel & Power's operations, which are set to be transferred to Jera Co., an energy joint venture it set up with Chubu Electric Power Co., in April.

Fuel cell vehicles are powered by electricity generated by the chemical reaction between hydrogen and oxygen and do not emit carbon dioxide. Unlike systems based on directly supplied electricity, a fuel cell can store hydrogen until needed without losing its charge.

But spreading the use of hydrogen remains a challenge due to the high costs and lack of infrastructure, especially fuel stations.

Following the triple core meltdown at the Fukushima No. 1 power plant in 2011, there has been growing public interest in renewable energy in resource-scarce Japan.

Under the 2015 Paris climate accord, Japan is aiming for a 26 percent cut in greenhouse gas emissions by 2030 from 2013 levels.

In the private sector, Toyota Motor Corp. and Honda Motor Co. have already developed hydrogen-powered FCVs.