Essar Oil UK has unveiled plans to build a £750m hydrogen production hub at its Stanlow Refinery in Cheshire in a joint venture with Progressive Energy, developers of HyNet North West.

The joint venture will manufacture hydrogen for use across the HyNet region. It will also provide Essar Oil UK with hydrogen to decarbonise its energy demand in addition to creating a hydrogen economy across north-west England and north-east Wales.

Natural gas, and fuel gases from the refinery, will be converted into hydrogen, with carbon dioxide captured and stored offshore in sub-surface reservoirs in Liverpool Bay. The hydrogen production hub will deliver clean energy to industry in the HyNet low carbon cluster, as well as to fuel buses, trains and heavy goods vehicles, to heat homes, and to generate electricity.

The plan is to produce 3 terawatt-hours (TWh) of hydrogen each year from 2025. This will be followed by a facility twice the size giving a total capacity of over 9TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.

Chris Manson-Whitton, director at Progressive Energy, said: “We cannot reach net zero without decarbonising industry. Today brings a key milestone in that journey as Progressive Energy and Essar Oil UK sign a memorandum of understanding setting out how we will work together to deliver this exciting project at Stanlow Refinery.

“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. It will unlock the low carbon hydrogen economy in the North West, reducing emissions and creating and safeguarding jobs.”

Stein Ivar Bye, chief executive officer of Essar Oil UK, commented: “Essar is committed to innovative growth as a means to create positive impact to both economy and environment. 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 2 million tonnes of carbon dioxide to the atmosphere per year, the equivalent of taking nearly a million cars off the road.

“With the support from government to establish the appropriate business incentives, together with Progressive Energy, we are committed to undertaking the development and the financing of its construction.

“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.”