Essar Oil UK achieves new milestone in transition to low carbon operations
London, August 17, 2022
Essar Oil UK has achieved a new milestone in its ongoing transition to low carbon operations, following the UK Government’s decision to shortlist the construction of a new hydrogen project and separate carbon capture project at its site in Ellesmere Port, Cheshire.
The announcement by the Department for Business, Energy & Industrial Strategy (BEIS) confirmed that the projects had been selected as part of the UK Government’s Carbon Capture, Usage and Storage (CCUS) Cluster Sequencing programme, a press release from the company, a part of the Essar Group, said.
The release said the new hydrogen plant would help Essar deliver its goal of producing 3.8GW of low carbon hydrogen by the end of the decade – almost 40% of the Government’s recently extended target of achieving 10GW by 2030.
Part of HyNet, the plant is being built by Vertex Hydrogen and will significantly reduce CO2 emissions every year. The project will also create thousands of new jobs in the North West and North Wales, it said.
The installation of industrial carbon capture technology at the Stanlow refinery, which will enable the direct capture of more than 800,000 tonnes of CO2 per year, is also shortlisted.
"The two projects form just part of the company’s £1 billion investment in a range of energy efficiency, low carbon energy and carbon storage initiatives, designed to decarbonise its production processes and put Essar at the forefront of the UK’s shift to low carbon energy. The company has plans underway to reduce its emissions by 90% before the end of the decade," the release said.
As part of Essar’s ongoing investment, the company announced in February its plans to install a new £45 million furnace, capable of running 100% on hydrogen – the first of its kind in the UK. The furnace will arrive at Stanlow in August via the Manchester Canal, becoming fully operational in 2023. It will deliver major improvements to onsite energy efficiency and has the potential to reduce 242,000 tonnes of CO2 every year once it is powered by hydrogen from 2026.
Deepak Maheshwari, Chief Executive Officer at Essar Oil UK, said: “Essar Oil UK continues to deliver on its promise of leading the UK’s low carbon transition. Our programme of major investment is decarbonising our own operations and supporting the development of low carbon economy across the North West and North Wales, creating thousands of jobs and securing the long-term future of this crucial facility.”
Essar is a UK-focused downstream energy company whose main asset is the Stanlow Manufacturing Complex, one of the most advanced refineries in Europe situated close to the major cities of Liverpool and Manchester.
The company is a major supplier in the North West and beyond with customers including most of the major retail brands operated by international oil companies and supermarkets, Manchester Airport, leading commercial airlines and the region’s trains and buses.
Since acquiring Stanlow in 2011, Essar has invested $1 billion in margin improvement and other efficiency initiatives to ensure the refinery remains competitive in a rapidly changing market. Essar Oil (UK) is committed to becoming the UK’s first low-carbon refinery, investing £1billion over the next five years to support the development of the UK hydrogen economy and to decarbonise its operations.
The company launched Vertex Hydrogen in January 2022. Vertex is a joint venture between Essar Oil (UK) and Progressive Energy and sits at the heart of HyNet, the UK’s leading industrial decarbonisation cluster.
Vertex plans to construct two new low carbon hydrogen production units with a planned total investment of £1 billon to deliver the hydrogen production hubs. Follow on capacity growth is planned to reach nearly 40% of the UK Government’s new target of 10GW of low carbon hydrogen for power, transport, industry and homes by 2030.
Hydrogen from Vertex will be used to decarbonise Essar Oil (UK)’s production processes, along with lowering the emissions of other neighbouring business.