Essar and Progressive Energy have joined forces to set up a venture to produce low carbon hydrogen at Essar’s Stanlow Refinery in Ellesmere Port, Cheshire.

The joint venture will manufacture hydrogen at the refinery for use across the HyNet region. It will provide Essar Oil UK with low carbon hydrogen to decarbonise its own 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 low carbon hydrogen with carbon dioxide safely captured and stored offshore in subsurface reservoirs in Liverpool Bay.

The UK’s first low carbon hydrogen hub will initially produce 3 terawatt-hours (TWh) of low carbon hydrogen each year from 2025. This will be quickly followed by a facility twice this size giving a total capacity of over 9 TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.

A total investment of approximately £750 million will be committed to deliver the two hydrogen production hubs. Follow-on capacity growth is planned to reach 80% of the government’s new target of 5 GW of low carbon hydrogen for power, transport, industry and homes by 2030.

The project will use Johnson Matthey’s best in class Low Carbon Hydrogen (LCH) technology. In partnership with SNC-Lavalin, engineering is well advanced with funding provided by the UK Government’s hydrogen supply competition.

Chris Manson-Whitton, Director, Progressive Energy said, “We cannot reach net zero without a 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,” added Manson-Whitton.

Stein Ivar Bye, Chief Executive Officer, Essar Oil UK said, “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."

Philip Cox, Chief Executive of the Cheshire & Warrington LEP said, “The signing of this agreement is great news for Essar and Progressive Energy. It reaffirms the LEP’s belief that Cheshire and Warrington is at the forefront of developing a new hydrogen economy, and that with industrial partnerships such as this, we can support decarbonisation of key energy-intensive industries, helping the government deliver its ambition for a green industrial revolution.”