The two firms are drawing up plans to produce hydrogen and capture CO2 at an oil refinery in Ellesmere Port
Plans for a major hydrogen production hub are being drawn up in Cheshire, where oil refining firm Essar and technology specialist Progressive Energy are aiming to capture carbon for storage below Liverpool Bay while producing low carbon fuel for heavy industry, transport, and home heating.
The joint venture, announced today, aims to invest £750m to create two plants to convert natural gas and fuel gases from Essar Oil UK's refinery in Ellesmere Port into low carbon hydrogen, with resulting CO2 emissions captured and stored offshore in sub-surface reservoirs below Liverpool Bay, the companies said.
Hydrogen produced at the facilities would then be used to supply heavy industry and manufacturing at the HyNet North West industrial decarbonisation cluster in the region, which is being spearheaded by Progressive Energy alongside a host of manufacturers backed by £7.5m of government funding.
The hydrogen could also be used to fuel buses, trains, and heavy goods vehicles, as well as to heat homes or provide storage capacity for energy produced by wind and solar facilities in the region, the companies said.
The project would create the UK's first low carbon hydrogen production hub, the companies claim, and play a major role in ramping up production of the fuel in line with the government's net zero ambitions to bring 5GW of low carbon hydrogen production capacity online by 2030.
Chris Manson-Whitton, director at Progressive Energy, said the project would help to develop a hydrogen economy in the North West of England and North East Wales, while cutting CO2 emissions and creating and safeguarding local jobs.
"We cannot reach net zero without decarbonising industry," he said. "Delivering net zero requires a transformation of our energy system. HyNet offers a once-in-a-generation opportunity to create real change in energy production and consumption, creating a cleaner world for future generations."
Under the plans, the hub at Essar's Stanlow Refinery would initially produce three terawatt-hours (TWh) of low carbon hydrogen each year from 2025, which would be "quickly followed" by another facility twice the size to bring total hydrogen production capacity at the hub to over 9TWh per year.
Such capacity would be equivalent to the energy required for heating across the whole of Liverpool, while further capacity is also envisaged at the site which could help deliver up to 80 per cent of the government's 5GW hydrogen production capacity target for 2030, the firms claim.
The project is set to be jointly delivered by the two companies, bolstered by funding from the government's hydrogen supply competition.
Stein Ivar Bye, CEO of Essar Oil UK, said hydrogen production was "integral" to the firm's strategy for the Stanlow Refinery. "HyNet and hydrogen production is integral to Stanlow's strategy and will set it on a journey to be the UK's first net zero emission refinery with the ambition to avoid emissions of over two million tonnes of carbon dioxide to the atmosphere per year, the equivalent of taking nearly a million cars off the road," he said. "Hydrogen has a central role to play in our low carbon energy solution. We are demonstrating that the industry is committed to play its part of the UK's transformational hydrogen strategy."
Ramping up production of hydrogen - a versatile fuel that produces zero emissions when burned - was a key pillar of the Prime Minister's 10 Point Plan for a Green Industrial Revolution unveiled late last year, and the technology has attracted increasing interest from a raft of energy, engineering, and transport companies as investors and policymakers explore how best to tackle emissions from hard to decarbonise sectors.
The latest announcement follows news yesterday that the Hydrogen Council, a global coalition of CEOs committed to accelerating the clean energy transition through the rapid expansion of the nascent low carbon and green hydrogen industry, has swelled to 109 members across 20 countries around the world, after adding a host of new supporters last year.
The group's new members cover the breadth of the hydrogen economy, including gas firms Uniper, Tokyo Gas, and Petronas; investors GIC and Natixis; chemicals firms Chemours, SABIC, and Solvay; shipping and logistics specialist MSC Group; and solar firm ACME, among others.
"We're delighted to welcome 17 new companies to our global initiative," asid Benoît Potier, chairman and CEO of Air Liquide and co-chair of the Hydrogen Council. "The variety of industries and geographies represented in the Hydrogen Council demonstrates a widespread understanding that hydrogen is a key element of the global effort for a low-carbon future. Our group will continue to play its strategic guidance role to bring hydrogen markets to scale."