Joint venture partners Australian Gas Infrastructure Group and ENGIE's proposed "hydrogen park" to be co-located with North-East Water's Valley wastewater treatment plant has advanced to the next stage in obtaining crucial federal government funding.

The facility will create up to 40 jobs in its design and construction with several ongoing jobs in its first 20 years of operation.

The project will see a 10-megawatt electrolyser constructed to blend renewable hydrogen with natural gas at volumes of up to 10 per cent.

Renewable hydrogen natural gas blend will supply homes, businesses and industry in Albury-Wodonga through the existing gas distribution network.

It is among seven proposals to advance to the next stage of the federal government's $70 million Renewable Hydrogen Deployment Funding Round from an initial 36 expressions of interest.

Successful projects are expected to be announced in the first half of 2021 with the joint venture seeking more than $10 million.

AGIG chief executive Ben Wilson said the facility was a "major energy step-change" for a large regional population centre.

"Albury-Wodonga's new hydrogen footprint will showcase how regional communities and their backbone industries can capture the opportunities provided by a zero carbon fuel source to attract new business, skillsets and enhanced community lifestyles," he said.

"The facility is the latest in our push to emerge as a leading hydrogen developer in Australia with hydrogen projects now across four states under our long-term vision to eventually deploy renewable gas across our entire networks."

ENGIE's Hydrogen Business Unit.chief executive Michele Azalbert said her company was ready to contribute to the nation's hydrogen economy.

"This project is yet another example of how renewable hydrogen contributes to the energy transition by offering carbon-neutral energy to both the population and the industry," she said.

"AGIG's well-established network and experience, the support of the Australian government and the project's replicability can enable significant development of renewable hydrogen throughout the country."

Victorian Senator Jane Hume said: "This project has the potential to set Albury-Wodonga up as a leader in hydrogen fuel supply for the greater south eastern seaboard," she said.

"It is truly exciting to think such a pioneering project could take place here."