Essar welcomes the Department for Energy Security and Net Zero’s (DESNZ), cluster sequencing Phase-2 announcement confirming that EET’s Vertex Hydrogen project has been chosen as part of one of the two H₂ plants that will help build the UK’s H₂ economy.

The announcement follows the UK Government’s commitment to providing up to £20 B in funding for early deployment of carbon capture, usage and storage (CCUS) to help meet its climate commitments.  The funding supports private investment and job creation in locations including the Northwest of England, Essar’s UK home.  This development supports Essar’s commitment to major investment in the UK in support of the UK Government’s net zero ambitions.

Recently, Essar launched Essar Energy Transition (EET) to invest $3.6 B in developing a range of low carbon energy transition projects over the next five years, of which $2.4 B will be invested at the Stanlow site in Ellesmere Port, between Liverpool and Manchester.

This plan includes Vertex Hydrogen which will produce some 350 MW of H₂ from 2026, making it one of the UK’s leading low-carbon H₂ businesses. Some 600,000 tons of CO₂ will be captured and stored using HyNet’s carbon-capture infrastructure–equivalent to taking around 250,000 cars off the road.

Vertex provides vital but hard to abate industrial and power generation businesses with a route to decarbonize delivering job certainty and growth in a globally emerging sector.  The direct investment in the production plant will be nearly £500 MM and is a critical first step in building a H₂ economy in the Northwest.

Vertex is also rapidly progressing a second plant (HPP2) for 700 MW into front-end engineering design. This will be completed in 2023, positioning Vertex as the enabler of a broader H₂ economy in the Northwest. The HPP2 plant has received support from the Net Zero H₂ Fund as part of its development.

Prashant Ruia, Director, Essar Capital, said, “I welcome and thank the UK Government for their support to our investment. This enables us to confidently move forward with our plans in EET to build a premier energy transition hub in the Northwest of the UK, anchored around our Stanlow Refinery. Today, huge progress has been made. We are more confident than ever in the potential of our UK site, with its core contribution to HyNet, to play a vital role in the UK’s decarbonization strategy and to act as a catalyst for significant investment in our region. We are demonstrating how legacy industrial businesses can become part of the solution, and drive decarbonization across the North West’s industrial heartlands.”

EET will include:

• Essar Oil UK, the company’s refining and marketing business in Northwest England
• Vertex Hydrogen, which is developing 1 gigawatt (GW) of low-carbon H₂ for the UK market, with follow-on capacity set to reach 3.8 GW
• EET Future Energy, which is developing 1 GW of green ammonia in India, targeted at UK and international markets
• Stanlow Terminals Ltd, which is developing enabling storage and pipeline infrastructure
• EET Biofuels, which is investing in developing 1 MMt of low carbon biofuels.

EET’s strategy is founded on the fact that H₂ and biofuels are fast becoming globally significant fuels of the future and that the UK is positioned strongly to spearhead the rapid growth of the European low-carbon fuels market. The UK already benefits from an advanced regulatory and policy framework to support low-carbon energy production, including the UK government’s target of achieving 10 GW of H₂ production by 2030.

Such is the scale of the market growth opportunity that EET estimates approximately two-thirds of its aggregate cash flows could come from diversified low carbon sources before the end of the decade.  As a core part of the HyNet cluster, Essar’s Stanlow site is in one of the only two hydrogen clusters in the country to potentially be supported through to full operations. The Stanlow refinery itself will also achieve a 75% reduction in carbon emissions before the end of this decade and net zero by 2040.

In addition to the $2.4-B investment in the UK, EET will also invest $1.2-B in developing a cost-efficient global supply hub for low carbon fuels in India.