Here's why the Lion Energy (ASX: LIO) share price is roaring 28% higher

Lion Energy is working to increase the use of hydrogen in Australia's transport sector.

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The Lion Energy Ltd (ASX: LIO) share price is having a brilliant day on the ASX after the company announced a new hydrogen transport agreement.

The producer of Indonesian oil and gas and explorer of Australian hydrogen has signed a memorandum of understanding with BLK Auto. Together, the companies plan to increase opportunities for hydrogen use in Australia's transport sector.

At the time of writing, the Lion Energy share price is 10.5 cents, 28.05% higher than its previous closing price.

Let's take a closer look at today's news from Lion Energy.

Lion Energy looks to decarbonise vehicle fleets

Tuesday's proving to be a great day for the Lion Energy share price after the company announced a new agreement with Queensland-based hydrogen vehicle importer BLK Auto.

Last month, BLK Auto, alongside its partner, hydrogen vehicle supplier Hyzon Motors (NASDAQ: HYZN), unveiled Australia's first hydrogen-powered bus.

Now, BLK Auto will be collaborating with Lion Energy. The two will provide hydrogen transport solutions and infrastructure for Australian businesses looking to decarbonise their vehicle fleets.

Lion's chair Tom Soulsby commented on the news driving the company's share price higher today, saying:

We are very pleased to work with quality operators like BLK Auto on helping the bus industry meet its zero-emission targets. There is a complementarity in our plans, so working together will enhance the hydrogen proposition for bus operators.

The memorandum of understanding is non-binding and will be in place for the next 2 years.

Lion Energy cautions that there's a possibility the companies won't find a suitable hydrogen opportunity.

Lion Energy share price snapshot

Today's gains have added to the Lion Energy share price's recent strong performance on the ASX.

Right now, the company's stock's value is 330% higher than it was at the start of 2021. It has also gained 168% over the last 30 days.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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