Essar project chosen by the UK Government

  • Vertex Hydrogen, a leading low carbon hydrogen production project, chosen by UK Government.
  • Vertex Hydrogen is a key part of Essar Energy Transition which is planning investment of US$3.6 billion in developing a range of low carbon energy transition projects to support the UK’s decarbonisation strategy.

London 30 March 2023: Essar welcomes the Department for Energy Security and Net Zero’s (DESNZ), cluster sequencing Phase-2 announcement confirming that EET’s Vertex Hydrogen project has been chosen as part of one of the two hydrogen plants that will help build the UK’s hydrogen economy.  

The announcement follows the UK Government’s commitment to providing up to £20bn in funding for early deployment of carbon capture, usage and storage (CCUS) to help meet its climate commitments.  The funding supports private investment and job creation in locations including the North West of England, Essar’s UK home.  This development supports Essar’s commitment to major investment in the UK in support of the UK Government’s net zero ambitions.

Recently, Essar launched Essar Energy Transition (EET) to invest US$3.6 billion in developing a range of low carbon energy transition projects over the next five years, of which US$2.4 billion will be invested at the Stanlow site in Ellesmere Port, between Liverpool and Manchester.

This plan includes Vertex Hydrogen which will produce some 350MW of hydrogen from 2026, making it one of the UK’s leading low carbon hydrogen businesses.  Some 600 thousand tonnes of CO2 will be captured and stored using HyNet’s carbon-capture infrastructure - the equivalent to taking around 250,000 cars off the road.

Vertex provides vital but ‘hard to abate’ industrial and power generation businesses with a route to decarbonise delivering job certainty and growth in a globally emerging sector.  The direct investment in the production plant will be nearly £500 million and is a critical first step in building a hydrogen economy in the North West.

Vertex is also rapidly progressing a second plant (HPP2) for 700MW into Front-End-Engineering-Design.  This will be completed in 2023, positioning Vertex as the enabler of a broader hydrogen economy in the North West. The HPP2 plant has today received support from the Net Zero Hydrogen Fund as part of its development.

Prashant Ruia, Director, Essar Capital, said:

“I welcome and thank the UK Government for their support to our investment. This enables us to confidently move forward with our plans in EET to build a premier energy transition hub in the North West of the UK, anchored around our Stanlow Refinery.  Today, huge progress has been made.  We are more confident than ever in the potential of our UK site, with its core contribution to HyNet, to play a vital role in the UK’s decarbonisation strategy and to act as a catalyst for significant investment in our region.  We are demonstrating how legacy industrial businesses can become part of the solution, and drive decarbonisation across the North West’s industrial heartlands”. 

EET will include:

  • Essar Oil UK, the company’s refining and marketing business in North West England;
  • Vertex Hydrogen, which is developing 1 gigawatt (GW) of low carbon hydrogen for the UK market, with follow-on capacity set to reach 3.8GW;
  • EET Future Energy, which is developing 1 GW of green ammonia in India, targeted at UK and international markets;
  • Stanlow Terminals Ltd, which is developing enabling storage and pipeline infrastructure; and
  • EET Biofuels, which is investing in developing 1 MT of low carbon biofuels.

EET’s strategy is founded on the fact that hydrogen and biofuels are fast becoming globally significant fuels of the future and that the UK is positioned strongly to spearhead the rapid growth of the European low carbon fuels market.  The UK already benefits from an advanced regulatory and policy framework to support low carbon energy production, including the UK government’s target of achieving 10GW of hydrogen production by 2030. 

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.  As a core part of the HyNet cluster, Essar’s Stanlow site is in one of the only two hydrogen clusters in the country to potentially be supported through to full operations.  The Stanlow refinery itself will also achieve a 75% reduction in carbon emissions before the end of this decade and net zero by 2040.

In addition to the US$2.4 billion investment in the UK, EET will also invest US$1.2 billion in developing a cost-efficient global supply hub for low carbon fuels in India.