Essar to invest £2bn to slash emissions

Stanlow oil refinery owner Essar Group announces £2bn investment to cut North West carbon emissions by 20%. Tony McDonough reports

Stanley oil refinery operated by Essar Oil UK will see a reduction in its carbon emissions


Energy business Essar Group will look to slash carbon emissions in the North West by 20% in an investment programme worth more than £2bn.

Essar, which owns and operates the giant Stanlow oil refinery close to the River Mersey via its Essar Oil UK subsidiary, will invest more than £2bn to create a new division – Essar Energy Transition (EET). 

This is being set up to drive the changes which will include investment in both blue and green hydrogen, ammonia and biofuels. The money will be invested at Stanlow, Manchester and India.

EET will take on Essar’s joint venture with Progressive Energy to create Vertex Hydrogen. This will see a £2bn hub built at Stanlow to supply 1,000MW of blue hydrogen to manufacturers across the North West.

Blue hydrogen is produced by burning gas and then capturing the storing the carbon emissions to prevent them contributing to climate change. It is part of the £47bn Government-backed HyNet hydrogen project.

Essar will also invest in green hydrogen projects. Green hydrogen is produced by using electricity from renewable sources such as wind or solar to separate out hydrogen from water.

A controversial process, this will see the carbon captured at Stanlow and pumped out to be stored in depleted gas fields under Liverpool Bay.

Essar’s investments will be made across a range of hydrogen production technologies, decarbonisation, biofuels (road and aviation), and infrastructure projects. It claims this will reduce carbon emissions by 3.5m tonnes across the North West – 20% of the total.

READ MORE: Essar Oil UK back on track after torrid two years

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.

At the Stanlow refinery itself, Essar aims to achieve a 75% reduction in carbon emissions before the end of this decade. The facility currently supplies 16% of the UK’s total road fuels and aviation fuels to several airports.

EET managing partner, Tony Fountain, said: “EET’s ambitious investment plans will not only help deliver the UK’s net zero ambitions and the enormous environmental benefits therein, but will also secure the long term sustainable future for Stanlow.

It will protect and create new highly skilled job opportunities at the heart of the Northern Powerhouse economy for generations to come.”

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