Essar Oil UK - Stanlow Refinery reduced

Essar Oil UK has moved a step closer to becoming a major producer of low-carbon hydrogen in the UK, following the 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 have been selected as part of the government’s Carbon Capture, Usage and Storage (CCUS) Cluster Sequencing programme.

The new hydrogen plant will 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 increased target of achieving 10GW by 2030.

The installation of industrial carbon capture technology at the Stanlow refinery, which will enable the capture of more than 800,000 tonnes of CO2 per year, is also shortlisted.

The two projects form part of the company’s £1bn investment in a range of energy efficiency, low-carbon energy and carbon storage initiatives, designed to decarbonise its production processes.

The company has plans under way to reduce its emissions by 90% before the end of the decade.

As part of Essar’s investment, the company announced in February its plans to install a new £45mn 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, commented: “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 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.”